The government is using UK aid to further privatisation in war-torn Ukraine

UK elites are cynically trying to profit from the devastation of the proxy war in Ukraine. Using an infamous strategy popular with US imperialism in recent decades, the UK has been taking advantage of a poor country in dire straits by using aid to push for mass privatisation in Ukraine.

Aid as a key tool of modern imperialism and privatisation

As Declassified UK co-founder Matt Kennard previously told the Canary:

Aid actually developed as a way to repackage economic imperialism after decolonisation after World War 2. Many of the institutions which compose the ecosystem, from USAID to World Bank, are about greasing the entry of corporations into new markets, and subsiding the corporations at the same time.

Kennard and fellow journalist Claire Provost looked at this and other issues in their book Silent Coup: How Corporations Overthrew Democracy. Kennard also detailed the techniques that the US empire (and its British “junior partner”) use to ensure global subservience to elite interests in his book The Racket.

UK pushing privatisation in Ukraine via aid

On 20 November, fellow Declassified UK co-founder Mark Curtis wrote about how:

British aid is being used to open up Ukraine’s wrecked economy to foreign investors and enhance trade with the UK

He described how UK “economic aid” to Ukraine currently focuses on:

promoting pro-private sector reforms and on pressing the government to open up its economy to foreign investors.

And he added that:

Recently-published Foreign Office documents on its flagship aid project in Ukraine, which supports privatisation, note that the war provides “opportunities” for Ukraine delivering on “some hugely important reforms”.

Ukraine’s government hasn’t exactly put up much resistance, either. President Volodymyr Zelensky, for example, seems particularly receptive. Because he recently signed into law the further privatisation of public banks. And this, Curtis said:

follows the Ukrainian government’s announcement in July of its ‘Large-Scale Privatisation 2024’ programme that is intended to drive foreign investment into the country and raise money for Ukraine’s struggling national budget, not least to fight Russia.

The privatisation of “hundreds of smaller-scale enterprises”, meanwhile, has raised around £181m since 2022.

‘Turning a crisis into an opportunity’

Curtis also explained that:

Britain’s main economic aid project in Ukraine runs from 2022-25 and is called the Good Governance Fund. One of its aims is to ensure that “Ukraine adopts and implements economic reforms that create a more inclusive economy, enhancing trade opportunities with the UK”.

The recent Foreign Office update, meanwhile, talks of the devastation in Ukraine since 2022:

not only as a crisis, but also as an opportunity

In particular, the project seeks “better integration with Euro-Atlantic markets” and a closer alignment with “Western markets”. In a statement for Declassified, a Foreign Office spokesperson said the department would keep working to foster a “modernised economy” by the end of the war with Russia.

The UK isn’t working alone, either. Because it has its senior imperialist partner right by its side. In particular, the controversial USAID has funded the SOERA (State-owned enterprises reform activity in Ukraine) sub-programme. This is part of the Good Governance Fund project, and Britain’s Foreign Office works “as a junior partner”. USAID has actually been pushing for “mass privatization” in Ukraine since the 1990s. But SOERA’s aim now is to “advance privatization” of state-owned enterprises (SOEs). And it has already laid “the groundwork” by fostering legislative changes. SOERA also seeks to help the government with “strategic communications” to convince the public that privatisation is a good idea.

The Ukraine Recovery Conference, meanwhile, has sought to “to cement Ukrainian commitment to advancing the reform agenda”. And the UK’s Independent Commission for Aid Impact (ICAI) has said quite explicitly that:

The UK is hoping to reap benefits for UK firms from Ukraine’s reconstruction

The latest implementation of the Shock Doctrine: UK aid in Ukraine

Curtis places the UK’s push for privatisation within “a wider push by the World Bank and the International Monetary Fund (IMF)” to condition aid for lower-income nations on their commitment to privatising state assets. Indeed, one condition for a $15.6bn IMF loan to Ukraine last year was that it produced a “strategy on privatisation”. This has long been at the centre of the failed ideology of neoliberalism. It’s bad economics, but imperialists love it due to the benefits it provides for the rich and powerful minority. As Curtis reminds us, privatisation is not a magic fix because it “can create private monopolies, reduce accountability to government and overcharge the public”.

Pushing this catastrophic agenda during a crisis even has its own term, thanks to author Naomi Klein. She outlined the concept of the ‘shock doctrine‘ in her 2007 book, in which she detailed how right-wing elites (usually in cahoots with US imperialism) have long exploited people and countries’ “disorientation following a collective shock—wars, coups, terrorist attacks, market crashes, natural disasters—to push through radical pro-corporate measures”. As social movement activist Graham Jones told the Canary in 2018:

The shock relies on people not being able to understand what’s going on, and not having a narrative to fit it within.

Jones outlined how the left could resist these tactics so that it’s the majority of people, rather than a wealthy minority, that come out of devastating situations stronger. And it’s precisely that kind of strategy we need right now to oppose the disgusting imperialist attempts to benefit from conflict in Ukraine, Gaza, or further afield.

Featured image via the Canary