The Ukrainian desert and ultraliberal capitalism

Ukraine has to become part of the West. This has been the obsessively repeated mantra for the past four years at least, since the victory of the Revolution of Dignity. Ukrainian politicians, faced with war at home and a collapse of the economy, have come up with nothing better than making their main strategic goal to join NATO and at some point the EU.

Does Ukraine need the West?

Ukraine has to become part of the West because there is no alternative to the West, the thinking goes. In this view the West stands as the only really civilized world, the sole stronghold of the freedom, wealth and democracy. In this sense the whole West is now an extension of the United States. Hence if Ukraine wants to be free, prosperous and democratic, it cannot fail to become an integral part of the West. There is no life, no freedom, no wealth and no democracy outside of the West anyway.

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Taken at face value, these goals would appear to express the legitimate ambitions of a young nation to join the concert of the modern and progressive nations, the only bulwark of the civilization descending from the enlightenment against the many challenges the era of globalization is bringing with itself. Considering however Ukrainian realities, defined by an environment with a tiny superrich elite and a largely empoverished population who has to make do with salaries of $ 200 a month, these verbal professions of committment to freedom, democracy and prosperity and all these nice other things look hypocritical and manipulative. Certainly some young enterpreneuers in Ukraine, possibly with some work experience in Europe or the US and tech-savvy people, firmly believe in the necessity for Ukraine to become like the West to revive economic activity for one thing and to attract foreign investment on the other hand. The problem is, those in power do not, because they emerged and their acquired their wealth largely during the times of the great transformation after the collapse of the Soviet Union, and unlike in Russia, which witnessed the same processes, the power of the oligarchs was not contrasted by a strong centralized government.

But for all their saying that if it was not for Putler (a combination of Putin and Hitler) and the Russki aggression Ukraine would part of the EU now and and that after Maidan Ukraine is free now, because it has liberated itself from the Russian empire of evil and of Soviet mentality, young Ukrainian Western-minded shock reformers do not have much to offer in terms of recipes for future prosperity. Their proposals amount to the usual prescriptions of government spending cuts, attraction of foreign capital and foreign professionals, increase in competitiveness thanks to low salaries … and pay rise for high-ranking professional managers, that is to say, the sort of people they aspire to come. It is exactly in this ideologically desert environment that the cactus of the most extreme and brutal form of laissez-faire capitalism can grow wildly. These transformation to redesign a whole society naturally involve of high number of casualties, generally people who are deemed to belong to the old order of things, but these casualties are often supposed to be justified in the name of progress and modernization. It is an idealized version of libertarian capitalism, founded on the daily struggle for survival of the majority of the population.

Poland is often considered a model of successful economic liberalization and integration with the West. But after almost 30 years of radical economic transformation and having received EU funds equivalent to two times the Marshall Plan, the program for the reconstruction of Europe after WWII, still lags behind European Western countries in many respects. Average wages are around $ 800 a month, two or three times less than in Western Europe, unemployment benefits can amount to less than $ 200 a month (and they are granted for no more than six months) and Warsaw is more polluted than Beijing. When the era of economic liberation started, millions of Poles simply voted with their feet, emigrating abroad in search of better luck.

While the West clearly has an economic and technological edge over the rest of the world, problems like demographic stagnation in Western countries, unprecedented levels of income inequality and the prospects of digitalization and robotization taking over increasingly larger sectors of the economy, leaves little reason to believe that the Western way of life will be sustainable for many decades to come. The very foundation and the social fabric of the Western way of life (in short: you work well, you live well), is under threat. The cult and its idolization of the West, still very popular in Ukraine, will look like a thing of the past – and the moment might come soon. Certainly, Western technologies may well take over the world, but this does not necessarily mean that the new technocratic elite will continue to serve the interest of the people, who will increasingly be left behind.

Does the West need Ukraine?

What can Ukraine give to the West? Until now, the association agreement with the EU (which, as it may necessary to repeat one more time, was never meant to a prelude to an immediate accession to the EU. Syria before the war started in 2011 was in the process of negotiating an association agreement with the EU and Jordan has had an association agreement since 2002) has brought little benefit to the Ukrainian economy. The agreement, together with the conflict with Russia, had to marked a reorientation of Ukrainian trade, until then dominated by the commercial exchanges with Russia. Trade with EU countries still has not reached the level of 2013.

Export import UA EN

What Ukraine can offer to the West is cheap labour, cheaper that in China, with salaries less than $ 300, and its geographical location, closer to the potential export market. But can prosperity be on the foundation of cheap labour? Will Apple open factories in Ukraine, and thus give jobs to millions of Ukrainians? Hardly. IT-manufacturing requires complicated technical skills and it is not developed over a couple of years. Not even the Polish example seem to indicate what could be the Ukrainian future, because it is unlikely that Ukraine will receive comparable amounts of financial aid.

Rather than being attractive to global business for economic reasons, Ukraine is in invaluable bargaining chip in geopolitical terms. But it is hard to see how Ukraine will profit from becoming just another outpost of NATO.


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