Ukraine and the New Economic Cold War

ABSTRACT

This paper examines the politics of two rival loans to Ukraine, one from Russia and one from the IMF. While the Russian loan was made at the behest of the elected government of Ukraine as a gesture of solidarity between two closely intertwined post-Soviet economies experiencing similar difficulties, the IMF loan was not only a tool of vain US policy to retain purchase on fast-developing events in Ukraine, it was made in violation of the IMF’s own rules. The loans form a critical chapter the contemporary transition from the geopolitical economy of US and Western dominance to one of multipolarity.

KEYWORDS:

• New Cold War
• International Monetary Fund
• US power
• multipolarity
• Russia
• Ukraine

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Michael Hudson is president of the Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street financial analyst, distinguished research professor of economics at the University of Missouri, Kansas City and author of Killing the Host (2015), The Bubble and Beyond (2012), Super-Imperialism: The Economic Strategy of American Empire ([1968] 2003), Trade, Development and Foreign Debt ([1992] 2009) and of The Myth of Aid (1971), amongst many others.

Notes

1 I describe the US strategy in Super Imperialism: The Economic Strtegy of American Empire (Hudson [1972] 2002) and Global Fracture: The New International Economic Order (Hudson [1979] 2005).

2 I describe the IMF and World Bank’s roles in de-industrializing Russia and other post-Soviet economies in “Неолиберальная налоговая и финансовая политика приводит к обнищанию России” (Hudson 2012).

3 The SCO was created in 2001 in Shanghai by the leaders of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. India and Pakistan are scheduled to join, along with Iran, Afghanistan and Belarus as observers, and other east and Central Asian countries as “dialogue partners.” See Wheatley (2009).

4 The Eurasian Economic Union was created in 2014 by Russia, Belarus and Kazakhstan, soon joined by Kyrgyzstan and Armenia. ASEAN was formed in 1967, originally by Indonesia, Malaysia the Philippines, Singapore and Thailand. It subsequently has been expanded. China and the AIIB are reaching out to replace World Bank. The United States refused to join the AIIB, opposing it from the outset.

5 Aslund was a major defender of neoliberal shock treatment and austerity in Russia, and has held up Latvian austerity as a success story rather than a disaster.

6 Siluanov (2015) added:

Russia’s financing was not made for commercial gain. Just as America and Britain regularly do, it provided assistance to a country whose policies it supported. The United States is now supporting the current Ukrainian government through its USAID guarantee programme.

7 I provide a narrative of the Greek disaster in Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy (Hudson 2015b).

8 I provide a narrative of the Greek disaster in Killing the Host (Hudson 2015b).

9 The article added: “the Russian government confirmed to Euroclear, at the request of the Ukrainian authorities at the time, that the Eurobond was fully owned by the Russian government” (Rapoza 2015).