Profit-making in Ukraine

Profit-making in Ukraine. By Thomas Fazi.

Last year, the Ukrainian government essentially outsourced the entire post-war “reconstruction” process to BlackRock, the world’s largest asset management firm. … In February, J.P. Morgan was brought on board as well.



The two banks will run the Ukraine Development Fund, which aims to raise private investment in projects potentially worth hundreds of billions of dollars across sectors including tech, natural resources, agriculture and health. BlackRock and J.P. Morgan are donating their services, but, as the Financial Times noted, “the work will give them an early look at possible investments in the country”.

The opportunities are significant, particularly in the agricultural sector: Ukraine is home to a quarter of the world’s chernozem (“black earth”), an extraordinarily fertile soil, and before the war it was world’s top producer of sunflower meal, oil and seed, and one of the biggest exporters of corn and wheat.


Thick, black, fertile soil

From certain perspectives, the war is clearly good for business: indeed, the greater the destruction, the greater the opportunities for reconstruction. At Davos this year, Larry Fink, CEO of BlackRock, said he hoped the initiative would turn the country into a “beacon of capitalism”. …

Over the years, across a series of similar events, Western governments and corporate leaders have made no secret of their enthusiasm to use the post-Maidan regime — and now the war — to radically alter Ukraine’s political economy. The agenda: to open up the country and make it safe for Western capital by transforming it into a special economic zone. … In short, the Washington Consensus on steroids. …

This programme has, arguably, been underway since the mid-Nineties, when the West used IMF loans-cum-conditionalities to impose on Ukraine, just as it did on Russia, a series of radical free-market-minded reforms that crippled the economy. As the Indian economist Prabhat Patnaik has pointed out, the IMF played a key role in precipitating the 2014 crisis: Ukraine’s then-President, Viktor Yanukovych, refused to accept IMF demands that he cut wages, slash social spending and end gas subsidies in order to integrate with the EU, and turned instead to Russia for an alternative economic agreement. This was the backdrop for the Western-backed Euromaidan protests and, eventually, the 2014 regime change.

After 2014, the West’s economic agenda was stepped up once again. Western multinationals had long had their eyes on Ukraine’s vast agricultural wealth, but a 2001 moratorium on the sale of land to foreigners had always represented an obstacle to unrestrained privatisation. As post-Maidan governments turned again to the IMF for financing, aid was conditioned on a series of land reforms that would finally allow foreign corporations to acquire vast tracts of the country’s farmland. … In 2020, Zelenskyy gave in to the IMF’s demands and finally repealed the moratorium. …


Ukrainian farmland

Even though the new law isn’t set to come into force until next year, US and Western European agrobusinesses have already bought up millions of hectares of Ukraine’s farmland — with 10 private companies reportedly controlling most of it.