Why Ukraine Needs Russia More Than Ever

[swilton]

With country at risk of becoming a failed state, Kiev must recognise that economic survival depends on Moscow not the west

In January, Ukraine’s president, Petro Poroshenko, congratulated the country on surviving its first winter without buying Russian gas. It had instead bought European gas which, as Poroshenko pointed out proudly, was 30% more expensive.


This sums up the core problem facing the Ukrainian economy. It is not corruption, a serious issue about which little can be done in the short term, but the ideologically driven choice to sever all ties with Russia, the country that has historically been its major trading partner and chief investor.


In little over a year, living standards in Ukraine have fallen by half, the currency has lost 350% of its value, and inflation has skyrocketed to 43%. Yet, even as the economy has collapsed, the government has insisted on economic policies that can only be termed suicidal.

By tearing up contracts with Russia in 2014, Ukraine’s defence and aviation industries lost 80% of their income. Once the pride of Kiev, airline manufacturer Antonov went bankprupt and rocket engine producer Yuzhmash is now working just one day a week.


By severing banking ties with Moscow, Kiev has denied itself investment and a vital economic lifeline – the remittances sent back home by zarobitchane, Ukraine’s migrant workers. Up to seven million Ukrainians work in Russia, sending back $9bn in 2014 – three times the total foreign direct investment Ukraine got last year.

Reckless government borrowing has exacerbated the problem. The government was able to write off 20% of its Eurobond debt last October, allowing it to negotiate for the next IMF loan tranche which was expected in December but still not been received.

http://www.theguardian.com/world/2016/mar/09/ukraine-needs-russia-nicolai-petro

[Erich Bloodaxe BSN]

1. Independence is expensive.

The question is always, how much do you value your independence, and what are you willing to give up for it?

[swilton]

2. So how do you define independence?

I would argue that Ukraine can never be culturally (linguistically, geographically, spiritually/religious) independent from Russia. I would also argue that they would never be financially independent from the West - they are and remain under the IMF....and that's only initially. Their economy is being destroyed and they will end up a basket case.