Translation of an article by the Spanish online publication Rebelion
Since the pro-European government came to power after the Maidan revolution in 2014, the World Bank, IMF and European Bank for Reconstruction and Development (EBRD) have laid the groundwork for large-scale privatization in Ukraine through large-scale structural reforms.
In 2014, Ukraine was forced to adopt a series of austerity measures in exchange for $17 billion in aid from the IMF and an additional $3.5 billion from the World Bank. These measures included the privatization of land, which would occur if the land moratorium were lifted and land ownership liberalized. By July 2022, public sector debt was $60 billion, and Ukrainian private companies owed $68 billion. Ukraine is now the third largest debtor to the IMF in the world after Argentina and Egypt.
Of the 41 million hectares, 33 million are arable, about 4.3 million hectares are devoted to industrial agriculture, and most of the roughly three million hectares are in the hands of a dozen large farms. Another five million hectares, according to the government – the size of two Crimea – have been “stolen” from the Ukrainian state by “private companies,” amounting to more than nine million hectares, or 28 percent of the country’s arable land, to which we can add another seven million in state hands, totaling almost 50 percent. The other half is used by more than eight million Ukrainian farmers.
Those who control Ukrainian land today are a group of Ukrainian oligarchs and various foreign companies, mostly American and European. With one exception: The 10 companies that control most of the land are registered abroad, mostly offshore, such as Cyprus or Luxembourg. And even though much of the Ukrainian land is still managed by a Ukrainian founding oligarch, many of them are controlled by Western banks and investment funds, which now own a large part of their shares, and thus are their owners.
Most of these companies owned by Ukrainian oligarchs have debts to Western financial institutions. Together, these institutions have been major lenders to Ukraine’s agricultural sector, with nearly $1.7 billion lent to just six of the largest agricultural companies in recent years. This international financing directly benefits oligarchs, many of whom have been accused of fraud and corruption, as well as foreign funds and related companies as shareholders or creditors.
In short, Ukrainian companies are not owners at all; most of their shares are in the hands of foreign investors.
On March 31, 2020, Ukraine passed a law legalizing the sale of agricultural land and lifting a 19-year moratorium on land transactions.
Major companies operate 4.4 million hectares of land, and when legal restrictions are lifted in 2024, corporations will be able to buy up to 10,000 hectares, large agricultural companies will be able to expand their access to land, and that process has already begun.
In 2022, Ukraine paid $4.3 billion in debt repayments despite the armed conflict. That same year, Ukraine paid $496 million to the World Bank and two billion dollars to the IMF. These debt payments put a heavy burden on an economy already weakened by military action and economic crisis, outstripping the country’s spending in key sectors. Forced privatization because of debts, the transfer of natural resources to foreign owners, and the loss of land due to conflict. Ukraine will soon become a paradise for investors already owning Ukrainian land, such as BlackRock and Vanguard Grup, for whom restructuring and running an agricultural business are the main conditions of debt.
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