"Ukraine's Destiny Is To Go Medieval"

Tyler Durden's picture

Authored by James H. Kunstler,

My country can cry all it likes about yesterday’s referendum vote in eastern Ukraine, but we set the process in motion by sponsoring the overthrow of an elected Kiev government that was tilting toward Russia and away from NATO overtures. The president elected in 2010, Viktor Yanukovych, might have been a grifter and a scoundrel, but so was his opponent, the billionaire gas oligarch Yulia Tymoshenko. The main lesson that US authorities have consistently failed to learn in more than a decade of central Asian misadventures: when you set events in motion in distant lands, events, not policy planners at the State Department, end up in the driver’s seat.

And so now they’ve had the referendum vote and the result is about 87 percent of the voters in eastern Ukraine would prefer to align politically with Russia rather than the failing Ukraine state governed out of Kiev. It’s easy to understand why. First, there’s the ethnic divide at the Dnieper River: majority Russian-speakers to the east. Second, the Kiev government, as per above, shows all the signs of a failing state — that is, a state that can’t manage any basic responsibilities starting with covering the costs of maintaining infrastructure and institutions. The Kiev government is broke. Of course, so are most other nations these days, but unlike, say, the USA or France, Ukraine doesn’t have an important enough currency or powerful enough central bank to play the kind of accounting games that allow bigger nations to pretend they’re solvent.

Kiev owes $3.5 billion to Russia for past-due gas bills and Moscow has asked Kiev to pre-pay for June deliveries. This is about the same thing that any local gas company in the USA would demand from a deadbeat customer. The International Monetary Fund has offered to advance a loan of $3 billion, of which Kiev claims it could afford to fork over $2.6 billion to Russia (presumably needing the rest to run the country, pay police salaries, et cetera). Ukraine is in a sad and desperate situation for sure, but is Russia just supposed to supply it with free gas indefinitely? As wonderful as life is in the USA, the last time I checked most of us are expected to pay our heating bills. How long, exactly, does the IMF propose to pay Ukraine’s monthly gas bill? In September, the question is liable to get more urgent — but by then the current situation could degenerate into civil war.

The USA and its NATO allies would apparently like to have Ukraine become a client state, but they’re not altogether willing to pay for it. This kind of raises the basic question: if Russia ultimately has to foot the bill for Ukraine, whose client state is it? And who is geographically next door to Ukraine? And whose national histories are intimately mingled?

I’m not persuaded that Russia and its president, Mr. Putin, are thrilled about the dissolution of Ukraine. Conceivably, they would have been satisfied with a politically stable, independent Ukraine and reliable long-term leases on the Black Sea ports. Russia is barely scraping by financially on an oil, gas, and mineral based economy that allows them to import the bulk of their manufactured goods. They don’t need the aggravation of a basket-case neighbor to support, but it has pretty much come to that. At least, it appears that Russia will support the Russian-speaking region east of the Dnieper.

My guess is that the Kiev-centered western Ukraine can’t support itself as a modern state, that is, with the high living standards of a techno-industrial culture. It just doesn’t have the fossil fuel juice. It’s at the mercies of others for that. In recent years, Ukraine has even maintained an independent space program (which is more than one can say of the USA). It will be looked back on with nostalgic amazement. Like other regions of the world, Ukraine’s destiny is to go medieval, to become a truly post-industrial agriculture-based society with a lower population and lower living standards. It is one the world’s leading grain-growing regions, a huge advantage for the kind of future the whole world faces — if it can avoid becoming a stomping ground in the elephant’s graveyard of collapsing industrial anachronisms.

Ukraine can pretend to be a ward of the West for only a little while longer. The juice and the money just isn’t there, though. Probably sooner than later, the IMF will stop paying its gas bills. Within the same time-frame, the IMF may have to turn its attention to the floundering states of western Europe. That floundering will worsen rapidly if those nations can’t get gas from Russia. You can bet that Europe will think twice before tagging along with America on anymore cockamamie sanctions. Meanwhile, the USA is passing up the chance to care for a more appropriate client state: itself. Why on earth should the USA be lending billions of dollars to Ukraine when we don’t have decent train service between New York City and Chicago?