Ukraine: Kiev junta drives headlong into economic collapse

Ukraine’s parliamentary elections in October, conducted in an atmosphere of unremitting terror, with right-wing gangs beating up anybody they suspected of the slightest connection with the illegally-ousted government of Viktor Yanukovych – or of any pro-communist, progressive or pro-Russian sympathies – solved no problems for the country, which is now plunging into a hard winter of economic collapse, military humiliation and energy insecurity.

The junta’s ‘president’, ‘Chocolate King’ Poroshenko is skating on ever thinner ice, having been denied military victory in the southeast. His demoralised forces there were roundly defeated in contention with popular militias, who, against enormous odds and heavily outgunned, have fought Kiev’s forces to a stalemate. Poroshenko is now threatened from the right for presiding over such a military humiliation.

Sacking his defence minister, Valerii Geletei, may have taken some of the heat off himself for now, but with no progress notched up either on the battlefield or on the diplomatic front, his long-term political survival prospects do not look good. Nor are they likely to improve as temperatures plunge and economic collapse beckons.

Kiev junta turns its back on diplomacy

The regime has decisively turned its back on any progress towards diplomatic means of de-escalating the war in Ukraine, and has reneged on its September promise at the Minsk talks to negotiate a form of autonomy for the southeast of the country.

This overturns a law providing special status for the southeast; a law on which the ink had barely dried. That law had been adopted at the prompting of the Minsk talks, and was designed to facilitate negotiations over some degree of autonomy for the Donbass region.

Poroshenko, outraged by the success of the new republics’ own elections on 2 November (monitored by observers from Britain, France, USA, Poland, Abkhazia and Russia), is now pushing through a second law to countermand the first.

The new law severs all social and economic ties with the southeast, including education and medical care, and the central bank is ordered to cut links with the region’s banking system, thereby stifling the local economy. To put the icing on this rancid cake, the decree also suspends the European Convention on Human Rights.

What is essentially a blockade on the whole region has been correctly identified by the resistance as an act of genocide. The long and the short of it is that the regime intends to blockade the Donbass, leaving the population to freeze and starve. This dog-in-the-manger junta is denying all responsibility for the welfare of the region’s population, whilst simultaneously denying the right of the fledgling People’s Republics of Donetsk and Lugansk to shoulder that responsibility themselves. (‘Ukraine to cut financial ties to rebel-held Donbass’, Business News Europe, 17 November 2014)

In reality, a lot of what this act threatens is already happening on the ground – and it is more than anything a declaration of enraged impotence on the part of Kiev. After all, since when have the junta’s armed forces ever busied themselves with protecting the human rights of those whom they brutalise? What will be made of this new commandment by the fascist gangs who daily terrorise the captive population of Mariupol, unable to see off the partisans hammering at the gate but relieving their frustration by terrorising the citizens with kidnapping, rapes, robbery and torture?

The horrors of life under direct fascist occupation, or under arm’s length artillery and aerial bombardment, have continued unabated since the so-called ‘ceasefire’, and in the light of Poroshenko’s latest tantrums, they are unlikely to be alleviated now.

In bleak contrast with the measured tone adopted by Russian foreign minister Sergei Lavrov, who urged that “it’s now necessary to support fledgling ties between Kiev and the People’s Republics of Lugansk and Donetsk and then to start a comprehensive political dialogue with the purpose of finding ways for reaching national accord and conducting constitutional reform with the participation of all regions and political forces”, the junta continues to gaily burn down one diplomatic bridge after another in a mood of nihilistic abandon that smacks less of confidence and more of desperation. (‘Lavrov: Russia never questioned Ukraine’s right for partnership with the EU’, rt.com, 25 October 2014)

Moscow’s diplomatic efforts

The hand of imperialism continues to be visible in all these developments. Sooner than take the junta to task for its latest demonstration of ‘democratic western values’, the imperialist masters have turned a blind eye to the accumulating war crimes of the Kiev regime and are instead raising yet another ballyhoo about a supposed ‘massed invasion’ of phantom Russian tanks.

Back in the real world, the Russian foreign ministry has criticised the ostensibly ‘neutral’ Organisation for Security and Cooperation in Europe (OSCE) for obsessively monitoring the slightest move by the republics’ militias, whilst ignoring “military preparations and the concentration of the Ukrainian army’s strike forces along the line of engagement”, adding that the OSCE is also blind to “numerous cases when the Ukrainian military violated not only conditions of the Minsk [ceasefire] agreement, but also the norms of international humanitarian law, the rampaging of neo-fascists, and nationalist Kiev-controlled regions …

“Of particular interest to Russia are mass graves discovered in the wake of the hostilities in areas previously controlled by Kiev’s forces and reports that the Ukrainian military used weapons in violation of international law.” (‘Russia slams OSCE for taking Kiev’s side in civil war’, rt.com, 14 November 2014)

In another demonstration that Moscow has no animus against the Ukrainian people and no desire to see them freeze to death over the winter under the misleadership of their fascist rulers, a provisional understanding has been reached over gas supply from now until the end of March.

Under an agreement signed off by Russia, the European Commission and the junta, Ukraine will be supplied with Russian gas based on a pre-payment plan at a price of $378 per 1,000 cubic metres – a price that includes a generous 10 percent discount. This deal, all the more remarkable given the enormous debt still owed for gas already consumed, has been agreed to by Russia to help get Ukraine through the winter, without prejudice to next summer’s prices. (‘Russia-Ukraine gas deal secures EU winter supply’, BBC News Online, 31 October 2014)

Ukraine brought to the brink of economic collapse

Doubt still remains over Kiev’s ability to pay even these bargain-basement prices, however, given the parlous state of Ukraine’s economy. The national currency, the hyvrnia, has lost almost half its value against the dollar this year, making it twice as hard for the junta to service the $60bn of foreign debt, most of which is in dollars.

News that the ceasefire was getting closer to complete breakdown accelerated the hyvrnia’s fall, while the IMF’s $17bn ‘rescue’ package has disappeared into a black hole and the country’s foreign reserves have shrunk to $12.6bn – hardly sufficient to cover six weeks of imports. Increasingly, the talk is of default.

Russian president Vladimir Putin made it clear in a recent interview on German TV that his country has no desire to see its troubled neighbour bankrupted, and that therefore the state has no plans to demand immediate repayment of the $3bn it lent Kiev last year, declaring that: “We have already decided that we will not do it, because then Ukraine’s whole financial system would collapse. We do not want to aggravate the situation. We want Ukraine to get back on its feet at last.”

So far as the debts owed by Ukraine to Russian banks are concerned – amounting to $25bn at present – Putin pointed out that this was a matter for their shareholders – many of whom are from the West! It is ironic that the sanctions imposed on the Russian financial sector, by limiting Russia’s access to international capital, actually make it harder for Russian banks to lend to Ukraine.

“If our European and American partners want to help Ukraine, how can they undermine the financial base by limiting our financial institutions’ access to world capital markets? Do they want to bankrupt our banks? In that case, they will bankrupt Ukraine. Have they thought about what they are doing at all or not? Or has politics blinded them? As we know, eyes constitute a peripheral part of brain. Was something switched off in their brains?” (‘”Politics blinded them?” Putin says sanctions against Russia may backfire on Ukraine’, rt.com, 15 November 2014)

In the same interview, Putin said that whilst sanctions targeting Russia’s financial, energy and defence sectors had made an impact, the economy continued to achieve modest growth. He also suggested that the sanctions could act as an unintended stimulus to rebalance the Russian economy away from excessive reliance upon revenue from mineral wealth.

“The comfortable life, when all we had to do was produce more oil and gas, and to buy everything else, is a thing of the past. Now we must think about producing goods ourselves, not just oil and gas”, he explained, expressing confidence that Russia was able “to address any technology issues independently, including in the defence sphere”.

Partisans dig in for the winter

It must be understood that the only thing standing in the way of a complete genocide in the Donbass is the steadfastness of the anti-fascist resistance, now hunkering down for a long and bitter winter. Heavily outgunned and outnumbered, the militias of the Donetsk and Lugansk People’s Republics have nevertheless succeeded in fighting the regime’s forces to a standstill.

The real character of the two sides in this war – a war be it remembered that was provoked by imperialist meddling – is made clear in this report from the Gorlovka-Enakievo crossroads, where a partisan roadblock on the Donbass frontline stands opposed to a large detachment of the Ukrainian army at Debaltsevo. Manning this roadblock are people from all walks of life – miners, builders and metallurgists – and of all ages, with the oldest approaching seventy.

The report explains with what care the partisans have prevented regime propaganda from dividing the militias from the people. “The township population recognises the militiamen as their protectors, although they had to find ways for mutual understanding in the beginning – there are few who would be pleased at the establishment of a military facility next to their house.

“Ordeals brought the people together: during the fire attacks, the militiamen would take the elderly and the children to safe places. Also, with the help of the militia, a free canteen was opened in the neighbouring village during the days of blockade.”

The regime forces, too cowardly to confront the militia directly (despite their superiority in arms and numbers), have been routinely resorting to collective punishment, reminiscent of the policy of collective reprisals practised by the fascists in World War II.

“After the punitive troops took the neighbouring town of Uglegorsk, we were shelled for two weeks. Then it stopped,” the commander says. “They don’t fire at us any more – they fire at civilians, although the coordinates of our roadblock have been leaked onto the internet by the Ukies, including the placement of barracks. What more is there to say?

“While firing here, they hit a man’s house – his car and barn were burned, the gate flew across the whole yard and landed at the opposite end of the garden. Even though it was a huge iron gate, and the yard wasn’t small at all … In the summer, when we were based in Uglegorsk, I saw with my own eyes a child torn to pieces by a Ukrainian shell. He was only about six years old. Is it normal?

“At the punitive troops’ roadblocks, people are asked about the starting date of the school year. Why? To eliminate us by killing our children? That will only make us furious! If they want to fight so much, they should fight against us! They have the advantage in numbers, so why don’t they start a close-quarters attack? No, they are not brave enough for close-in fighting, firing with artillery …”

Some of those manning the roadblock spoke movingly of an earlier battle in which they had taken part – a battle against enormous odds on the streets of Uglegorsk. A militiaman took up the story:

“There were few of us – only around eighty people. We had no tanks or armour, only mortars and machine guns. We held back the enemy’s assault for around six-and-a-half hours. The commander gave the order to retreat to those whose ammunition was spent. Those with ammunition held their positions.

“When the ambulance took the wounded away, the Ukies intentionally fired at them – directly at the ‘red cross’. The next day, the Ukrainian press was carping that they had defeated ‘Russian special forces’. But there were no special forces, all were locals.” (‘Today the only synonym for “peace” is “The victory of Novorossiya”‘, posted by Loga Luzanova, slavyangrad.org, 17 November 2014)