- There are those that point out that one of the big goals being pursued by the Kiev government / IMF is a strategy for energy independence based on massive fracking in the Donets region. Yes, one of Ukraine's big problems is that without Russian gas, she freezes in the dark. No, fracking is not likely to solve her problems. Yes, there will be people in eastern Ukraine who believe fracking is so against their interests, they will be willing to shoot folks to make their point.
- Russia is caught intellectually between the wretched neoliberal excesses of being an oil-rich country and her memories of being a superpower. Russia won WW II because she was able to keep making tanks (and 1000 other similar efforts). There is something very empowering about industrial self-sufficiency and I am sure there are nationalists who want it back.
- Putin's understanding of economics is extremely interesting. On one hand, he is surrounded by layers of oligarchs who stole their fortunes under the flag of neoliberalism. RT economic shows are quite neoliberal. But his moves on economic sanctions shows he believes that he and his new BRICS friends can end the most egregious economic injustice—the role of the dollar. This is a very non-neoliberal goal and will only succeed with non-neoliberal ideas and methods.
Meanwhile, Russia has a whole raft of folks (such as most of Latin America) who will be delighted to take over someone's markets they pissed away over a distant dispute with highly dubious (f**k the EU) rationales. But that doesn't mean the transition will go smoothly. Soviet-era lines may be possible before the kinks are worked out. But Putin holds ALL the cards in this dispute and he could wind up with a much more self-sufficient and environmentally friendly food supply as a side bonus. Just remember, there is ZERO reason why Russia couldn't feed itself—lavishly.
Unfortunately for the Ukrainian people, their dreams of the revolution last spring are now in the hands of economic crackpots who have on their list of "accomplishments" the de-industrialization of USA. As this reality sinks in, there are grumblings—according to The Guardian—of the need for a New Maidan. This time, we can only hope that if they spot Victoria Nuland handing out cookies, they will smell a rat.
Putin Ban Hits Cold War Foes as Developing Nations GainBy Olga Tanas and Volodymyr Verbyany Aug 7, 2014
(Bloomberg) -- President Vladimir Putin countered U.S. and European sanctions over Ukraine with a ban on a range of food products, opening the door for developing nations such as Brazil to fill the $9.5 billion hole created by the curbs.
The restrictions include all cheese, fish, beef, pork, fruit, vegetables and dairy products, Prime Minister Dmitry Medvedev told ministers today in Moscow, fulfilling a presidential decree issued yesterday. The curbs hit nations that have penalized or supported measures against Russia, including Canada, Australia and Norway. Russia may also introduce “supportive measures” for the car, shipping and aerospace industries, Medvedev said.
“The decision on retaliation wasn’t easy for us,” said Medvedev, who announced a ban on Ukrainian planes flying over Russia and a possible review of Siberian airspace use by other carriers. “But I’m sure that even under such conditions we will be able to turn the situation to our own benefit.”
Putin is facing increasing isolation over Ukraine’s pro-Russian rebellion, which ignited after he annexed Crimea in March after a referendum that the United Nations rejected in a vote of 100 to 11.
Putin has responded to intensified fighting in easternmost regions by amassing thousands of troops along the border, triggering a warning today from the North Atlantic Treaty Organization to “step back from the brink.” While condemned by Russia’s former Cold War foes, Putin’s stance on Ukraine has propelled his approval rating to an all-time high of 87 percent at home and he’s now looking for allies abroad.
Russian officials called on countries including Argentina, Brazil, Iran, Israel, Morocco, Paraguay, Turkey, Uruguay and former Soviet states not in the EU to boost food exports to help fill the void. Russia imported a total of $25 billion of products on the banned list last year, $9.5 billion of which came from nations now blacklisted, according to Capital Economics Ltd. estimates.
“Retaliating against Western companies or countries will deepen Russia’s international isolation, causing further damage to its own economy,” said Laura Lucas, a spokeswoman for the U.S. National Security Council. “We continue to call on Russia to take immediate steps to de-escalate the conflict and cease its efforts to destabilize Ukraine.”
The EU said it “regrets” the bans and may respond. “We reserve the right to take action as appropriate,” European Commission spokesman Frederic Vincent said in Brussels.
EU food exports to Russia rose 4.3 percent last year to 11.9 billion euros ($15.9 billion), with fresh and dried fruits accounting for 9.1 percent of the total, according to data e-mailed by the European Commission.
The country most affected by the ban is Lithuania, a former Soviet republic that is now a member of both the EU and NATO. Lithuanian exports of products to Russia that are now banned accounted for 2.5 percent of gross domestic product last year, Capital Economics economists led by Neil Shearing said in a research note.
“By seeking revenge of the West, the Kremlin’s decisions will hurt the people of Russia,” Lithuanian President Dalia Grybauskaite, an outspoken Putin critic, said on LRT radio.
Denmark, another EU member, exported about $628 million of products to Russia last year that are now banned, according to the Danish Agriculture & Food Council.
Putin said in the decree that the aim of the food restrictions is “to protect national interests.” He called on the government to boost domestic supplies with the help of producers and retailers and to avoid spurring food-price growth.
The Micex Index fell as much as 2.1 percent to a three-month low before rebounding to close up 0.1 percent on a report, later confirmed by Russian news service RIA Novosti, that Alexander Borodai, a separatist leader in Ukraine, planned to resign. The ruble weakened as much as 0.6 percent to 36.3767 per dollar in Moscow, its lowest level since March.
Norwegian salmon farmers including Marine Harvest ASA, the world’s largest, slumped in Oslo, with Marine Harvest, controlled by billionaire John Fredriksen, falling as much as 12 percent, the most in more than six months.
Ukraine will announce sanctions against Russia tomorrow, including measures targeting individuals and whole industries, Interfax reported, citing Justice Minister Pavlo Petrenko.
While the food ban will harm countries supplying food to Russia, “it will likely only amplify the effects of financial and sectoral sanctions imposed on Russia,” Dmitry Polevoy, an economist at ING Groep NV in Moscow, said in an e-mailed note. “This will likely add to overall sanction costs via higher food inflation and so will have a widespread effect on households.”
Even before the decree, Russia’s public health regulators banned some imports from EU countries, the U.S. and Ukraine.
Ukraine's revolution dream stalling due to war in the east and political stasisPresident Yanukovych is long gone, but war-weariness and a sense of politics as usual are fostering whispers of a 'new Maidan'
Shaun Walker in Kiev The Guardian, 5 August 2014
Nearly six months after the decisive battles between protesters and police on Kiev's Independence Square, the charred barricades of burned tyres and twisted metal still stand in memorial to the more than 100 people who died in the February clashes.
The Maidan movement achieved its main goal: the ousting of President Viktor Yanukovych. But in the months since, Ukraine has lost Crimea to Russian annexation and seen a civil war take hold in the east of the country, with Moscow's support.
Petro Poroshenko, a chocolate tycoon who threw his lot in with the protests from the start, came to power in May's presidential elections promising a new type of political culture. But the conflict in the east has deflected attention and financial resources away from the renewal of government and governance, and analysts warn that serious economic problems are just around the corner.
Poroshenko and his government now face criticism from two sides. On the one hand, eager to end the standoff in the east as soon as possible and faced with an enemy that appears to have a constant supply of heavy weaponry from Russia, Ukrainian forces have resorted to tactics that have been strongly criticised by international bodies.
On the other hand, there is a growing sense in Ukrainian society that not enough has changed since Maidan, and a radicalisation of the mood has increased mutterings for a "new Maidan".
"A lot will depend on how quickly the war in the east is finished or whether it drags on for months," says political analyst Volodymyr Fesenko. "We are entering a very unpredictable period for Ukraine, and a lot about the future of the country will be decided in the next few months."
The UN says that more than 1,100 people have died since the "anti-terrorist operation" began in the east of the country several months ago. While the Ukrainian army has made significant gains against the armed separatists in recent weeks, it has come at the cost of an increasingly high civilian death toll.
Most controversial is the apparent use of Grad rockets by the Ukrainians. Both the rebels and the pro-Ukrainian forces have Grads, which fire up to 40 missiles in quick succession and are notoriously inaccurate. Kiev denies that it has ever used heavy artillery on residential areas, and has complained about reports by international rights organisations suggesting otherwise.
However, Ole Solvang, a researcher with Human Rights Watch (HRW) who spent last week documenting cases in Donetsk and the surrounding region, said there was "little doubt" Ukrainian forces had used Grad rockets in residential areas. HRW notes that the rebels also have Grad rocket systems and may well have used them on civilian populations.
"We know the rebels are using Grads as well, but this does not excuse the government," Solvang said.
Authorities in the city of Luhansk, under siege from the Ukrainian army, said on Tuesday that a humanitarian catastrophe is approaching, with no reliable supplies of electricity or drinking water. Hundreds of thousands of people have fled their homes, mainly across the border to Russia.
However, as public opinion becomes further radicalised by the war, there is little room for soul-searching, and voices urging restraint are not welcome. Increasingly there is a feeling that the unrest in the east needs to be wrapped up as soon as possible.
"Of course there has to be other elements to a solution for the east as well as the military solution," says Melnyk. "But until there is a military solution, everything else is impossible."
As the war has ground on, public opinion in western and central Ukraine has radicalised. Oleg Lyashko, an eccentric MP whose speciality is making raids into the east with a band of black-clad paramilitaries, stripping captives to their underwear, putting bags on their heads, and lecturing them on camera about their traitorous behaviour, has seen his popularity grow from zero to around 20%, making him a serious political force.
"When there is fear in society, demagogues flourish, and Lyashko's military populism is very popular at the moment," says political analyst Volodymyr Fesenko.
The reliance on volunteer battalions run by men such as Lyashko is mainly due to the appalling state of the Ukrainian army, which analysts say has been destroyed by negligence and corruption in the two decades since independence. There are also battalions funded by oligarchs, and those affiliated to political groups, including Right Sector, a group with neo-fascist tendencies.
The proliferation of these battalions also poses important questions for the postwar settlement, and Poroshenko will need to find a way to integrate the groups either into the army or back into civilian life when the conflict in the east is over.
"A new Maidan could pose a danger to the very nature of Ukrainian statehood, and of course there will be a major issue about what happens to all of these volunteer battalions when they return from the east. They are heavily armed, and many have links to oligarchs or political forces," says Fesenko. On Monday, there was an early warning of what could be to come, when the Kiev-1 battalion, back from the front, raided a cafe in central Kiev in order to evict other activists who had allegedly taken it over.
On Kiev's Independence Square, the tent camp still stands, guarded by barricades on all sides. Souvenir stands sell doormats and toilet rolls bearing the image of Yanukovych, and of Russian President Vladimir Putin.Just a few hundred people remain, sweltering in the summer heat, a far cry from the tens of thousands who stood there during the icy winter evenings prior to Yanukovych's fall. Amid much debate about whether it is time to reopen the square to normal traffic and pull down the tent camp, its endurance is a reminder to those in power of the fragility of their position.
For those who stood on Maidan and were the driving force behind the change of government in February, there are mixed feelings about how things have gone since.
Myroslav Gryshyn, a 28-year-old who stood on the barricades at Maidan from the start and later spent six weeks fighting near the rebel stronghold of Slavyansk with Ukraine's national guard, said he felt the February revolution had "changed the country's political culture" and given many people a sense that they were not powerless.
He said it was unrealistic to expect a complete transformation overnight, and that it could take Ukraine a decade or longer to become a "normal country", but nevertheless sounded a note of warning for Poroshenko: "Things are different now, we know that if we really want to change the government, we can do it with no problems."
Yehor Sobelev, a journalist and Maidan activist who now leads the Lustration Committee – a body that wants to force all Ukrainian public officials to undergo checks for past links to corruption and misgovernance – says Poroshenko has not done nearly enough during his time in charge.
"I see little evidence that he wants to change the corrupt system, just that he wants to lead it," says Sobelev. "I think there will be a new Maidan led by the people who come back from the front lines in the east, who have seen the effect that corruption and mismanagement has first hand. And I'd be surprised if all our current political leaders make it through that Maidan with their lives intact." more