Saturday, March 12, 2016

Ukraine: so, how is its hopey changy thingy working?

Ukraine has made it clear that it wanted nothing to do with Russia. Ukraine's President Poroshenko was proud to report that the Ukraine made it through the Winter without any Russian gas. How did they do it? By buying gas from Western Europe for a cost of 30% higher than the Russian gas. Donald Trump would call that deal stupid.

That's not all the dumb deals the govt of Ukraine has done. By severing ties with Russia the Ukrainian defense and aviation industry has lost 80% of its income. And by severing ties to Russian banking, the Ukraine is losing out on revenues that come from Ukrainian migrant workers sending money home. So, it is not surprising that living standards dropped in the Ukraine by one half. Inflation is 43%. Any more deals like these and the Ukraine risks becoming a failed state.

The economic blunders of dealing with Russia were accompanied by political blunders. Refusing to rent to Russia the base at Sebastopol prompted the Russians to annex the Crimea. And refusing the population of Eastern provinces to retain their Russian culture prompted a civil war and Russian covert support which virtually destroyed Ukrainian heavy industry. Talk is now ripe in the Ukraine (derision intended) to build an armed force to oppose Russia. The Ukraine needs a Trump.

No comments:

Post a Comment