Free Ukraine

I would love Ukraine and Ukrainians to be free to pursue their own aspirations – both collectively and individually. In a perfect World they would make their own decisions without relying on anyone else for support. In a perfect World they would be left alone by other countries, free to associate politically with whomever they wished – the West, Russia, UN. However we are not living in a perfect World and Ukraine is not a free country. Tragically, along with the so-called West, it is deeply in debt and probably not economically viable in its current form. In short, it is not free because it cannot pay its bills.

After the break-up of the Soviet Union Ukraine was left with a lot of heavy industry which was obsolete and uncompetitive. Coal mining, steel production and shipbuilding is not what makes countries rich these days and, consequently, Ukrainian economy and finances are in the doldrums. The public debt is growing and the long term government bonds yield well over 10%. To the uninitiated, this means that investors believe the country is a high risk of default. The unemployment is high and it is hard to see what could trigger a recovery from the precarious economic position Ukraine is in. But, to add even more misery, Ukraine is heavily reliant on natural gas which it has to import from its neighbour, Russia. In fact Ukraine has a huge debt with Gazprom, a Russian state-owned company supplying it with gas. With approximately 10 billion US dollars worth of government bonds maturing and their credit rating reduced to junk status the economic outlook for Ukraine is not good.

To bring the situation a bit closer to what we can easily relate to let us imagine a person living in an apartment near us. They only work part time, spend more than they earn and survive by rolling over old debts. They owe money to the power company and risk being cut off. Would you describe them as “free”? Of course not, they have to suck up to their creditors as well as the utility companies. If they annoy the people they depend on for survival the consequences may be dear. The parallels to Ukraine’s situation are overwhelming.

You may think that all countries dependent on the supplies of vital commodities from their neighbours will fall into political dependency but this is not so. Singapore imports much of its drinking water from Malaysia but Singapore is “free”. This is because through engineering ingenuity and good management Singapore has developed its own water supplies to top up the reservoirs. Also, it has an option of importing water by sea from other countries to avoid dependency on Malaysia. Singapore has no local mineral deposits of any kind – no iron ore, coal, oil or gas. Yet Singapore is a prosperous and independent country because it can afford to pay its bills and spend the surplus on the infrastructure it needs. This is true freedom – living within one’s means and not falling into economic dependency (usually followed by the loss of political sovereignty).

So what is my prediction for the Ukraine debacle? I believe there is not much to be gained by openly confronting a powerful neighbour which also happens to be their only supplier of natural gas and one of the creditors. Siding with the European Union is like desperately trying to get aboard the Titanic as it is steaming towards the iceberg. The US are themselves in debt and currently governed by a weak president more interested in rhetoric than action. Ukraine’s neighbours Poland and Turkey will engage in some posturing but are unable to substantively help. Unless Ukraine finds some accommodation with Russia its future is looking bleak.

I believe that, in the short term, Russia will take Crimea which appears to hold a lot of historical significance for them. Putin will use the usual pretexts of protecting the local Russian population, securing the stability of a strategically important region etc. There is nothing anyone can do about it. The current military manoeuvres on Ukraine’s border are part of the orchestrated script. When Putin finally takes over Crimea and things settle down the World will be relieved it has happened without an all-out armed conflict. The likes of EU and US will then call for “restraint” and “de-escalation”, meaning that Ukraine should just accept the territorial loss and move on. Another sad chapter will have been added to the troubled history of Eastern Europe.

NB: I have just checked and the leading news item on the BBC is the Oscars ceremony.


2 Responses to “Free Ukraine”

  1. Richard Says:

    The Crimea was joined to the Ukraine in 1954. Before then it was part of the Soviet Union. It is interesting to hear what sides each of the parties are on (if you can generalise): apparently many Tartars want to remain a part of the Ukraine (isn’t that ironic?) while the Cossacks want to be part of Russia.
    The Russians have a very long standing military base in Sevastopol going back to the Crimean War around 1783. It is not surprising that they have taken it over and the land around it.
    It is likely that possession is nine tenth of the law will rule here. Russia has a veto on the UN Security Council so the UN will not be able to help. From my point of view it is unfortunate but not much can be done about the Russian occupation. In Crimea there are only 2.3 million of the ex Ukraine’s 46 million people. 75% of the population are supposed to be Russian in Crimea.
    The American’s have been trying to encircle Russia (or at least that’s what the Russians have been feeling) through Georgia, the Baltic States, involvement in the ‘Stans’, etc. The push back in the Ukraine is happening along the lines of what happened earlier in Georgia.
    The question now is, is Russia happy for now with their ‘gains’ and will they stop where they are? Or will they push for the rest of the sea coast of the Ukraine to take their Black Sea coast?
    Will the Crimea be annexed to Russia or will it have a referendum on independence which will see it become a satellite state of Russia? Not much difference really.

  2. da-boss Says:

    I do not have much to add to your comprehensive analysis. My pick is that Putin will only take Crimea. You are absolutely correct that Russia cannot “afford” to lose its Black Sea naval bases so the fate of Crimea is sealed. It will either join Russia (after a referendum) and become an enclave like Kalliningrad or else be an autonomous Russian satellite state. Of course none of this is new in the history of totalitarianism – powerful states have been swallowing their neighbours since Adam and Eve. Just wondering how the UK will react to the Crimea referendum in the context of their own pathetic effort in the Falklands/Malvinas…

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