YATSENYUK BETRAYAL TO MAIDAN PEOPLE
REGIME CHANGE
IN UKRAINE AND THE IMF’S BITTER “ECONOMIC MEDICINE”.
By Prof Michel Chossudovsky. Global Research, March 24, 2014
[Here only
extracts. I added what comes in red brackets]
Here is the IMF project that Yatsenyuk -the acting President of Kiev, Ukraine- is signing. How much he will charge for his signature? We don't know yet. Now read the analysis of M. Chossudovky:
In the days following the Ukraine coup d’Etat of February 23, Wall Street and the IMF–in liaison with the US Treasury and the European Commission in Brussels– had already set the stage for the outright takeover of Ukraine’s monetary system. The EuroMaidan protests leading up to “regime change” and the formation of an interim government were followed by purges within key ministries and government bodies.
The new Cabinet has stated that the country is prepared for
socially “painful” but necessary reforms.
[PAINFUL BUT NECESSARY TO WHOM??]
One of the
requirements of the IMF was that “household subsidies for gas be reduced once
again by 50%”.
“Other onerous IMF requirements
included cuts to pensions, government employment, and the privatization (read: let western
corporations purchase) of government assets and property. It is
therefore likely that the most recent IMF deal currently in negotiation, will
include once again major reductions in gas subsidies, cuts in pensions,
immediate government job cuts, as well as other reductions in social spending
programs in the Ukraine.” (voice of russia.com March
21, 2014)
UNCONDITIONAL ACCEPTANCE OF IMF
DEMANDS
Shortly after his instatement, the interim (puppet) prime
minister Arseny Yatsenyuk casually dismissed the need to
negotiate with the IMF. Prior to the conduct of negotiations pertaining to a
draft agreement, Yatsenyuk had already called for an unconditional acceptance of the
IMF package: “We have no other choice but to accept the IMF offer”.
The actual timeframe for the implementation of the IMF’s
“shock therapy” has not yet been firmly established. In all likelihood, the regime will attempt
to delay the more ruthless social impacts of the macroeconomic reforms until
after the May 25 presidential elections (assuming that these elections will
take place).
The text of the IMF agreement is likely to be detailed and
specific, particularly with regard to State assets earmarked for privatization.
Henry Kissinger and Condoleeza Rice, according to Bloomberg are among key
individuals in the US who are acting (in a non-official capacity) in tandem
with the IMF, the Kiev government, in consultation with the White House
and the US Congress.
THE IMF MISSION TO KIEV
A week later, on
March 12, Christine Lagarde, met the interim Prime Minister
of Ukraine Arseniy Yatsenyuk at IMF headquarters in Washington. Lagarde
reaffirmed the IMF’s commitment:
“[to putting Ukraine back] on the
path of sound economic governance and sustainable growth, while protecting the
vulnerable in society. … We are keen to help Ukraine on its path to economic
stability and prosperity.”(Press Release: Statement
by IMF Managing Director Christine Lagarde on Ukraine)
The above statement is wrought with hypocrisy. In practice, the IMF does not wield
“sound economic governance” nor does it protect the vulnerable. It impoverishes entire
populations, while providing “prosperity” to a small corrupt and subservient
political and economic elite.
IMF “economic medicine” while contributing to the enrichment of a
social minority, invariably triggers economic instability and mass
poverty, whileproviding a “social safety net” to the external creditors. To sell its
reform package, the IMF relies on media propaganda as well as persistent
statements by “economic experts” and financial analysts which provide authority
to the IMF’s macroeconomic reforms.
The unspoken OBJECTIVE behind IMF
interventionism is to destabilize sovereign governments and literally break up
entire national economies. This is achieved through the manipulation of key
macroeconomic policy instruments as well as the outright rigging of financial
markets, including the foreign exchange market.
To reach its unspoken goals, the IMF-World Bank often in consultation
with the US Treasury and the State Department, will exert control over key
appointments including the Minister of Finance, the Central Bank governor as well as senior
officials in charge of the country’s privatization program. These key
appointments will require the (unofficial) approval of the “Washington
Consensus” prior to the conduct of negotiations pertaining to a multibillion
IMF bailout agreement.
Beneath the rhetoric, in the real World of money and credit, the
IMF has several related operational objectives:
1) to facilitate the
collection of debt servicing obligations, while ensuring that the country
remains indebted and under the control of its external creditors.
2) to exert on behalf of the
country’s external creditors full control over the country’s monetary
policy, its fiscal and budgetary structures,
3) to revamp social programs,
labor laws, minimum wage legislation, in accordance with the interests of
Western capital
4) to deregulate foreign
trade and investment policies, including financial services and intellectual property
rights,
5) to implement the privatization of key
sectors of the economy through the sale of public assets to foreign
corporations.
6) to facilitate the takeover by foreign
capital of selected privately owned Ukrainian corporations.
7) to ensure the deregulation of the
foreign exchange market.
While the privatization program
ensures the transfer of State assets into the hands of foreign investors, the IMF program also includes provisions geared towards the
destabilization of the country’s privately owned business conglomerates. A concurrent
“break up” plan entitled “spin-off” or a bankruptcy program is often
implemented with a view to triggering the liquidation and/or closing down of a
large number of nationally owned private and public enterprises.
The staged bankruptcy programs ultimately seek to destroy
national capitalism. In the case of Ukraine, they would selectively target the
business interests of the oligarchs, opening the door for the takeover of a sizeable
portion of Ukraine’s private sector by EU and US corporations.
UKRAINE’S SPIRALING EXTERNAL
DEBT
Ukraine’s external debt is of the order of $140
billion.
The EU, the IMF aid package is to be of the order of 15
billion dollars. Ukraine’s outstanding short-term debt is of
the order of $65 billion, more than four times the amount promised by the IMF.
The Central Bank’s
foreign currency reserves have literally dried up. In
February, according to the NUB, Ukraine’s foreign-currency reserves were of the order
of a meager US$13.7 billion, its Special Drawing
Rights with the IMF were of the order of US$16.1 million, its gold reserves US$1.81 billion. There were unconfirmed
reports that Ukraine’s gold had been confiscated and airlifted to New York,
for “safe-keeping” under the custody of the New York Federal Reserve Bank.
Under the bailout, the
IMF –acting on behalf of Ukraine’s US and EU creditors–lends money
to Ukraine which is already earmarked for debt repayment.The money is
transferred to the creditors. The loan is “fictitious money”.
Not one dollar of this money will enter Ukraine.
The package is not
intended to support economic growth. Quite the opposite: Its main purpose is to collect the outstanding short term
debt, while precipitating the destabilization of Ukraine’s economy and
financial system.
The fundamental principle of usury is that the
creditor comes to rescue of the debtor: “I cannot pay my debts, No problem my son,
I will lend you the money and with the money I lend you, you will pay me back”.
The rescue rope thrown to Kiev by the
IMF and the European Union is in reality a ball and chain. Ukraine’s
external debt, as documented by the World Bank, increased tenfold in ten years
and exceeds 135 billion dollars. In interests alone, Ukraine must pay about
4.5 billion dollars a year. The new loans will only serve to increase the external debt thus
obliging Kiev to “liberalize” its economy even more, by selling to corporations
what remains to be privatized. Ukraine, IMF
“Shock Treatment” and Economic Warfare By Manlio Dinucci, Global Research, March 21,
2014
According to IMF’s managing director Christine Lagarde the bailout
is intended to address the issue of poverty and social inequality. In
actuality what it does is to increase the levels of indebtedness, while
essentially handing over the reins of macro-economic reform and monetary policy
to the Bretton Woods Institutions, acting on behalf of Wall Street.
The bailout agreement will include the imposition of drastic
austerity measures which in all likelihood will trigger further social chaos and
economic dislocation. The IMF’s “bitter economic medicine” is called .
“Short-term pain for long term gain” the motto of the Washington based Bretton
Woods institutions. [That is the agreement that Yatsenyuk is signing.]
In essence this puppet regime serves the interests of Wall
Street and the US Treasury.
THE IMF-WORLD BANK HAD DESTROYED UKRAINE’S ‘BREAD BASKET”.
By 1998, the
deregulation of the grain market, the hikes in the price of fuel and the
liberalisation of trade resulted in a decline in the production of
grain by 45 percent in relation to its 1986-90 level. The collapse in
livestock production, poultry and dairy products was even more dramatic.(Seehttp://www.imf.org/external/pubs/ft/scr/2003/cr03174.pdf). The cumulative decline in GDP resulting from the IMF sponsored
reforms was in excess of 60 percent from 1992 to 1995.
THE WORLD BANK: FAKE POVERTY
ALLEVIATION
The World Bank has
recently acknowledged that Ukraine is a poor country. (World Bank, Ukraine Overview,
Washington DC, updated February 17, 2014):
“Evidence shows Ukraine is facing a
health crisis, and the country needs to make urgent and extensive measures to
its health system to reverse the progressive deterioration of citizens’
health. Crude adult death rates in Ukraine are higher than its
immediate neighbors, Moldova and Belarus, and among the highest not only in
Europe, but also in the world.”
With regard to agriculture, the World Bank points to Ukraine’s
“tremendous agricultural potential” while failing to acknowledge that the Ukraine bread-basket
was destroyed as part of a US-IMF-World Bank package. According to the World
Bank: “This potential has not been fully exploited due to depressed farm
incomes and a lack of modernization within the sector.”
“Depressed farm
incomes” are not “the cause” they are the “consequence” of the IMF-World
Bank Structural Adjustment Program. In 1994, farm incomes had declined by the
order of 80% in relation to 1991, following the October 1994 IMF program
engineered by then NUB governor Viktor Yushchenko. Immediately
following the 1994 IMF reform package, the World Bank implemented (in 1995) a
private sector “seed project” based on “the liberalization of seed pricing,
marketing, and trade”. The prices of farm inputs increased dramatically leading
to a string of agricultural bankruptcies. Projects : Agricultural
Seed Development Project | The World Bank, Washington DC,
1995.
THE IMF’S 2014 “SHOCK AND AWE” ECONOMIC BAILOUT
While the
conditions prevailing in Ukraine today are markedly different to those applied
in the 1990s, it should be understood that the imposition of a new wave of
macro-economic reforms (under strict IMF policy conditionalities) will serve to
impoverish a population which has already been impoverished. In other words, the
IMF’s 2014 “Shock and Awe” constitutes the “final blow” in a
sequence of IMF interventions spreading over a period of more than 20 years,
which have contributed to destabilizing the national economy and impoverished
Ukraine’s population.
DRASTIC AUSTERITY MEASURES
The Kiev government
has announced that the IMF requires a 20% cut in
Ukraine`s national budget, implying drastic cuts in social programs,
coupled with reductions in the wages of public employees, privatisation and the
sale of state assets. The IMF has also called for a “phase out” of energy
subsidies, and thederegulation of the foreign exchange markets. With unmanageable
debts, the IMF will also impose the sell off and privatisation of major public
assets as well as the takeover of the national banking sector.
The new government
pressured by the IMF and World Bank have already announced that old aged pensions
are to be curtailed by 50 %. In a timely February 21 release, the World
Bank had set the guidelines for old age pension reform in the countries of
“Emerging Europe and Central Asia” including Ukraine. In an utterly twisted
logic, “Protecting the elderly” is carried out
by slashing their pension benefits, according to the World Bank.
(World Bank, Significant Pension
Reforms Urged in Emerging Europe and Central Asia, Washington Dc,
February 21, 2014)
Given the absence of a real government in Kiev, Ukraine’s political
handlers in the Ministry of Finance and the NUB will obey the diktats of Wall
Street: The IMF structural adjustment loan agreement for Ukraine will
be devastating in its social and economic impacts.
TO READ THE FULL TEXT OPEN:
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