“Everything is Annihilated”: The Economic Split of Ukraine

The attention of political analysts around the world is focused on the events in Ukraine. But at a certain moment, the fires die out and the riots subside – what will remain are the dry statistics.

Translator’s notes: This is a translation of a post on the weblog “Sputnik and Pogrom”, the authors can be described as Russian Nationalists. But that does not make it any less true, the reason that I translated this is that you will never read something like this in the Western Media, Russian Nationalists do not fit the narrative.

Original post by Kyrill Ksenovontov, 28th of January 2014

Translation: Nils van der Vegte


Ukraine showed itself and the world in 2013 that the country is not important: instead of the planned 3.4% economic growth, it achieved something close to zero. 2013 was a negative year for almost all its economic sectors, except for agriculture (industry decreased by -4.7%). Most experts expect no more than 1% GDP growth in 2014. The irony is that the final fall into the abyss of economic crisis was prevented only by trade with Russia. But in 2014 even trade with Russia will do nothing to prevent that: The budget deficit for 2014 is 4.3% of GDP. The worst thing is that, economically speaking, the two halves of the country vary even more than the Czech Republic and Slovakia once did.

For example, the share of the Donetsk and Dnepropetrovsk regions of total Ukrainian exports  is 35% , whilst the 7 most western regions (some of which have a serious historical bonus), make up for just 1/14 of Ukrainian exports. Regionally speaking, the highest number of people living below the poverty line can be found in the north-western and south-central regions (in the Lvov region, 30% of the people live around the poverty line).

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Russia Arming The Rest, And US Views On This

Another Wikileaks cable – a secret one, not merely confidential – from our Caucasus ethnologist and bestest bud at the State Department, William Burns. Dated October 2007, it describes America’s perception of Russia’s global arms trade and emphasizes its concerns that many of its partners are “rogue” or “anti-American” states like Syria, Iran and Venezuela. However, Burns is intelligent enough to acknowledge that the Russians have their own economic, political and cultural reasons for doing things they way. Though obliged to provide suggestions on how to make Russian politicians see eye to eye with the US on the matter, it is likely a quixotic endevour.

Russia is expanding arms exports, seeking ties beyond its traditional partners India and China. (Burns correctly predicted that the Russia – China arms relationship will wane due to Chinese reengineering, copying and reproduction of Russian military products). The capture of most NATO and former Soviet markets by US and European military companies is the primary economic agent behind Russia’s courting of states that Washington has bad relations with. In reply to Western objections, Russia tends to reference “multilateral arms controls regimes (e.g. Wassenaar Group, MTCR, etc.), UN resolutions, or Russian law” in justification; and US protests against its entertainment of “Chavez’s grandiose regional visions” are believed, by the RF Foreign Ministry and Russian defense experts, to spring from “a “Monroe doctrine” mentality, and not real concerns over regional stability.” Finally, a lack of economic diversification actively PUSHES Russia into the arms trade: as Anatoly Kulikov pithily notes, “Russia makes very bad cars, but very good weapons.”

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Arab Rearmament & US MIC Price Gouging

Sorry for not posting on either of my blogs for almost a week now and being slow on responding to the emails. I’ve been rediscovering the pleasures of old-fashioned book reading after purchasing a Kindle. I’m very happy with it. When faced between the choice of surfing the interwebs or reading a paper book, the former has been winning almost all the time in the past two years (see here for why h/t Oscar). The Kindle has somewhat rebalanced the equation.

Never fear. I’ve got a whole lot of post ideas in the chute, which will be forthcoming in the days ahead. But for now, I want to draw attention to an interesting dynamic in the Persian Gulf region. The rich Arab oil states – the UAE, Iraq, and now Saudi Arabia – are buying huge American arms packages. What the media has failed to cover is that the sales are at what are almost certainly massively overinflated prices.

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Book Review: Ha-Joon Chang – Kicking Away the Ladder

Chang, Ha-JoonKicking Away the Ladder: Development Strategy in Historical Perspective (2002)
Category: economy; history; industrial policy; Rating: 5/5
Summary: Kicking Away the Ladder:How the Economic and Intellectual Histories of Capitalism Have Been Re-Written to Justify Neo-Liberal Capitalism (Ha-Joon Chang)

Much has been said of the smug arrogance, cultural aloofness and end-of-history conceit characterizing the neoliberal Washington Consensus, the philosophy that a one-size-fits-all set of “good policies” (e.g. privatization, liberalization, deregulation) and “good institutions” (e.g. patent and IP protection system, etc) can – and must – be transplanted onto any country, irrespective of its historical or cultural traditions, if it were to ever join the developed “international community’. The general bankruptcy of this approach is evident from the facts on the growth, with global GDP growth during the 1960-1980 period of “bad policies” substantially higher than during the “good policies” 1980-2000 period. After seeing high growth during the earlier period, Latin America stagnated, and Africa and Eastern Europe declined during the latter; the major exception was mercantilist China.

Though always disabused by reality, from 1998 Russia to the 2008 crisis, the neoliberals retain their intellectual underpinnings by continuing to claim, like Marxists, that history itself is ultimately on their side – after all, did not Britain and the United States, the world’s greatest economic successes, rise to global preeminence through the virtues of minimal government and free trade? Not at all, argues Ha-Joon Chang in this excellent book.

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