Ukraine: On the road to disaster

While the new Ukrainian President Petro Poroshenko beats the drums of war, the economy and social sphere increasingly show the signs of systemic crisis, which threatens to grow into a full-scale disaster. In between chanting patriotic slogans, the population of Ukraine is trying to recall the survival skills acquired during the crisis of 2008 - which, however, seems a warm memory compared with the serious difficulties we face in the near future. In fact, according to most experts, a new wave of crisis in the autumn can no longer be avoided.

One of the obvious problems is rising fuel prices - the price this fall could be at an all-time high. As a consequence, there will be higher food costs, coupled with the increase in rents and utilities and growing salary arrears for state employees. And when you consider that Ukraine still has not paid its debts for gas and seriously tainted "fuel relations” with its main gas-oil provider, Russia - in the next six months, the situation in this sector will only get worse (given the fact that Russian gas will be supplied to Ukraine on a prepaid basis). 

How will Poroshenko solve these problems? The obvious answer is – he won’t. First, he does not have the necessary leverage. The government is only formally subordinated to the president. In general, the Cabinet headed by Prime Minister Arseniy Yatsenyuk almost entirely consists of representatives of Tymoshenko’s team together with their Nazi allies from Svoboda. And it is dubious that Poroshenko will somehow find a line of compromise with Yatsenuk. In any case, the head of the Cabinet will have the last word on the most important economic issues, which significantly reduces Poroshenko’s real authority. He cannot significantly influence the economic processes, and clearly does not plan to confront the local oligarchy, of which he is part. Threfore, he is definitely not going to sacrifice their capital to save the country.

Secondly, and most important, Poroshenko apparently never intended to take any serious measures to overcome the economic crisis, planning instead to write off all the country's problems on the consequences of the war - and to blame not himself or the division of Ukraine caused by the "EuroMaidan", but - external and internal enemies, whose image is now being actively created by the angry patriotic hysteria of the media. Paradoxically, while destroying economic relations with Russia (that, first of all, hurts the Ukrainian economy and the interests of Ukrainian citizens) the ruling coalition of Nazis and neoliberals intends to declare the future protests against its own policy as “sabotage and provocations of Moscow”.

As a result, in the short term, Ukraine will face hyperinflation, budget cuts and mass layoffs, reduction of real wages with regard to real prices of essential commodities, and the ruin of small businesses. We could say that Ukraine has opened the door not to a fabulous kingdom, but to the quite real kingdom of poverty. And although we did not open the door, we will be pushed through by the efforts of the right-wing politicians and their backers - the billionaire oligarchs and their masters in the International Monetary Fund, the United States and European Union.

However, given the contradiction between the Cabinet and the president, while suppressing mass social protests, the new masters of the country will soon trigger an internal power struggle, and it will lead to further destabilization of Ukraine. Poroshenko will definitely try to form "his own" Cabinet and Yatsenyuk will not surrender his place without a fight. This will lead to new political clashes in Kiev -- and each side will try to play the card of Maidan, which for good and all turned into a crowd of cynical political rogues, who now and then arrange bloody showdowns and shootings in the heart of the capital.

Meanwhile, each month the country will increasingly feel the pressure of the crisis – the consequences of which will be felt first by the proverbial "middle class" that enthusiastically supported the Maidan. Let’s recall what happened in the 1990s - now it is happening again on an even larger scale: economic chaos, flourishing crime, a massive redistribution of wealth to the rich. All this will demoralize the nation - as soon as the effect of drug of euphoric chauvinism will be followed by a painful withdrawal. And this may be the key point in the looming real social rebellion. 

Sergei Kirichuk

Liva

Translation by Greg Batterfield

09.07.2014