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The Capitalists Are Circling Over Ukraine

July 5, 2023

By Thomas Fazi

Two weeks ago, thousands of representatives from businesses and governments from across the world gathered in London to “support Ukraine’s recovery”. But was the gathering of all those Western corporate elites at the Ukraine Recovery Conference entirely altruistic? There are, after all, massive profit opportunities being created by the war.

Last year, the Ukrainian government essentially outsourced the entire post-war “reconstruction” process to BlackRock, the world’s largest asset management firm. They signed an agreement to “provide advisory support for designing an investment framework, with a goal of creating opportunities for both public and private investors to participate in the future reconstruction and recovery of the Ukrainian economy”. In February, J.P. Morgan was brought on board as well.

The two banks will run the Ukraine Development Fund, which aims to raise private investment in projects potentially worth hundreds of billions of dollars across sectors including tech, natural resources, agriculture and health. BlackRock and J.P. Morgan are donating their services, but, as the Financial Times noted, “the work will give them an early look at possible investments in the country”. The opportunities are significant, particularly in the agricultural sector: Ukraine is home to a quarter of the world’s chernozem (“black earth”), an extraordinarily fertile soil, and before the war it was world’s top producer of sunflower meal, oil and seed, and one of the biggest exporters of corn and wheat.

From certain perspectives, the war is clearly good for business: indeed, the greater the destruction, the greater the opportunities for reconstruction. At Davos this year, Larry Fink, CEO of BlackRock, said he hoped the initiative would turn the country into a “beacon of capitalism”. David Solomon, CEO of Goldman Sachs, also spoke cheerily of Ukraine’s post-war future. “There is no question,” he said, “that as you rebuild, there will be good economic incentives for real return and real investment.” […]

After 2014, the West’s economic agenda was stepped up once again. Western multinationals had long had their eyes on Ukraine’s vast agricultural wealth, but a 2001 moratorium on the sale of land to foreigners had always represented an obstacle to unrestrained privatisation. As post-Maidan governments turned again to the IMF for financing, aid was conditioned on a series of land reforms that would finally allow foreign corporations to acquire vast tracts of the country’s farmland. In the 2015 TV series, Servant of the People — which starred Zelenskyy as the fictional president, Goloborodko — the conditions required by the IMF for a new loan are rejected and the Western delegation is expelled. But in reality, things went rather differently. In 2020, Zelenskyy gave in to the IMF’s demands and finally repealed the moratorium.

“Agribusiness interests and oligarchs will be the primary beneficiaries of such reform,” said Olena Borodina of the Ukrainian Rural Development Network. “This will only further marginalise smallholder farmers and risks severing them from their most valuable resource.” But the World Bank could barely contain its excitement, gushing: “This is, without exaggeration, a historic event.” Even though the new law isn’t set to come into force until next year, US and Western European agrobusinesses have already bought up millions of hectares of Ukraine’s farmland — with 10 private companies reportedly controlling most of it. […]