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News :: International
Crisis in Ukraine: Imperialism Pushes to the East
15 Dec 2004
Imperialism pushes to the East

By Fred Goldstein
The political crisis in Ukraine is not about electoral fraud. It is
not because the Ukrainian presidential election runoff on Nov. 21
"did not live up to international standards," as U.S. Secretary of
State Colin Powell declared. If capitalist elections had to live up
to such standards, Bush would not have been president in 2000; he
would not have won Ohio and a host of other states in 2004.

The political crisis in Ukraine is about Western imperialism, headed
by the U.S. ruling class, manipulating the political process and
maneuvering among the different factions of the Ukrainian
bourgeoisie. The goal is to open the floodgates for U.S. and European
corporations to exploit this rich and strategically located country,
to weaken Russia by breaking up its political and economic ties with
Ukraine, and to accelerate Kiev's movement towards NATO.

On a broader political and strategic level, this election dispute is
about imperialism's relentless march to the East, the encirclement of
Russia and the attempt to reduce it to a neocolony. It is a
dangerous, incendiary, aggressive move that is being orchestrated far
beyond the Bush administration. In fact, when the list of
institutions involved in this subversive putsch is laid out, it
constitutes a broad section of the mainstream bourgeoisie, many of
whom were opposed to Bush and his adventurist foreign policy.

The Carnegie Institute for International Peace, George Soros's Open
Society Insti tute, Freedom House and the National Endowment for
Democracy (CIA) are in it, among others. The subversive organizations
of the European imperialists must be also be added to the list.

They have created PORA, the so-called "student" organization on the
model of Otpor in Serbia and Kmara in Georgia. They mobilized
thousands of "poll watchers" and agitators and propagandists to
prepare for the election. They organized a strategy of "exit polls"
which put their man, Viktor Yushchenko, ahead by 11 percent; this
then became the media event and the axis of all sorts of
destabilizing accusations. They organized election campaign slogans,
logos, campaign squads, and so on.

Yushchenko's Our Ukraine movement and the Kiev Press Club are both
funded by Washington's National Endowmen for Democracy, which in turn
is a conduit for the CIA. This and more has been documented by Michel
Chossudovsky ( and by Ian Trainor in the
British newspaper Guardian of Nov. 26.

The imperialist "moderates" are saying to Bush, look what your
adventure in Iraq cost and look where it got us. We will show you how
to take over a rich, strategic country of nearly 50 million without
creating such a mess. The Bush-Cheney-Rumsfeld group are completely
preoccupied with Iraq, Iran, the Middle East in general and Korea,
and how to salvage their situation. Colin Powell, their connection to
the mainstream ruling class, is managing the Ukraine situation as his
last act before leaving.

Imperialist move to the East

The movement to the East began with the overthrow of the Polish
socialist government by the CIA, which created the Solidarity
movement through its stooge, Lech Walesa. It climaxed with the
destruction of the USSR and all the socialist countries of Eastern

It then continued with the Yugoslav war of 1999, followed by the
"peaceful" overthrow of the government of Slobodan Milosevic and the
takeover of Serbia. Washington then moved to oust its former ally,
Eduard Shevardnadze, in Georgia and put in a completely U.S.-educated
puppet, Mikhail Saakashvili. It failed in its attempt to overthrow
the government of Belarus. And now the imperialists are on to Ukraine.

Ukraine borders on Russia, Belarus, Poland, Slovakia, Hungary,
Moldova, Romania, the Black Sea and the Sea of Avov. It has 48
million people. It was a colony during the tsarist empire.

Its eastern portion emerged from the civil war after the Bolshevik
Revolution as the Ukrainian Soviet Socialist Republic. It became part
of the original Soviet Union, formed in 1922.

The western Ukraine was part of capitalist Poland until 1940; it was
invaded and occupied by the Nazi imperialists as part of their
offensive against the USSR in 1941. It lost 7 million people at the
hands of the Nazis. Resistance developed after the initial Nazi
invasion destroyed large units of the Red Army.

Under the planned economy of the USSR, Ukraine was transformed from
a primarily agricultural and mining region to an industrial power
second only to Russia within the framework of the USSR. The planned
economy made it possible to recover from the vast devastation of
World War II.

After the collapse of the USSR and the restoration of capitalism,
the new bourgeois leadership declared it "independent" and moved
towards dependence on the West. Production collapsed by over 50
percent. Over 30 percent of the population was soon living in
poverty. Social benefits were trimmed and Ukraine, like all the post-
Soviet countries that fell victim to capi talist restoration, became
a land of insecurity for the workers and the peasants.

But it is a land still coveted by the transnational corporations. A
description of Ukraine by an internet think tank,,
tells a lot.

"Endowed with good natural resources, superb agricultural land, a
well-educated population, ethnic peace and a strategic location in
Europe, Ukraine was positioned to be one of the most successful of
the former Soviet states in attracting foreign investment needed to
restructure its economy," reads the study.

"Ukraine is rich in natural resources. It has a major ferrous metal
industry, coke, mineral fertilizers and sulfuric acid. Manufactured
goods include airplanes, turbines, metallurgical equipment, diesel
locomotives and tractors. It also is a major producer of grain,
sunflower seeds and sugar and has a broad industrial base, including
much of the former USSR's space and rocket industry. Although oil and
natural gas reserves are small, it has important energy sources such
as coal, and large mineral deposits, and is one of the world's
leading energy transit countries, providing transportation of Russian
and Caspian oil and gas across its territory."

This description is enough to have stockholders, CEOs, Wall Street
brokers, bankers and the entire global fraternity of profit-seeking
capitalist parasites drooling at the mouth. After all, these
resources and all the economic infrastructure developed and built up
over generations by the working class under the socialist system are
now there for the taking.

But so-called "oligarchs" in Ukraine are not cooperating fast
enough. Many of them are trying to take all the loot for themselves.
And therein lies the axis of the crisis in Kiev.

The term oligarchs has come to mean the robber capitalists who have
used their political connections to lawlessly appropriate formerly
socialist property, usually at bargain-basement prices. It is a term
of opprobrium used in the capitalist press. And it is fitting. But it
ill behooves the biggest oligarchs of all to use that term--the ones
at Citibank, J.P. Morgan Chase, Goldman Sachs, and the Fortune 500,
who not only use political influence to steal the resources of entire
countries, but use the CIA and the Pentagon to get by subversion and
military force what they cannot get legally and peacefully.

Imperialism vs. indigenous capitalists

The fierce struggle for the post of president between the present
prime minister, Viktor Yanukovych, and the former prime minister,
Viktor Yushchenko, cannot be understood on a strictly national,
Ukrainian scale. The big business media are trying to cast it in
terms of democracy versus corruption and the nationalist Ukrainian
west versus the Russian-speaking east. But the struggle can only be
understood in terms of the intervention of imperialism.

The giant corporations and the political strategists of Wall Street,
London, Paris, Rome and Brussels are seeking to break the strength,
if not the back, of the national, protectionist, counter-
revolutionary bourgeois factions that have feasted off the
privatization process and are trying to amass industrial empires.
These indigenous capitalists are busily engaged in dividing up the
fruits of 70 years of socialist construction built up by the workers
and peasants of Ukraine, but they have resisted sharing them with

President Leonid Kuchma, whose second five-year term is expiring,
picked Yanukovych to be his successor. Yanu kovych had been governor
of the coal-rich Donets region. Later, as prime minister from Nov
ember 2002 to December 2004, he tried to solidify his base in this
industrial and coal-mining region of the east, raising wages,
pensions and social benefits to coun terbalance the suffering of the
workers from capitalist restoration and privatization.

Yanukovych's demagogy was meant to offset the fact that he was part
of the Kuchma grouping that was enriching such capitalists as Rinat
Akhmetov, the owner of System Capital Management, Ukraine's biggest
corporation with large holdings in metallurgy. Also in his camp are
Viktor Pinchuk, Kuchma's son-in-law, who owns Interpipe and three
television channels and is reportedly Ukraine's second-richest man,
worth $3 billion. Also behind Yanu kovych is the Dnepropetrovsk-based
Privatbank, a powerful capitalist grouping. And he was close to
Serhiy Tyhypko, chairperson of the National Bank and other business
interests who have tried to grab the lion's share of industry. (Kyiv
Post, Nov. 29, and

Unfortunately, there does not seem to be an independent, working-
class voice in this struggle. But that is what is desperately needed
to expose both camps and revive the struggle against capitalism and
exploitation and for a planned economy with workers'rights.

Yushchenko, during his term as Kuchma's prime minister from 1991 to
2001, made "progress" in privatization for the imperialists.

In the Russian Independent Internet Digest (RIID at of
Oct. 29, the journal pondered the paradox that the Russians might be
worse off under the allegedly "pro-Russian" Yanukovych.

"'Yanukovych is for regional protectionism, there is no doubt about
it,' said Myron Wasylyk, head of the Ukraine office of PBN, a
consulting and public relations firm.

"'Yanukovych has basically blocked off the Russians and the
Westerners and has given everything to the Ukrainians,' Wasylyk said.

"During Yushchenko's tenure as prime minister, from 1999 to 2001,"
continues the RIID, "the prospect for foreign firms was much
brighter, said Dmitry Tara bakin, director of Dragon Capital,
Ukraine's biggest brokerage by volume."

Auction of steel mill shows what's what

Despite Yanukovych playing the "Russian" card at home, preparing to
promote Russian as a second official state language and leaning
politically toward Russia, "he approved the results of a
privatization auction for the country's biggest steel mill,
Kryvorishstal, earlier in this year. Global steel majors, including
Russia's Severstal, were all anxious to bid, but parliament's
privatization committee revised the terms of the tender essentially
to ban them, driving down the sale price in the process."

In the end, the auction was won for just $800 million by a Ukrainian
company founded by Pinchuk and Akhmetov, even though Severstal said
it was willing to pay $1.2 billion. (RIID)

What the RIID did not mention, because it was only concerned with
Russian capitalist interests, was mentioned by Business Week Online,
Nov. 8, about the same auction. Viktor Pinchuk won, complained the
U.S. financial magazine, "even though the winning bid of $800 million
was far less than a $1.5-billion offer from U.S. Steel Corp."

Business Week shares RIID's assessment of Yushchenko. "If
Yushchenko, a strongly pro-Western politician who jump-started
Ukraine's boom when he was prime minister ... pulls off a victory,
Ukraine could see major reforms that will put the country on the
international investor map like never before."

And Business Week has a prescription for how to begin the investment
boom. "What's really needed are big manufacturers" who will be drawn
by "a highly educated, cheap work force. Labor costs are below $160 a
month, including all taxes and social levies, vs. around $400 a month
in Poland. And as wage costs in European Union accession countries
[former Soviet republics--F.G.] spiral upward, nearby Ukraine looks
ever more tempting. 'EU enlargement has brought the borders of Europe
to Ukraine, so from a strategic point of view, a logistical point of
view, and a cost point of view, it makes much more sense right now to
manufacture in Ukraine,' says Jorge Intriago, partner of
PricewaterhouseCoopers in Kiev."

Knowing the opportunistic nature of both camps in the struggle
inside Ukraine, Business Week, the authoritative organ of the biggest
U.S. capitalists, is not too worried. It quotes Garry Levesley,
Ukrainian director for the Arlington, Va.-based power company AES
Corp., which has two Ukrainian power distribution companies. "Whoever
wins, the country will continue to move forward economically, reform
and normalize. The only question is the pace of improvement," says

The U.S. and European imperialists are huddling now. They have
threatened Russia, whose economy, military and space program are
heavily integrated with Ukraine. They are backing the candidate,
Yushchenko, who wants to bring Ukraine into NATO, and have pushed the
Parlia ment to reject Yanukovych. They inflamed the situation in
order to get a beachhead in Ukraine. Now they will try to stabilize
the dangerous and incendiary state of affairs they have created so
they can have a smooth transition to a breakthrough in imperialist
exploitation of Ukraine.

The push into Ukraine is, in the last analysis, an expression of the
crisis of world capitalism and imperialism. It is no accident that
German imperialism forced the Bolshevik government to sign away
Ukraine in the Brest-Litovsk Treaty of 1918, which allowed Russia to
get out of World War I. Ukraine was a valuable and strategic
territory that the German capitalists needed and they thought such a
monumental loss would cripple the Bol shevik government. After
Germany collapsed, the Brest-Litovsk Treaty was nullified.

It is also no accident that Hitler, when planning his offensive
against the USSR, made the capture of Ukraine, with its agriculture
and minerals, a principal military objective. To Hitler, Ukraine was
"lebensraum," living space, a place to colonize, invest in and
enslave the Ukrainians. This was essential to Hitler's plan for world

His mad adventure in the USSR was an expression of German
imperialism's need for colonies. It had few, but possessed the most
advanced, most productive capitalist industrial machine in the world.
It was a matter of life and death for the German imperialists to grab
new markets, new sources of raw material and new wage slaves.

While the social crisis in the United States bears no comparison to
the one that Hitler sought to solve, nevertheless, the present
relentless and dangerous push to the East, which could also
eventually target China, is driven by the same capitalist/imperialist
forces that made for his sudden grab at Ukraine.

The movement in the United States must expose the dangerous and
aggressive maneuver of the U.S. ruling class and demand that Wall
Street and Washington keep their hands off Ukraine.

Reprinted from the Dec. 9, 2004, issue of Workers World newspaper
This article is copyright under a Creative Commons License.
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