MARKETING UKRAINE’S RECONSTRUCTION TO FUEL THE WAR

Marketing Ukraine’s Reconstruction to Fuel the War — Strategic Culture (strategic-culture.su)

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 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 deserve mention.

The speed with which fantastical narratives of recovery and reconstruction were churned out shouldn’t surprise anyone: 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 and the storytellers are directly or indirectly linked to governments and lobbies that are involved both in the destruction of Ukraine and the Ukrainization of Europe, a process designed to fully control, militarize and plunder the Old World.

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

For instance, there is strong disagreement as to what constitutes ‘destruction’, when the ‘destruction’ of Ukraine started and who should be blamed for it. The semantic field, like history, is a contested territory.

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 centre in the USSR.

Steps along a continuum of destruction

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.

Ukraine was targeted by two colour revolutions that led to regime change and civil war, and was wrestled away from its largest economic partner, Russia. Its history was erased and rewritten, neoliberal prescriptions destroyed its economic and social fabric and led to a neocolonial form of governance.

Ukraine joined Europe’s nefarious Eastern Partnership(1) 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 was overthrown by a U.S.-sponsored coup in 2014.

On 10 December, 2013, Ukrainian president Viktor Yanukovich 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: not only does this lender of last resort impose 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 on which the occupier can write his 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 propaganda. In any case, they promise a future utopia worth killing and dying for.

Western capitalism has created its own secular eschatology, replacing the promise of eternal life after death with the hope of a better world in the future, arousing expectations that are constantly disappointed. Unable to solve its growing contradictions in the present, capitalism defers the solution to the future. The promised utopia, embedded in both the environmental and technological discourses, is an attempt to deflect attention from the destructive tendencies inherent to capitalism which yet again has resorted to war, and expanded military budgets, to pull itself out of its systemic crises. Wars, with their cycles of destruction and reconstruction, provide critical economic stimulus vis-à-vis stagnation in the West, and an outlet for overaccumulated capital. The centre of economic gravity has shifted to Asia, a market where the U.S. faces tough competition from China, and as U.S. hegemony wanes, Western elites are faced with the choice of propping up the old hegemon, or seeking an arrangement with emerging powers, an option that would not only reduce their sway and outrageous profits, but also accelerate U.S. decline.

Since U.S. military power and influence over the global economy have long been intertwined and losing one would precipitate the loss of the other, the U.S. has tightened the grip on its vassals, doubled down on its hegemonic ambitions and would rather indulge in grandiose, and dangerous, fantasies than accept the emergence of a multipolar reality. Fantasies cannot deliver real growth but they help manipulate market sentiment, and that’s why the Empire is investing a considerable part of its resources in colonizing minds and policing its 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.

“War is Peace. Slavery is Freedom. Ignorance is Strength”

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 generate narratives that help shape the discursive space, engineer a perception of universal 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, regardless of the devastating human and economic losses they are incurring.

If those who organized and attended the recovery conferences that have been held so far never talked about peace it 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 (2) 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 handlers. 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 Mirotvorets online 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, allow the transatlantic 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 favourite think tanks, published a bizarre article titled “Rebuilding Ukraine after the War”(3). 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 immediately framed by Western media 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. Tightly controlled news outlets ensured that the Western public would never hear about the role played in the destruction of residential districts by Ukrainian nationalists who set up firing positions, deploy armoured 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 US 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’s 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 opinion makers, are mainly addressed to those who need to be reassured that they stand to benefit from the escalation of this conflict, regardless of present losses. And that includes a multitude of stakeholders, both in NATO countries and in Ukraine.

Priming Ukraine for war and expanding the network of its supporters

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. And 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. Members of the Ukrainian government and para-government, notorious “friends of UK/raine” such as Chrystia Freeland and other rabid Anglophile Russophobes, many hailing from the Baltics and Eastern Europe, outnumbered less invested participants, exposed them to their fanatical views in order to facilitate their radicalisation and recruitment to the cause. 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 (4), 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 labour law, land market reforms, decentralization, forced derussification, 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, and 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 whatever stood in the 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 US 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 to 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 and resources.

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 military intervention in 2022, the “Ukraine Reform Conference” (URC) was quickly renamed “Ukraine Recovery Conference (URC). But the continuity is strikingly obvious: 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.

Increasing pressure on Europe

Brookings, the US 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 held in July “was a missed opportunity because the donor countries did not come prepared with any agreement on coordination mechanisms, a division of labour, or necessary funding levels. In addition, the United States was not represented by officials with seniority commensurate to the European representation.”(5)

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 had “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.”(6)

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: in this scam Germany, France and Italy are the designated suckers.

If Ukraine is the bait, Europe is the big fish and the U.S. would stop at nothing to achieve its goals: persuasion tactics eventually escalated into terrorism, as evidenced by the Nord Stream sabotage.

For all their pledges to help Ukraine recover, those who took part in ‘Recovery/Reconstruction’ conferences seemed bound by an oath to never advocate for peace negotiations with Russia. But wouldn’t peace be a necessary condition for recovery? Well, it depends on what we mean by recovery.

For instance, the London-based Centre for Economic Policy Research (CEPR) clearly spelled out its idea of ‘recovery’ in a document titled “Macroeconomics Policies for Wartime Ukraine”(7), which outlined policies to “put the Ukrainian economy on a sustainable trajectory for the duration of the war.” The same policy recommendations became a dogma in Davos, where the World Economic Forum cult members emphasized the need to start reconstruction while the destruction is still going on. For the war to continue the Ukrainian regime has to be bankrolled by foreign donors and Ukrainian refugees have to go home, that is to a place described as the “hell of war” in the same sentence: “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.”(8)

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, and budget deficit projected to reach more than USD 45 billion by the end of 2022 why would international investors be interested in a failed state at war? Ask BlackRock and JP Morgan.

Wall Street vultures swoop in

A heavily indebted country on its knees can’t prevent the outright sale of its assets and resources. And if that country also happens to be at war “to defend Western values and democracy”, it collects billions of dollars, euros, yens in financial and military aid.

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 a Private-Public Partnership (PPP) attractive. But all this is predicated on Ukraine winning the war and remaining under Western control, something that only those who drink the Kool-Aid are still convinced of.

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. The problem is, there isn’t much liquidity around in Josep Borrell’s European garden, nor in Joe Biden’s Land of the Free for that matter. Prices and the cost of money have risen sharply, market sentiment has slumped, there is no easy fix for rampant inflation, recession is looming in Western countries, debt-GDP ratio is shocking and the financial system is broken.

While Western political leaders, financiers and business moguls may delude themselves that “everything is fine” in their parallel universe, as witnessed in Davos, this 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 (9), 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”.

In November 2022 BlackRock’s cooperation with the Ukrainian government was formalized in a Memorandum of Understanding (MoU): it will advise the Ministry of Economy.

BlackRock has become the world’s largest asset manager thanks to crises: after the 2001 and 2008 financial crashes it played a major role in advising governments and corporations despite being directly involved in both crises, and was appointed by the Federal Reserve to manage its massive corporate debt purchase program in response to the Covid-19 crisis. Each Wall Street bailout is essentially a bailout of the previous bailout with the Fed pumping more billions into the financial sector under cover of some emergency or crisis. The bubble gest bigger at each bailout, the elites at the top of the food chain ammass ever more power and wealth at the expense of everyone else.

In February, JP Morgan, the largest bank in the U.S., followed BlackRock’s lead and 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.

If you want to drive investors, corporate and institutional ones, to yet another fraudulent scheme you have to dress it up nicely: ‘Investing in Ukraine’s Reconstruction’ looks and sounds much better than ‘Funding a proxy war’ to whoever manages your pension fund.

The bolder the scheme, the more it has to rely on public funding, which is hardly a problem when the revolving door with government allows Wall Street behemoths to call the shots.

Why would the Ukraine’s reconstruction scheme be any different?

Talking up ‘reconstruction’ has the additional benefit of distracting attention from BlackRock’s and JP Morgan’s vested interest in the continuation of war, as they own shares in the top military contractors and arms manufacturers in the U.S. But they need not worry about media scrutiny: they hold large shares in mainstream media companies.

In Davos, Jamie Dimon, JP Morgan’s CEO, warned that the conflict in Ukraine is an inflection point that could impact the Western world for decades and restructure the global order. That is so obviously true that it is almost not worth saying, but judging by the trajectory of the war in Ukraine, the world order that will eventually emerge from it might not be to Dimon’s liking.The world is moving toward political multipolarity, established twentieth century powers such as the U.S. and Europe are ceding importance and influence to faster-growing Asia, with China in the leading position. The end of U.S. unipolar moment cannot be prevented and Western elites are aware that the fraudulent, inequal system they owe their power to is doomed. Naturally, they will keep milking it for as long as they can.

1. Eastern Partnership, the EU’s Geopolitical Gamble Leading Europe Into the Abyss — Strategic Culture (strategic-culture.org)

2. European Peace Facility — Consilium (europa.eu)

3. Rebuilding Ukraine after the War (csis.org)

4. ukraine-government-priority-action-plan-to-2020.pdf (publishing.service.gov.uk)

5. Takeaway from Berlin Ukraine recovery conference: Donor coordination for Ukraine is coming but not here yet (brookings.edu)

6. Financing and governing the recovery, reconstruction, and modernization of Ukraine (brookings.edu)

7. Macroeconomic Policies for Wartime Ukraine | CEPR

8. Ukraine’s future must be green, inclusive and technology-driven | World Economic Forum (weforum.org)

9. BlackRock в Украине: что на самом деле будет делать здесь инвестиционный гигант (minfin.com.ua)