IMF Sponsored “Democracy” in the UkraineBy PROFESSOR MICHEL CHOSSUDOVSKY

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IMF Sponsored “Democracy” in the UkraineBy PROFESSOR MICHEL CHOSSUDOVSKY

Opposition candidate Viktor Yushchenko in the Ukrainian presidential elections that took place in December, 2004, is firmly backed by the Washington Consensus.

He is not only supported by the IMF and the international financial community, he also has the endorsement of The National Endowment for Democracy (NED), the Carnegie Endowment for International Peace, Freedom House and George Soros’ Open Society Institute, which played behind the scenes role in 2003 in helping “topple Georgia’s President Sheverenadze by putting financial muscle and organizational metal behind his opponents.” (New Statesman, November 29, 2004)

The NED has for affiliate institutes: The International Republican Institute (IRI), the National Democratic Institute for International Affairs (BDI), the Center for International Private Enterprise (CIPE), and the American Center for International Labor Solidarity (ACILS). These organizations are said to be “uniquely qualified to provide technical assistance to aspiring democrats worldwide.” (See IRI http://www.iri.org/historu.asp)

In the Ukraine, the NED and its constituent organizations fund Yushchenko’s party NASHA UKRAINA (Our Ukraine), it also finances the Kiev Press Club. In turn, the Freedom House, together with the Independent Republican Institute (IRI) are involved in assessing the “fairness of elections and their results”. IRI has staff present in all Ukrainian Poll stations, watching
in 9 districts and local paid staff in all 28 regions of Ukraine.Yanukovich – Yushchenko

Besides all this, there are “professional outside election monitors from bodies such as the Organization for Security and Cooperation in Europe, but the Ukrainian Poll, like its predecessors, also featured thousands of local election monitors trained and paid by Western groups. They also organized exit polls. On that Sunday last month, those polls gave Mr. Yushchenko an 11% lead and set the agenda for much of what has followed since then.” http://globalresearch.ca/articles/TTA411A.html). 

Needless to say that these various Western foundations are committed to the “Freedom of the Press?” Their activities consist of not only organizing exit polls and feeding disinformation in the Western news chain, they are also involved in creation and funding of “pro-Western”, “pro-Reform” student groups, capable of organizing mass display of civil disobedience. In the Ukraine, the Pora Youth Movement (It’ Time) is funded by the Soros Open Society Institute, which is part of that process with more than 10,000 activists. It is supported also by the Freedom of Choice Coalition of Ukrainian NGOs, and Pora is modeled on Serbia’s Otpor and Georgia’s Kmara.

The Ukrainian “Freedom of Choice Coalition” was set up and is funded by the US and British Embassies in Kiev as well as by the German Embassy. Amongst the main “partners” (funding agencies) it lists USAID, the Canadian International Development Agency (CIDA), Freedom House, the World Bank and the Charles Stuart Mott Foundation.The National Endowment for Democracy

Among the numerous Western foundations, the National Endowment for Democracy (NED), although not officially part of the CIA, performs an intelligence function in shaping party politics in former Soviet Union, Eastern Europe and around the World.

NED was created in 1983, when the CIA was being accused of covertly bribing politicians and setting up phony civil society front organizations. According to Allen Weinstein, who was responsible for establishing the NED during the Reagan Administration: “A lot of what we do today was done covertly 25 years ago by the CIA” (Washington Post, Sept. 21, 1991).

In the former Soviet Union, including the Ukraine, the NED constitutes, so to speak, the CIA’s “civilian arm”. The CIA-NED was also behind the failed CIA coup against President Hugo Chavez of Venezuela and, in Haiti, it funded the opposition parties and NGOs in the US sponsored coup d’etat and the deportation of President Aristide in February of 2004.

In former Yugoslavia, the CIA channeled support to the Kosovo Liberation Army (KLA) since 1995, a paramilitary group involved in terrorist activities on the Yugoslav police and military. Meanwhile, the NED through the “Center for International Private Enterprise” (CIPE) was backing the DOS opposition coalition in Serbia and Montenegro. More specifically, NED was financing the G-17, an opposition group of economists responsible for formulating (in liaison with the IMF) the DOS coalition of “free market” reform platform in the 2000 presidential election, which led to the downfall of president Slobodan Milosevic.The Center for International Private Enterprise (CIPE)

The CIPE has a very similar mandate in the Ukraine, where it directly funds research on “free market reforms” in several key “independent think tanks” and policy research institutes. The Kiev Center for Policy Studies (ICPDS) is supported by CIPE. It has a similar function to that of the G-17 in Serbia and Montenegro: this is a group of local economists hired by the ICPS and with the support of the World Bank, to draw up a comprehensive plan of post-election macro-economic reforms.Who Is Viktor Yushchenko? An IMF Sponsored Candidate!

In 1993, Viktor Yushchenko was appointed head of the newly-formed National Bank of Ukraine. He was hailed as a “daring reformer” and he was among the main architects of the IMF’s deadly economic medicine, which served to impoverish Ukraine and destroyed its economy.

Following his appointment, Ukraine reached a historical agreement with the International Monetary Fund. Mr. Yushchenko played a key role in negotiating the 1994 agreement, as well as creating a new Ukrainian national currency, which resulted in the dramatic plunge of the currency.

Yushchenko as head of the Central Bank was responsible for deregulating the national currency under the October 1994 “shock treatment” as prescribed by the IMF. Because of this:

  • The price of bread increased overnight by 300%
  • Electricity prices rose by 600%
  • Public transportation rose by 900%
  • The standard of living tumbled drastically

According to the Ukrainian State Statistic Committee itself, as quoted by IMF, real wages in 1999 had fallen by more than 75% in relation to their 1991 level.

Ironically, this IMF sponsored program was intended to alleviate inflationary pressures: it consisted of imposing “dollarised” prices on an impoverished population, with earnings below Ten Dollars per month.

In November of 1995, the World Bank negotiators were sent to examine the overhaul of Ukraine’s agriculture, which was the breadbasket of Europe. With trade liberalization (which was part of the IMF prescribed economic package),US grain surpluses and “food aid” were dumped on the domestic market, contributing to destabilizing one of the world’s largest and most productive wheat economies (e.g. comparable to the American Mid-West).

By 1998, the deregulation of the grain market as prescribed by IMF had resulted in the decline in the production in Ukraine by over 45%, in relation to its 1986-90 level. The collapse of the livestock production, poultry and dairy products was even more dramatic. The cumulative decline in GDP, resulting from IMF reforms was in excess of 60% from 1992 to 1995.Propaganda in Support of the “Free Market”

Under these circumstances, why would Yushchenko, who was and is closely associated with the process of economic destruction and impoverishment, be so popular? Why was the public image and political reputation of this IMF protégé, namely Mr. Yushchenko remained unscathed?

This is what the neo-liberal agenda does to build a consensus in the “free market reforms”. “Short term pain for long term gain” is the motto of the World Bank. “Bitter economic medicine” is the only solution, much in the same way as the Spanish Inquisition of old, was the consensus underlying this feudal social order.

In an utterly twisted logic, poverty is presented as a precondition for building a prosperous society. This consensus presents a World of landless farmers, shuttered factories, jobless workers and gutted social programs as a means to achieving economic and social progress.

To sustain this consensus and convince the general public and its opinion, requires ” turning the World upside down”, creating divisions within society, distorting the truth through the use of daily mass media, ensuring through well-funded massive propaganda campaign, that no other viable political alternative to the “free market” exists or is allowed to emerge.

Then, why is Yushchenko so popular? For the same reason as George W, Bush, running on his record of war crimes, is popular.

And also, because his opponent, outgoing Prime Minister Yanukovich does not represent a genuine political alternative for the Ukraine, which forcefully challenges the international financial institutions and the interests of Western corporate capital, which is destroying and impoverishing an entire nation.

The 2004 lection in Ukraine was built on a massive, well financed propaganda and public relations campaign, supported by US and the above mentioned organizations, with money pay-offs by Washington for political parties and organizations that are committed to Western strategic and economic interests. In turn, US intelligence, working hand in glove with various foundations, including the NED, has consistently supported this process of civil society manipulation. The objective is not democracy at all, but rather the fracturing and colonization of the former Soviet Union.The IMF and “Good Governance”

In Ukraine he IMF not only intervened in the implementation of the macroeconomic agenda, it also intruded directly in the arena of domestic party politics. As was done in Russia in 1993, the Ukrainian parliament was seen as an obstacle to the implementation of the “free market reforms”. In 1999, under due pressure from Washington and the IMF, Yushchenko was appointed Prime Minister. President Kuchma agreed with the choice of 10 parliamentary groups in Ukraine.

In this, the weightiest argument may be the International Monetary’ Fund’s desire to see Yushchenko as Ukraine’s prime minister. Many Western experts say that IMF is ready to extend to Ukraine $300 million if Yushchenko becomes prime minister.

Following his appointment, Yushchenko immediately set in motion a major IMF sponsored bankruptcy program directed at the Ukrainian industry, He tried to undermine the bilateral trade in oil and gas between Russia and Ukraine on behalf of the IMF, which demanded that this trade be conducted only in US dollars, rather than in terms of commodity barter.Prime Minister Is Sacked

Yushchenko was accused by his opponents of having put the interests of IMF ahead of his country. In 2001, Yushchenko was sacked by the Ukrainian parliament as prime minister, following a non-confidence vote in the parliament.

The international financial community took immediate action. Ukraine again was put on the Creditors’ Blacklist.

IMF Managing Director, Horst Kohler was adamant: “Yushchenko has gained a lot of credibility outside of Ukraine, and I think he also deserves support inside of Ukraine” (quoted in the Financial Times, April 27, 2001.)

Thus, the IMF head did not mince his words. He added that: “Direction of reforms in Ukraine must be maintained.” He also said that the “Ukrainian parliament in voting on no-confidence is spending useless time, while the reforms need to be implemented.”Replicating Yugoslavia. The Partition of Ukraine?

A few months after his dismissal by the Ukrainian parliament in 2001, Yushchenko was in Washington for talks with senior members of the Bush administration. He was back in Washington in 2003 under the auspices of the International Republican Institute. During this visit, he met with Vice President Dick Cheney and Deputy Secretary of State Richard Armitage.

Thus the US neo-cons had carefully set the stage for the October-November 2004 presidential elections in Ukraine.

(Keep this in mind, Yushchenko at this time of official meetings with the US administration was no longer a member of Ukrainian government, having been voted out of office! A private citizen of Ukraine having official high-level policy meetings with US Administration!? Editor)

Yugoslavia was a dress rehearsal for the fracturing of the remnants of the former Soviet republics. As very recent developments suggest, the break up of the country, namely the partition of Ukraine, modeled on the experience of former Yugoslavia is, no doubt, one among several transition “scenarios” envisaged by the Bush administration.

Creating divisions between Ukrainians, Russians, Tatars in Crimea and other ethnic groups, also between Russian Orthodox church, Ukrainian Orthodox church and Ukrainian Catholics etc. is part of Washington’s hidden agenda.Military Alignments in Support of the Free Market

Militarisation supports the Free Market and vice versa. The CIA oversees the NED. The money donor community, including the Washington based Bretton Woods Institutions collaborate with the European Union, NATO and the US State Department.

War and Globalization go hand in hand. While Yushchenko is considered a protégé of the international financial community, his colleague and political crony, former Defense Minister of Ukraine Yevyen Marchuk is an unbending supporter of US and NATO military presence in the region.

It was largely on the initiative of Yevyen Marchuk as Defense Minister to send Ukrainian troops to Iraq, a decision which was opposed by the majority of the Ukrainian population.

Marchuk met with the US Defense Secretary Donald Rumsfeld at a Crimean resort in Yalta last year. On the agenda was: Ukraine’s participation in the Iraq war and the upcoming Ukraine’s elections. After this meeting Marchuk announced to the people of Ukraine that “Ukraine will continue to cooperate with the “coalition of the willing” and would continue to have its troops in Iraq.”

After that, Marchuk was sacked in September of 2004, barely a month before the first round of the presidential elections.Attempting a Coup d’Etat

On November 25th of 2004 Marchuk sent a message to the military, police and security forces, telling them to disobey the government’s authority of President Kuchma. He stated that he’s convinced that Yushchenko is entitled to be recognized as President of Ukraine. 

Marchuk, this former Minister told Russia that they should remember that Black Sea is Ukrainian territory and also that they will not guarantee what would happen to the Russian fleet in the port of Sevastopol. Of course, Marchuk was speaking on behalf of the powers behind Yushchenko.

These statements by Marchuk, essentially set the stage for as US-NATO sponsored Coup d’etat.Power Struggle: Oil and Pipeline Corridors

Behind the presidential elections, the run-off and now the third time round, is nothing more than the maintenance of the IMF sponsored macroeconomic agenda, strategic US-NATO military interests in the region are the price at stake.

The objective of the Bush administration is to install a Ukrainian government which will be firmly aligned with Washington, with the ultimate objective of displacing the Russian military and also Russian presence from the Black Sea. In this regard, Ukraine has already signed several military agreements with NATO.

GUUAM is a coalition of Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova, set up on instructions of IMF and NATO. These countries lie at the hub of the Caspian Sea oil and gas wealth. The object of GUUAM is to exclude Russia from the Black Sea, protect the Anglo-American pipeline routes out of Central Asia and the Caspian Sea and shut off Russia completely from the Caspian Sea, which is a rich oil basin, and also from the Black Sea.

On the 50th Anniversary of NATO the leaders of the above-mentioned countries were honored guests in Washington to sign this GUUAM document which bars Russia from any outlet on to the Seas and Oceans and the oil rich deposits that USSR spent billions and hard economic years to develop and build the infrastructure of these former third world countries.

Georgia, Azerbaijan and Uzbekistan immediately announced in Washington that they will leave the CIS (Commonwealth of Independent States) that was set up by Gorbachev-Yeltsin, after the dismemberment of the USSR.

The formation of GUUAM (under NATO’s umbrella and financed by Western military aid) was intent upon further fracturing the CIS. The Cold War, although officially over, had not yet reached the climax – the members of the new NATO political grouping were not only supporters of the 1999 bombing of Yugoslavia, they also agreed to “low level military cooperation with NATO,” while insisting that their “group was not a military alliance directed against any third party, namely Moscow”. This grouping is strictly dominated by the Anglo-American oil interests, and it is meant to exclude Russia from the oil and gas deposits in the Caspian area as well as isolating Moscow politically.COMMENT:

Can you imagine what would happen if the USSR at that time was mixing into American internal elections process and other subversive’ attempts, what would the US and the capitalist press be saying? The US forces would be marching in Moscow, Kiev and other capitals, that’s damn sure!

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