As the front page story in this edition shows, the “View From The Top” is rosy for the privileged few.
Oligarch-controlled companies continue to dominate politics and business, exploiting – from our view near the bottom – access, power and influence for personal gain.
Heavily involved are select top executives who sit high above the rest of Ukraine’s population in skyscraper offices, contemplating how to score even more billion-dollar deals that make their owners wealthier as the national debt sharply increases and despair rises among many citizens.
Ukraine’s economy remains chronically sick today due to decades of sham privatizations that robbed state coffers, making government finances today dependent on billion-dollar bailouts from the International Monetary Fund.
At a huge cost for average citizens and state finances, Soviet-built factories were doled out in non-competitive tenders to insiders. The profits from these prized enterprises continue to make their way into offshore tax havens to this day.
Ancient history? Hardly.
Those deals still warp the nation’s development today by concentrating wealth in the hands of a few. Those in power appear intent on grabbing even more of the nation’s wealth soon.
Ukraine’s oligarchs hold enough political power with President Viktor Yanukovych that they could, at will, lift bureaucracy and corruption that chokes the masses.
But this oligarchy is content to have most people living on the edge. For them, it is safe for the middle class to be too small to influence the government as Ukraine’s export-oriented, resource-extraction economy remains stable only for them.
A new wave of scam privatizations appears to be in the works. Ukraine’s State Property Fund announced low starting prices for stakes in two electricity generators to be sold off in coming months.
DTEK, the energy holding of Ukraine’s richest man Rinat Akhmetov, has its eyes on the energy companies. With its coal mines snapped up in prior privatizations, DTEK is a perfect fit for tender conditions that require buyers to guarantee supplies of domestic coal for the generators.
Akhmetov, who celebrated his 45th birthday on Sept. 21 as the privatization tender rules were being announced, was likely satisfied. In contrast, poor Afghan War veterans and Chornobyl rescue workers nearly stormed into parliament in protest to plans to strip them of subsidies.
Indeed, the view from the top is drastically different from that on the bottom. If those at the top don’t control their greed and get a feel for the mood down under, they could have uninvited guests soon as well.
