Here’s how Wall Street expects to loot Ukraine

by J P Maher on March 31, 2014

in corruption, J P Maher (team member), sovereign debt, Ukraine

Western Looting Of Ukraine Has Begun — Paul Craig Roberts

It is now apparent that the “Maiden protests” in Kiev were in actuality a Washington organized coup against the elected democratic government. The purpose of the coup is to put NATO military bases on Ukraine’s border with Russia and to impose an IMF austerity program that serves as cover for Western financial interests to loot the country. The sincere idealistic protesters who took to the streets without being paid were the gullible dupes of the plot to destroy their country.
Before the political and geographical issues are settled, the Western looting of Ukraine has already begun. The Western media, doesn’t tell any more truth about IMF “rescue packages” than it does about anything else. The media reports, and many Ukrainians believe, that the IMF is going to rescue Ukraine financially by giving the country billions of dollars.

Ukraine will never see one dollar of the IMF money. What the IMF is going to do is to substitute Ukrainian indebtedness to the IMF for Ukrainian indebtedness to Western banks. The IMF will hand over the money to the Western banks, and the Western banks will reduce Ukraine’s indebtedness by the amount of IMF money. Instead of being indebted to the banks, Ukraine will now be indebted to the IMF.

Now the looting can begin. The IMF loan brings new conditions and imposes austerity on the Ukrainian people so that the Ukraine government can gather up the money with which to repay the IMF. The IMF conditions that will be imposed on the struggling Ukraine population will consist of severe reductions in old-age pensions, in government services, in government employment, and in subsidies for basic consumer purchases such as natural gas. Already low living standards will plummet. In addition, Ukrainian public assets and Ukrainian owned private industries will have to be sold off to Western purchasers.

Additionally, Ukraine will have to float its currency. In a futile effort to protect its currency’s value from being driven very low (and consequently import prices very high) by speculators ganging up on the currency and short-selling it, Ukraine will borrow more money with which to support its currency in the foreign exchange market. Of course, the currency speculators will end up with the borrowed money, leaving Ukraine much deeper in debt than currently.

The corruption involved is legendary, so the direct result of the gullible Maiden protesters will be lower Ukrainian living standards, more corruption, loss of sovereignty over the country’s economic policy, and the transfer of Ukrainian public and private property to Western interests.
When the protests began, I described what the consequences would be and said that I would explain the looting process. It is not necessary for me to do so. Professor Michel Chossudovsky has explained the IMF looting process along with much history here: Regime Change in Ukraine and the IMF’s Bitter “Economic Medicine”
More here.

How Wall Street’s prey can slip away

This time around, the empire builders in DC and Brussels have overreached themselves. They forget that they no longer hold all the cards. As soon as a region within Ukraine feels the screws getting too tight, it’ll hold a vote to join Russia, and Russia will take them in and make it worth their while.

NYT: Flexing Control, Russia Raises Pensions for Crimeans

MOSCOW — Moving quickly to envelop Crimea in the Russian bureaucracy and economy, the Kremlin announced plans on Monday to nearly double retirement pensions paid to the elderly on the peninsula, raising them to the average levels paid in Russia.

President Vladimir V. Putin signed a decree raising pensions and another increasing salaries for public sector workers like teachers and doctors, according to a statement posted on the Kremlin’s website on Monday. Officials also announced a number of new investment plans and tax breaks for Crimea, which Russia seized from Ukraine two weeks ago after a rushed vote in the Crimean Legislature.

To reinforce the message from Moscow, Russia’s prime minister, Dmitri A. Medvedev, traveled to the region’s capital to hold a meeting with members of his Cabinet and local officials.

Mr. Medvedev’s visit was also a show of defiance to the West, coming just hours after Secretary of State John Kerry and Russia’s foreign minister, Sergei Lavrov, failed to agree on a diplomatic solution to the Crimean crisis at late night talks in Paris. Mr. Kerry called the annexation “illegal and illegitimate.”
Mr. Medvedev visited a school and hosted a televised meeting in Simferopol, the Crimean capital. Crimea, he said, would become a special economic zone with tax breaks for businesses that invest in the region, he said.

“Our aim is to make the peninsula as attractive as possible to investors, so that it can generate sufficient income for its own development,” Mr. Medvedev said at the meeting. “There are opportunities for this. We have taken everything into consideration.”

Russia’s retirement benefits are not high by developed country standards but are higher than those in Ukraine, a condition that has proved one appeal of the annexation for residents of the peninsula, which includes many Soviet military veterans.

The average monthly pension in Russia in 2013 was about 10,000 rubles, according to the RIA state news agency, or $277 at the current exchange rate. In comparison, the average pension in Ukraine in December of last year was $160.
Mr. Medvedev vowed to quickly resolve the problem of supplying its people and farms with fresh water. The region now relies on canals drawing water from the Dnieper River in Ukraine.

The canal system was so vital to Crimea that the Soviet Union had transferred the peninsula to the jurisdiction of Ukraine in 1954 in part to ease its construction, by placing the entire irrigation project under one regional administration, that of Ukraine.

Mr. Medvedev said Russia might now build a water pipeline from the Kuban region, passing under the Azov Sea, a reservoir on Crimea, or a desalination plant. The Ukrainian government has said it will not cut off the water, but will charge for it. It is leverage that the authorities in Moscow would clearly not like to see in the hands of the central government in Kiev.

“Of course, we will find all possible means for our citizens in Crimea and Sevastopol to be supported with clean, fresh water,” Mr. Medvedev said. “We will chose an option, or several options, and start work.”

More here.

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