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Marketing Ukraine’s Reconstruction to Fuel the War

By Laura Ruggeri | Strategic Culture Foundation | February 23, 2023

Immediately after the start of Russia’s military operation in Ukraine, key players in the coalition supporting Ukraine, as well as transatlantic financial institutions and think tanks, were already discussing the governance and financing of Ukraine’s reconstruction. They invariably framed it as a historic opportunity for the country: like a phoenix rising from the ashes, Ukraine would become a beacon of freedom, democracy and rule-of-law, a testimonial for Build Back Better, a “green and digital economy” success story; the country would leapfrog several stages of economic and governmental development and its economic growth would replicate Germany’s post-war boom. Unsurprisingly, the more recent and far less inspiring examples of Western-led ‘reconstruction’ in Iraq, Libya and Afghanistan didn’t earn mention.

The speed with which fantastical narratives of recovery and reconstruction were churned out shouldn’t surprise anyone because they had been concocted years earlier as part of several ‘reform plans’ for Ukraine. One could say they are hardwired into the overall strategy of this proxy war against Russia as they are aimed at securing political, military and financial support for Ukraine to prolong the war rather than an incentive to negotiate peace. All those who produce these narratives are directly or indirectly linked to governments that are involved both in the destruction of Ukraine and the Ukrainization of Europe, a process designed to fully control, militarize and loot the Old World.

Paying lip service to the idea of reconstruction is also the best way to distract attention from one’s investment in the business of war. For example, JPMorgan Investment Management owns more than $2.5 billion worth of Raytheon stocks and more than $1.3 billion worth of Northrop Grumman and General Dynamics securities, as of February 15. As long as Ukraine keeps consuming U.S. military products, the rising profits for arms companies – satisfies investment funds. And rich corruption in the U.S., EU and Ukraine. As long as Ukraine is of any interest in terms of consumption of U.S. military products, there will be no peace on its territory.

There is little doubt that Ukraine will need rebuilding once the war eventually ends, but ‘destruction’ and ‘reconstruction’ mean different things to different people.

For instance, there is strong disagreement as to what constitutes ‘destruction’, when the ‘destruction’ of Ukraine started and who should be blamed for it.

Those who have been following Ukrainian affairs without ideological prejudice, and with a modicum of intellectual honesty, know that at the time of the dissolution of the USSR, Ukraine was an economic powerhouse, the third industrial power of the Soviet Union after Russia and Belarus, and its breadbasket. The Soviet republic had aerospace, automobile and machine tool industries, well-developed mining, metallurgical and agricultural sectors, nuclear, oil refining and petrochemical plants, tourism and commercial infrastructures and the largest shipbuilding center in the USSR.

Since its independence in 1991, Ukraine’s GDP has lagged behind the level it reached in Soviet times, industry declined, and the population decreased by about 14.5 million people in 30 years due to emigration and the lowest birth rate in Europe. Ukraine has also become the third largest IMF debtor and Europe’s poorest country. These negative records cannot be blamed solely on Ukraine’s systemic and staggering corruption: the corrupt networks bleeding Ukraine are truly transnational. If the best way to rob a bank is to own one, then the best way to plunder a country is to control its elites. Which is exactly what Western kleptocratic networks have been doing for decades with the help of their local facilitators and enablers.

Ukraine was targeted by two U.S.-funded color revolutions that led to regime change and civil war, was wrestled away from its largest economic partner, Russia; its history was erased and rewritten while an artificial identity was manufactured and imposed on its population; neoliberal prescriptions destroyed its economic and social fabric and led to a neocolonial form of governance.

Though Ukraine joined Europe’s nefarious Eastern Partnership in 2009 and has been teeming with Western NGOs, economic and political advisers since its independence, the country’s indentured servitude and captivity to Western interests was cemented after the last Ukrainian government to object to the IMF’s harsh conditions – including steep budget cuts and a 40-percent increase in natural-gas bills – was overthrown by a U.S.-sponsored coup in 2014.

On 10 December, 2013, Ukrainian president Viktor Yanukovych stated that the conditions set by the IMF for loan approval were unacceptable: “I had a conversation with U.S. Vice President Joe Biden, who told me that the issue of the IMF loan has almost been solved, but I told him that if the conditions remained we did not need such loans“. He then broke off negotiations with the IMF and turned to Russia for financial assistance. It was the sensible thing to do, but cost him dearly. You can’t break the shackles of IMF debt with impunity, this lender of last resort not only imposes its usual shock therapy of austerity, deregulation, and privatization so that the vultures can swoop in, it also furthers and protects U.S. interests.

If those who destroyed a country are allowed to be involved in its reconstruction, then reconstruction will inevitably be just a point on the continuum of conquest, occupation and looting, but with better optics. Destruction produces that blank slate that has always been colonialism’s seductive promise, on that slate you can write your own rules: “To plunder, butcher, steal, these things they misname empire: they make a desolation and they call it peace”. Tacitus knew both the reality and the spin of Roman imperialism.

One can only wonder if those who talk about ‘reconstruction’, ‘recovery’, ‘reform’, ‘rules-based order’, ‘reset’ or whatever buzzword is fashionable at the moment are aware of the brutal reality or truly believe their own spin. In any case they promise a future utopia worth killing and dying for.

The capitalist, imperialist West has created its own eschatology, embedded in both the environmental and technological discourses. Thirty years ago, Cardinal Ratzinger, the future Pope Benedict XVI, had cautioned an audience in Prague, whose newborn democracy was teeming with promise and perils, about the difference between eschatology – understanding and belief in the “end,” i.e., eternal life – and utopia. Belief in the latter, which he defined simply as “the hope of a better world in the future,” had taken the place of eternal life across the West. Man’s hubris replaces eschatology with a self-made utopia which intends to fulfill man’s hopes. Constantly allured by newer technocratic abilities, the utopians end up sharing Tantalus’ fate, and are condemned to live in Hades, tormented with the sight of something desired but out of reach, teased by arousing expectations that are inevitably disappointed.

The more secular-minded may remember what Karl Marx wrote about the destructive (and self-destructive) tendencies inherent to capitalism. It’s by causing large-scale loss that it enables new wealth to be created. Wars and economic crises serve the purpose as they allow capitalism to start a new cycle of wealth creation for an ever-shrinking class of owners.

But the neoliberal capitalist system is fast running out of creative schemes to forestall its collapse and the old ones no longer deliver the desired results because they are predicated on rules and conditions set by the U.S., and the transnational institutions it controls. As U.S. power wanes, the global oligarchy that depends on it is faced with the choice of defending that power at any cost and against all odds, or seeking an arrangement with emerging powers, an option that would not only reduce its sway and outrageous profits, but also accelerate U.S. decline. Since World War II, U.S. influence over the global economy and military power have been intertwined and losing one would precipitate the loss of the other. The engine of world economic growth has moved to Asia, with China in a leading position, and the U.S. has chosen to tighten the grip on its vassals, double down on its hegemonic ambitions and indulge in grandiose, and dangerous, fantasies rather than accept the emergence of a multipolar reality. Since fantasies cannot deliver real growth, let alone prosperity, the Empire invests a considerable part of its resources in colonizing minds and policing narratives. The job of those who are simultaneously planning ‘destruction’ and ‘reconstruction’ is to reduce the cognitive dissonance between the present misery and picture-perfect manifestos of a bright future.

Selling a war requires all hands on deck, and that’s why think tanks and marketing specialists have been involved from the early stages. They churn out narratives that help shape the discursive space, engineer a perception of global support for Ukraine, provide talking points, and versions of the truth, to both politicians and the media. They have to motivate Ukrainians to keep fighting and European vassals to keep funding the war and arming Ukraine, no matter the cost to their economy.

If those who attended recovery conferences never talked about peace is also because the possibility of peace negotiations with Russia has been performatively and normatively excluded from the Western discourse. The last time Western leaders claimed they wanted peace in Ukraine, they were lying. As we now know, the Minsk Agreements were signed by Angela Merkel and François Holland only to win time for Kiev to prepare for war.

The EU was so committed to peace that in a truly Orwellian fashion, in 2021 established the European Peace Facility (EPF) to bankroll military operations, provide military equipment and training to unnamed “EU partners” – Ukraine couldn’t be openly mentioned yet. The fund, worth €5 billion, was financed outside the budget, for a period of seven years.

When in October 2022 Volodymyr Zelensky signed a bizarre decree prohibiting talks with the current Russian leadership he simply formalized something that had already become a dogma among his allies. Six months earlier, in April, Boris Johnson went to Kiev to pressure Zelensky to cut off peace negotiations with Russia, because the two sides appeared to have made some tenuous progress during talks in Istanbul. In March Denis Kireev, a member of the Ukraine delegation who had taken part in the February peace talks in Belarus, was shot dead by his country’s security service. Israeli PM Naftali Bennet, who had also attempted to mediate a peace deal between Russia and Ukraine, revealed how the Anglo-Americans, with Boris Johnson in the role of chief bully again, blocked his efforts.

Peace advocates, including Roger Waters, Pink Floyd’s former frontman, were added to the infamous Myrotvorets online [assassination] database. Those who profit from war and want to see Russia weakened would stop at nothing to prevent peace talks. While Europeans are grappling with the ever growing cost of an American proxy war in their continent, they need a compensatory fantasy to support the absurd notion that a peace settlement in Ukraine would threaten their security and not be in their best interests. Narratives of reconstruction, seamlessly woven into delusions of Ukraine’s victory from the start, allow the transnational party of war to present itself as a force for good and a driver of future growth.

The reconstruction marketeers have aggressively tried to occupy the moral high ground by evicting the peacemakers and to do so they had to bolster the argument that war couldn’t be prevented nor stopped.

In March 2022, less than a month since Russian troops had crossed the Ukrainian border, the Center for Strategic and International Studies (CSIS), one of the U.S. military-industrial-intelligence complex’s favorite think tanks, published a bizarre article titled “Rebuilding Ukraine after the War”. Its author compared the destruction of Ukraine’s infrastructure to a “natural” disaster such as the hurricane that destroyed Puerto Rico in 2017 and argued that reconstruction would provide an opportunity “to improve on the past”, paving the way for a radiant future, a techno-utopia as orderly, clean and green as an architectural rendition.

Framing war as a “natural disaster”, as opposed to a man-made one, would allow those who militarized Ukraine and sabotaged all peace agreements, to pre-empt any serious discussion about the causes of, and possible solutions to this conflict. If the war in Ukraine was as sudden and inevitable as a hurricane then it would be pointless to seek an explanation for it other than “Putin is mad/bloodthirsty/evil…” or “Russia is an imperialist country”.

The ensuing devastation was also framed as the result of Russian forces’ congenital appetite for wanton destruction – in the West Nazi tropes are back in fashion and Russian soldiers can be described as “barbaric Asiatic hordes” with total impunity. Western media ensured that their public would never hear about the role played in the destruction of residential districts by Ukrainian nationalists who set up firing positions, deploy armored vehicles, conceal artillery pieces and MLRS in densely populated areas and use civilians as human shields. Hardly natural. Even less natural was the outbreak of this war, unless you consider NATO’s expansion and U.S. geopolitical goals as part of a divine plan. Mind you, some do and call it “manifest destiny”.

CSIS put forward arguments and plans that would later be expanded at conferences about Ukraine reconstruction. “Thinking about recovery means envisioning a post-conflict future, and that links to the twin messages of hope and the necessity to keep fighting.” The twin messages, constantly amplified by Western-controlled media, are mainly addressed to those who need to be reassured that they stand to benefit from the escalation of this conflict, regardless of the huge losses they are currently incurring. And that includes a multitude of stakeholders, both in NATO countries and in Ukraine.

There have been several antecedents to recent conferences in which representatives of Western governments, financial institutions and corporations discussed ways to keep Ukraine fighting “to the last man” while baiting it with promises of reforms and reconstruction, but one stands out as a direct progenitor. It had all the hallmarks of a British influence operation.

On July 6, 2017 the UK Foreign Office headed by Boris Johnson organized and hosted the first Ukraine Reform Conference in London. Ukrainians, notorious “friends of UK/raine” such as Christya Freeland and other rabid Anglophile Russophobes, many hailing from the Baltics, would outnumber less invested participants, expose them to their extremist views in order to facilitate their radicalization and recruitment. The power of conformity, suggestibility and normative social influence would ensure that participants who had previously held moderate views would gravitate towards the extremist opinion of the majority.

The alleged purpose of this conference was to seek political and financial support for Ukraine’s 2020 Reform Plan, a neoliberal roadmap designed to create a more profitable and less unpredictable environment for Western corporate interests while priming the Ukrainian population and army for war. This medium-term Reform Plan defined the main objectives and areas of the Ukrainian Government activity for 2017-2020 and formed the basis for the strategic plans of ministries and other executive bodies. It was predicated on privatization of state-owned enterprises, deregulation, judicial reform, amendments to the labor law, land market reforms, decentralization, forced de-Russification, patriotic education, transformation of the armed forces into a “modern and effective army in line with NATO standards” by increasing its military spending to 6% of GDP, integration into the European political, economic and legal space. In short, this was a roadmap for the complete hijacking of Ukraine’s economic, political, and social institutions, the demolition of what stood in its way, and further militarization of the country.

The conference also served other purposes. The main proponents of Anglo-American eastward expansion, who are deeply invested in Ukraine, after the election of Donald Trump couldn’t fully rely on the U.S. government to further their agenda: Trump’s “America First” foreign policy had strained relations with NATO allies and frozen military aid to Ukraine – arms sales were ok, freebies not so much. London was more than eager to pick up the mantle and ensure Ukraine stayed the course and remained on top of the transatlantic agenda. By taking the lead in coordinating and strategizing support for Ukraine, the UK government also saw an opportunity to strengthen British influence especially at a time when Brexit negotiations had just started and London feared losing its leverage in Europe. British elites were determined to put their country “at the beginning of the line” in the looting of Ukraine’s assets while salivating at the prospect of looting Russian assets too.

The gambit seemed to pay off: the following years attendance at the annual conference grew, including a larger number of representatives from the United States, NATO, OECD, G7 and European countries, OSCE, Council of Europe, IMF, European Investment Bank, European Bank for Reconstruction and Development, and the World Bank.

After Russia’s intervention in 2022, the “Ukraine Reform Conference” (URC) was quickly renamed “Ukraine Recovery Conference (URC). The continuity is striking: acronym, logo and corporate image remained exactly the same when in July 2022, the conference was held in Lugano, Switzerland.

Unsurprisingly, the Ukraine Recovery Conference in Lugano turned out to be little more than a PR stunt, featured a few squabbles among participants competing for their share in any future spoils of war, and provided an opportunity for Ukraine’s prime minister Denys Shmygal, supported by Liz Truss, to advocate the seizure of frozen Russian assets to fund his country’s reconstruction project. Shmygal’s call sent shivers down the spine of Swiss authorities, because not only would the confiscation of these assets violate and thus undermine international legal rules, it would also deal a mortal blow to Switzerland’s banking industry.

Brookings, the U.S. think tank that was deeply involved in the design and implementation of the original Marshall Plan for the post-war redevelopment of Western Europe, had to admit that the Lugano conference “was a missed opportunity because the donor countries did not come prepared with any agreement on coordination mechanisms, a division of labor, or necessary funding levels. In addition, the United States was not represented by officials with seniority commensurate to the European representation.”

A similar criticism was expressed by the German Marshall Fund of the United States, another U.S. think tank. GMF asserted that the European Commission has “neither the necessary political nor the financial heft” to lead reconstruction. And it advised against creating a new agency or centralized trust fund. Instead, it suggested that the G7 and Ukraine together appoint “an American of global stature” as recovery coordinator “because only the United States will be able to bring together the needed global coalition and forge consensus among Ukraine’s partners.”

The Anglo-Americans who need the EU to fund the war and masochistically support their geopolitical plans were disappointed that the richest EU countries would not cough up the amount of money they expected because in this scam Germany, France and Italy are the designated suckers. The con artists invest in the fraudulent scheme to give it an appearance of legitimacy and win the suckers’ confidence.

If Ukraine is the bait, Europe is the big fish and this crime syndicate would stop at nothing to achieve its goals: persuasion tactics can be escalated to involve some serious arm-twisting, as the Nord Stream sabotage clearly showed.

For all their pledges to help Ukraine “recover”, those who took part in “Recovery and Reconstruction” conferences seemed bound by an oath to never advocate for peace negotiations with Russia. Wouldn’t peace be a necessary condition for recovery? Well, it depends on what we mean by recovery. The main purpose of these conferences is to raise funds for Ukraine’s war chest, build a larger consensus on the seizure of Russian frozen assets, and instill enough hopes of a better future to convince Ukrainians and their partners that they should keep fighting regardless of the devastating human and economic losses they are incurring.

The London-based Centre for Economic Policy Research (CEPR) clearly spelled out this strategy in its Macroeconomics Policies for Wartime Ukraine, which outlined policies to “put the Ukrainian economy on a sustainable trajectory for the duration of the war”. The same policy became a dogma in Davos, where the WEF evil wizards agreed and emphasized the need to start reconstruction while the destruction is still ongoing, as that would drive Ukrainian refugees back home, that is to a place described as the “hell of war” in the same paragraph. “We have a moral obligation to nurture hope for these people and to help them stay strong as they go through the hell of war. Doing so will also encourage Ukrainian refugees to return to their homeland.” The cherry on the cake is the cynical reference to “inclusivity”, because no disability should exempt Ukrainians from contributing to war efforts, they too are called upon to fill positions vacated by the dead and those at the front. “Inclusivity is particularly important. Thousands of Ukrainians have already received long-lasting injuries (…) many of them will need to continue their life and work with disabilities.”

People, military and financial aid are all needed to ensure Ukraine retains enough strength not to collapse while it performs its designated role of proxy. That said, broadcasting donors’ pledges and the promise of foreign investments also serve a strategic purpose: it sends a message that Western countries form a compact bloc that will stick together no matter the cost, and to other nations that there are benefits to alignment with this bloc. All wishful thinking, of course.

With Ukrainian GDP expected to fall by more than 45%, budget expenditures doubling due to increased military spending as well as business and humanitarian support, budget deficit projected to reach more than USD 45 billion by the end of 2022 why would international investors be interested in what is de facto a failed state that is still at war?

Disaster capitalism feeds on shock, and war is the ultimate shock treatment. The privatization of profit and socialization of losses is its mantra and a heavily indebted country on its knees can’t prevent the outright sale of its assets. Rebuilding is never the primary purpose, it’s about reshaping everything. If anything, the stories of corruption and incompetence serve to mask a deeper scandal: the rise of a predatory form of disaster capitalism that uses the desperation and fear created by catastrophe to engage in radical social and economic engineering. After all, war-ravaged countries are in a state of limited sovereignty and any aid money that might pour in is often put in a trust fund, managed by foreign entities. The promise of Ukraine’s reconstruction by a parallel government made up of a familiar cast of for-profit consulting firms, engineering companies, mega-NGOs, foreign governments, international aid agencies and financial institutions would certainly make the prospect of Private-Public Partnership (PPP) attractive. But all this is predicated on Ukraine winning the war and remaining under Western control.

Betting on Ukraine’s victory is a high-odds bet, a very risky bet even for the regular gamblers of the vast casino known as the Western financial system. Yes, debt can be repackaged by lenders into creative securities backed by some pie-in-the sky and sold to global investors, a scam that would make the subprime mortgage crisis pale in comparison. Problem is, there isn’t as much liquidity around in Borrel’s European garden, nor in Biden’s land of the free for that matter. Prices and the cost of money have risen sharply, the market sentiment has slumped, recession is looming in Western countries whose financial system is broken beyond repair, but Western leaders, financiers and business moguls delude themselves they can simply talk up the global economy and resort to their old tricks. Their “everything is fine” message, as witnessed in Davos, is nothing more than one of those “confidence-boosting” exercises their minions practice in front of the mirror.

Attracting foreign investments is far from easy, as the Ukrainian Ministry of Finance has candidly admitted, though he believes that a PPP with BlackRock “can help raise capital even against the background of a bad investment reputation in the past (…) Obviously, private investors in the West will show much more trust in projects or a fund in which a world-renowned company plays some role. Even if it is consulting support. (…) Since investors often have a herd instinct, the option of creating a BlackRock investment fund to accumulate funds from private investors and finance Ukrainian projects is considered optimal”.

Officially, BlackRock’s cooperation with the Ukrainian government was formalized in the Memorandum of Understanding (MoU), which was signed in November 2022. Since then other Wall Street banksters have jumped on the bandwagon. This February, JP Morgan, the U.S.’s largest bank, also signed a MoU with Volodymyr Zelensky with the eye on attracting private capital for a new investment fund seeded with $20 billion to $30 billion in private capital. Jamie Dimon, JP Morgan’s CEO, called the consequences of the conflict in Ukraine “an inflection point for the Western world for a hundred years.”

Well, the decline of U.S. hegemony and the financial, corporate elites that feed on it (the “inflection point”, as Dimon called it) started well before February 2022. The end of U.S.-European domination of world capitalism is upon us as the center of gravity of the global economy shifts to China and the world is moving toward political multipolarity. Western elites are aware that the fraudulent, unequal system they owe their power to is cracking up, and the West’s mother-of-all financial bubbles is about to explode. All their hare-brained schemes are designed to increase debt, and therefore the enslavement of an ever-greater portion of humanity and have increased instability in the system. The COVID-19 pandemic and the Green New Deal were supposed to pave the way for “resetting and reshaping” the world, through the application of new digital technologies for a more regimented, technocratic and authoritarian control over the global population. But it has not gone as anticipated. Instead, the pandemic accelerated all the contradictions and crisis tendencies of financial capitalism. Ukraine, the greatest rock’n’roll swindle of all times might prove to be one hare-brained scheme too far.

For years the Fed, the Bank of England, and the European Central Bank have been printing money, but unbacked fiat currency is a Ponzi Scheme built on treachery and lies: its expansion is financed by the transfer of wealth from everyone for the supposed benefit of everyone… till it all ends in tears for most. Those who have made their fortunes by placing bets on the future, buying or selling options and all sorts of other recondite financial inventions might be lured by the promise of high returns, but many investors will join the pyramid scheme simply because their assets are managed by BlackRock, JP Morgan, Goldman Sachs etc. When the scheme finally collapses, they will be ruined, just like Ukraine.

February 24, 2023 Posted by aletho | Economics, Militarism, Timeless or most popular | China, European Union, NATO, Russia, UK, Ukraine, United States | Leave a comment