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How Canada Played a Key Role in Neoliberalizing Ukraine

May 18, 2023
The Canada Files

Peter Korotaev

The 2019 ‘Ukraine Reform Conference’ in Toronto

The ‘Ukraine Reform Conference’ is as an annual event that engages political leaders from NATO countries, the G7, the European Union and private think tanks in key reforms aimed at reforming Ukraine’s economy.

‘Reform’ is a favorite buzzword among liberals in post-2014 Ukraine, following the western sponsored Maidan coup. It implies a set of initiatives advocated by loyal foreign allies designed to lift Ukraine out of its poverty. In reality, it’s a politically neutered way to describe neo-colonial economic liberalization, the topic of the previous two articles.

One detrimental reform seen in post-maidan Ukraine was the elimination of food price regulation in 2017. Along with the destruction of Ukraine’s domestic food production as a result of trade liberalization, this lead to food scarcity and hunger even exceeding levels of many Latin American countries.

All the usual suspects were present at the 2019 Ukraine Reform Conference – Chrystia Freeland, Justin Trudeau, and delegates from other NATO countries and Ukraine. The key issue on the agenda was “the irreversibility of reforms in Ukraine”. Apart from the undesirability of said reforms, ‘irreversibility’ hardly seems like a democratic way for a group of foreign countries to advocate for implementing economic reforms in a given country. For the Ukraine Reform Conference however, it’s a go!

In fact, the ‘irreversibility’ of these reforms directly rules out the pursuit of democracy. 2021 saw the legally dubious sanctioning of leaders of political parties such as the Opposition Platform for Life (OPFL), by presidential decree. This party, which primarily represented the industrial workers of Ukraine’s south-east, advocating a pro-peace and anti-IMF platform, consistently ranked high among voters. At the start of 2021, it often came a close second in polls after Zelensky’s “Servant of the People”. Following Zelensky’s 2021 unilateral bans and sanctions against the OPFL’s media voice and leading politicians, the party lost a third of its voters. Bypassing due process within the court system, associated media groups which described the negative effects of IMF-sponsored economic liberalization were also closed in 2021 by order of Zelensky’s National Security and Defense Council. This included ZiK, Strana, 112, NewsOne and Ukrlive among others, with Zelensky even sanctioning the Editor in-Chief of the social democratic opposition media source Strana. The reasoning for such crude censorship was vague and criticized by the European Federation of Journalists.

The west was also complicit in suppressing opposition parties, with US officials following in lockstep with Zelensky in sanctioning these Ukrainian political figures critical of western integration. At a high level, imposing sanctions is juridicially (administration of the law) absurd since opposition figures in foreign countries don’t pose any direct threat to the USA. OPFL-affiliated independent parliamentarian Andriy Derkach was one of those sanctioned; largely known in the west for bringing to light Hunter Biden’s corrupt affairs in Ukraine.

Further, in a long article marking one year since Russia’s large-scale military operation against Ukraine, the media portal ‘Strana’ (sanctioned by the Zelensky government) published an article arguing that the banning of ‘pro-Russian’ parties and media was the tipping point that pushed Russia to war in 2022. A more recent Russian opposition longread has also repeated this argument. Given that all pro-peace and geopolitical neutrality political forces had been banned, there was no longer any reasonable hope for Ukraine to remain a neutral, non-NATO country through democratic means.

Agricultural ‘aid’ and loans

A look at the kind of agriculture Canada wants to see in Ukraine can be seen in their choice of aid projects. In 2015, the Canadian minister of foreign trade Ed Fast announced $52 million USD in aid for Ukrainian economic liberalization reforms following the 2014 coup.

One of these projects was $13.5 million to aid Ukrainian grain farmers. Rather than supporting the diversification of Ukraine’s agriculture Canada opted instead to promote the further development of big monoculture farming of Ukraine as a corn, wheat, and sunflower oil republic. As we saw in the second article of this series, this form of intensive monoculture farming worsens food insecurity and the long-term degradation of agricultural soil.

In part one of this series, we discussed a study by the ‘Ukraine Land Transparency Project’ which claimed that land privatization led to a higher GDP growth rate, and more restrictions placed on the land market (including restricting the access by foreigners), lower the growth rate. Interestingly, this NGO is funded by the European Union (EU) and World Bank (WB), and led by Klaus Deininger, an economist who works in the WB. Canada, a founding member of the World Bank Group, is the 11th largest shareholder and holds a permanent seat on the 25-member Board of Executive Directors, along with other mainly western countries. Canada holds great power and influence in determining the direction of WB funds; in fact, it is the sixth highest donor to the WB concessional fund for loans and grants to poor nations.

A recent study by the Oakland Institute think tank has illuminated the role of these financial institutions (as well as those of the European Union) in accelerating Ukrainian agricultural privatization. Even before Euromaidan, the WB provided an $89 million loan in 2013 to privatize state land and move towards the privatization of individually owned land in Ukraine, which makes up the majority of agricultural land. The IMF gave a $17.5 billion USD loan in 2015 and a $3.9 billion USD loan in 2018, both tied to land privatization. After calling for land reform again in 2017, the IMF set up a working group with Ukrainian state ministries and the WB to organize land privatization.