Ahead of today’s international Ukraine Recovery Conference in London, Nick Dearden warns against the danger that predatory capitalism poses to Ukraine – his speech from Saturday’s Another Ukraine is Possible Conference

“The profound human tragedy is unavoidably also a huge economic opportunity.” These words from the New York Times are in a very insightful piece from February, looking at the disaster capitalists swirling above Ukraine.

Today I’m going to draw on what I’ve seen in many other countries, to show the dangers Ukraine faces even after fighting ends.

Then the danger will come not only from Russia, but from the very Western governments, institutions and corporations that claim to be on Ukraine’s side.

We find this again and again. Countries overthrow dictators or occupiers only to find themselves in different chains. 

But Ukraine can make connections with social movements in those countries – we don’t have to learn all of this the hard way.

There are several things to watch for and to fight.

We’re meeting now because this week the UK plays host to a recovery conference on Ukraine.

There is a scramble by Western corporations to pick up contracts for some of the $750 billion it’s estimated the reconstruction of Ukraine might cost.

The New York Times in their article, entitled “‘The World’s Largest Construction Site: The Race Is On to Rebuild Ukraine,” reports that “Thousands of businesses around the globe are positioning themselves for a possible multibillion-dollar gold rush: the reconstruction of Ukraine once the war is over… More than 300 companies from 22 countries signed up for a [recent] Rebuild Ukraine trade exhibition and conference.”

And by the way, this is not just construction corporations. No: it includes coal mining, oil refining, oil and gas pipelines, security systems, cementing Ukraine’s role as a provider of raw materials to Europe far into the future.

So there’s work we need to do to link up with the climate movement on this.

And then of course, there are private equity firms, too. BlackRock, the biggest investment corporation in the world, basically owns a fair wad of stock in just about any corporation you can think of. They’re “coordinating investment efforts” to rebuild Ukraine, advising on “how to structure the country’s reconstruction funds.” And surely this will be very helpful for BlackRock investors.

Now, OK, you might say, but someone has to undertake this work. But here’s the thing – Tom Rowley from Open Democracy wrote a report on this recently – Ukraine’s own building materials sector could provide up to 90% of the construction materials needed to rebuild the country.

So Ukraine could use its reconstruction to drive local and national economic recovery, to deal with chronic unemployment, to shape the future of its economy in a different way.

But of course that’s not what the disaster capitalists based in the countries supporting Ukraine want to see at all.

This brings me  to the second point: how will all of this be paid for?

Ukraine has had a pretty large amount of financial support, some in the form of grants or assistance in kind, especially from the US. But a huge amount of this assistance takes the form of loans and guarantees.

Look at one scheme from Germany which puts up a large guarantee programme which promises to bail out companies if the government can’t – transforming, at that point, into a debt, we assume.

So this is a massive subsidy to western corporations. And the whole plan will be overseen by the global auditing giant PwC.

Then there are some really enormous direct loans. Ukraine already had high debts before the war. And some payments on debt were suspended – debt from western governments. Good: well done to those that campaigned on this.  

But loans to the private sector weren’t cancelled. This is usual in these cases: the same thing happened through Covid where many lower income counties were paying a fortune to hedge funds and investment banks in the City of London, even while unable to offer the most basic protection to people.

It’s the same in Ukraine – private debt payments are suspended only if banks decide to do that voluntarily.

And don’t be fooled: even where payments have been stopped, interest is accruing.

International Monetary Fund and World Bank payments not stopped either – it’s not the IMF/WB way. Rather, they give new loans to repay the old loans, all the time creating a spiralling mound of debt. We don’t know how those loans are currently being paid, but the IMF/ WB aren’t going short.  

So the money owed at the end of this is going to be massive. And that debt gives Ukraine’s creditors power.  

We already know how they will use this power. We can see the current loan conditions.  

This is all very typical. In case after case, people have overthrown tyranny and won their freedom only to have it snatched away again by the debt collectors. There’s a fantastic debt movement which it would be good to work with, to draw inspiration and solidarity from.

And one thing we must do if we believe in Ukraine’s freedom to decide on its own future is to demand a cancellation of these debts, because otherwise they will be used to pressure and bully Ukraine.  

So what sorts of things will Ukraine’s creditors demand? We know this already from the loan agreements already signed. There’s loads of stuff in here. Some you might be fine with, for example, human rights and fighting corruption.  

But there are some really worrying phrases also very clear in there. My favourite is “creating a good investment climate.” It’s shorthand for deregulation and pro-business reforms.

You can see it all here, spelt out in detail: labour market reform, public service reform, deregulation and exchange rate reform. It’s all out of the free market textbook.

It goes on: the sale of state assets to the private sector, the marketisation of agriculture. Both are deeply unpopular in Ukrainian society. So the message is: ‘We support your freedom, and let us tell you what freedom looks like.’

Britain has been particularly ‘helpful’ in this regard, using aid and development funds to, for instance, build tighter Intellectual Property rules,  support public-private partnerships and implement labour market reforms.

And then, watch out: this will likely be reinforced by a series of trade and investment deals which will be put on the table.

Now, trade and investment might be good, or they might be bad. It depends on how it’s done. But you don’t want to conclude a trade deal from a position of weakness, or you will be locked into an economic model that benefits your trading partner

For the EU, I think it’s clear: Europe wants to guarantee imports of grain and energy from Ukraine, and ensure Ukraine is a home for European exports. These terms of trade might be better than subjugation to Putin, but they are far from ideal.

And again, a strong movement which has stopped these sorts of trade deals again and again – let’s work with them, too. They can offer expertise and strengthen out hand.

None of this is to say that Ukraine doesn’t need assistance, nor that Ukrainians don’t want reforms. But that assistance and those reforms should not be subject to international capital.

War is so awful, so traumatic, that it jolts the collective consciousness. People return from war with a determination to do things differently.

In Britain, it was the experience of World War 2 which opened the door to the transformation of British society, the development of the first socialised healthcare system in the world and a massive programme of social housing.  We still live in awe of what that generation did.

It would be unforgivable if we allowed a similar opportunity to be snatched away from a generation of Ukrainians that have been forced to fight for their freedom.

Let’s support Ukraine, not just in today’s struggle against Putin’s tyranny, but against tomorrows’ struggle against the tyranny of international capital.

Nick Dearden is Director, Global Justice Now.

Main mage: Kharkiv downtown street destroyed by Russian bombardment. Source: https://www.facebook.com/photo/?fbid=321813666640956&set=pcb.321813919974264.Author: Міністерство внутрішніх справ України, licensed under the Creative Commons Attribution 4.0 International license.

Image in text: Another Ukraine is Possible Conference: TUC President Maria Exall at the lectern. On the platform, left to right: Yuliya Yurchenko, University of Greenwich; Simon Pirani, Durham University; John McDonnell MP. Pic: Mike Phipps