The State of Ukraine Was Annihilated. Economics of Collapse

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The State of Ukraine Was Annihilated. Economics of Collapse

Originally appeared at Politnavigator translated by Bob Roff exclusively for SouthFront; Edited by Viktor Stoilov

It is difficult to calmly analyze what supreme (not people’s) deputies (MPs) have done last night on Grushevskogo street. They enacted so many laws, that it will take us years to get used to. Tax code has changed, they adopted some anti-social laws, finally late at night a new budget with giant holes in it was adopted.

According to the law #3628, that Yatsenyuk himself initiated, there will now be a fee for services provided by cultural institutions, libraries and museums. By the way, the regional library is the only place which doesn’t and won’t engage in commerce, does not collect any fees. It is the last element of classical scientific and educational culture.

But that’s not all: parents will now have to pay for food in kindergartens. Feeding the underprivileged will be the responsibility of each region, most of which get subsidies from the national budget. Only 6 regions subsidize the budget.
According to the new budget, medical and educational spendings will be reduced, besides reduction of hospital beds, half of all the spendings on trade schools and colleges will now fall on municipalities.

To get the full picture, here is an example of Andrushevskii professional lyceum for orphans. The existence of this institution in the God-forgotten district of Zhitomir region is the only chance for these kids to not become drug addicts, alcoholics and bums. The municipalities are now responsible for feeding orphans in trade schools, high and middle schools. Same thing awaits every trade school in Ukraine. It is a heavy blow for the most vulnerable citizens.

Every school that has less than 25 students will be closed. These measures will make things to only get worse. Within 3 years the bus service will stop and within 5 years the village will disappear from the map.
The bonus of 30% from the minimum wage allowance, for children whose parents refuse or are unable to support them, was removed. Indexation of wages and pensions will only be possible if inflation exceeds 3%, monthly! By this time no amount of indexation will help. Before, the allowance of single parents could not be less than 30% from the minimum wage, now this limitation is removed.

Teachers, medics and artists, will get their seniority pension only after they turn 55.

The “allowance trap”, set by the enemy of the people Yatsenyuk, is now open. For the sake of the so-called “address allowance”, the bank secrecy was lifted on legislative level, meaning that if one has 500 to 800 dollars in his/her bank account, that person is no longer eligible to receive the allowance and is considered a “wealthy person”.

Banks are obliged to provide the Ministry of Finances with statements of ANY personal bank account if asked to do so.

The Military budget was raised to 4.5 billion dollars, most of which Ukraine expects to receive from the IMF in 2016. Same amount was recoeved in 2015.

Regardless of the fact that the DPR (Donetsk People’s Republic) paid 3.5 billion hryvnas to Ukraine’s budget, pensions will not be paid in Lugansk and Donetsk at all.

Budgets macroeconomics indicator makes no sense at all, and is based on insane beliefs. Economic growth – 2% (based on Yaresko’s reform, in just a few years, Ukraine will pay western companies interests from every percent of economic growth); dollar exchange rate – 24.4 (in 2015 it’s already 25); inflation – 12% (in 2015 it was 46%)

Refusal to pay the 3 billion dollars debt to Russia will result in a technical default, making the IMF the sole financial ruler of Ukraine. The budget was adopted under the influence of the U.S. Finance Ministry and the IMF, and was calculated by them. Let me remind you of their forecast for 2015: economic growth – 2% (in reality it declined by 12%); inflation – 7.5% (in reality it was 46%); salary increase – 14% (it actually dropped by 22%).

The (anti-popular) budget deficit is close to 80 billion hryvnas (3 billion dollars), meaning that without IMF’s money, pensions will not be paid. The pension fund gets only about a third of its funds, due to the reduction of income tax payments (one of the conditions of the IMF). It is planned to fill it (pension fund) up by this same reduction.

Due to the reduction of the income tax by half, it is believed that employers will no longer pay salaries “under the table”, which will increase the payment of other taxes. They seriously believe, that in times of economic down-fall, civil unrest, war, political persecutions, an increase of business taxes and general dissatisfaction with the government, employers will stop paying “under the table.”

When it comes down to small business (social basis of Euromaidan) – their taxes have risen, along with all kinds of fees, it becomes more and more difficulty to do business.

We have to understand that the “elites” that came to power, couldn’t care less about the Ukrainian people. This situation is a result of the loss of sovereignty.

So-called oppositionist Lyashko screamed on top of his lungs for a month (until last night) about the “villainous budget”, that he will not vote for, but finally voted for it with the smile on his face, getting his millions of people’s money.

These people in power are enemies of the state. The Rada (parliament) is an “organ” that causes death, it works against people’s interests. The only way to survive, is to form local committees and unions, based in hospitals,schools, kindergartens apartment buildings. The state, taken over by bourgeois elite, will rob people blind (the poorest will suffer the most), it will kill people in war, spreading war and pseudo-patriotic hysteria, feeding people with lies about fictional “aggressors”.

The current Ukrainian government is an exploitation tool. Avoid dealing with it at any cost if you value your life and the future of your children, not because Ukraine is bad, but because the CURRENT government is, the CURRENT system is. It was put in place by political prostitutes, selling themselves to foreign powers.

The only way out from this (situation) is to form various small social and territorial organisations, because the crisis will last for a long time!

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  • Doom Sternz

    But the rich are getting richer and nothing else matters. At some point we the people will realise we have to place limits on peoples wealth and in doing so limit the damage these people do to us. It is a class war and we the people are loosing, the rich are treating us literally as cannon fodder to die for their rampant greed.

    At some point we all have to access the world we want to live in? And then change it to meet our expectations. The rich are taking us to a catastrophe that will kill us all, things are not getting better they are getting worse.

    • JPH

      Naomi Klein’s “The Shock Doctrine” details implementing the “Washington Consensus” economic austerity in both Chile and Argentine under the military junta’s with the Chicago Boys proudly admitting that such economic policies would never be passed in a normal functioning democracy. And yes a massive transfer of wealth to both the local elite and international investors is the standard result or rather the objective.

  • VeeNarian (Yerevan)

    This hate-filled Neo Nazi riddled servile Maidanist regime will never build anything in Ukraine. It is, however, very expert at destroying homes, schools, factories and people. I bet they all love their new found “European values”. What a contrast to Ukrainian SSR!