Has the IMF Annexed Ukraine?
Michael Hudson, an economist at the University of Missouri-Kansas City and author of the upcoming book “Killing the Host: Financial Parasites and Wall Street’s War on Capitalism,” says the terms attached to the loans made by the IMF to Ukraine are likely to turn its people into penniless serfs of international banks.
In the video above, Sharmini Peries at The Real News Network asks Hudson, “In a recent interview [by former State Department official James Carden] published in The National Interest magazine you said that most media covers Russia as if it is the greatest threat to Ukraine. History suggests that the IMF may be far more dangerous. What did you mean by that?”
Hudson responds, “Well, the terms on which the IMF make loans, first of all, are based on austerity. The terms require more austerity and a withdrawal of all public subsidies. Now, you have the Ukrainian population absolutely devastated. The only result of the IMF’s austerity program, the conditions that it’s laying down for making loans to Ukraine, is you have to repay the debts, but you don’t have the ability to repay the debts. So there’s only one way to do it, and that’s the way that we’ve told Greece and other countries to do. You have to begin selling off whatever you have left of your public domain. Or you have to have your leading oligarchs take on partnerships with American or European investors so that they can buy out into the monopolies in the Ukraine.
“So essentially, the IMF has a two stage, one-two punch. Punch number one is: ‘Here’s the money, now you have to repay us after cutting back public spending and causing a depression.’ The two punch is: ‘Oh, you can’t pay us? I’m sorry that all of our projections are wrong.’
“And the IMF has been wrong on Ukraine year after year. Almost as much as it’s been wrong on Ireland and on Greece. So now the real problem is: what is Ukraine going to have to sell to pay off the foreign debts that it gets for having waged a war that’s devastated an economy. Well, the main things that foreign investors want are Ukrainian farmland. Monsanto has been buying into Ukraine, but Ukraine has a law against alienating its farmland and agricultural land to foreigners. As a matter of fact, its law is very much the same as what the Financial Times reports that Australia is wanting to do today: to block Chinese and American purchases of farmlands. The IMF’s position is: ‘You have to dismantle public regulations against foreign investment and you have to dismantle consumer production and environmental production regulations.’
“In other words, what is in store for Ukraine is a neoliberal policy that’s guaranteed to actually make it even worse. And in that sense, finance is war. Finance is a new kind of warfare using finance and forced selloffs in the IMF as a new kind of battlefield. I’m not sure how all of this is going to really help Ukraine, and it promises to lead to yet another crisis down the road, very, very quickly.”
— Posted by Alexander Reed Kelly.