IMF Sponsored "Democracy" in The Ukraine
by Michel Chossudovsky
www.globalresearch.ca 28 November 2004
The URL of this article is:
http://globalresearch.ca/articles/CHO411D.html --------------------------------------------------------------------------------
Opposition candidate Viktor Yushchenko in the Ukrainian presidential elections 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 a behind the scenes role last year in helping "topple Georgia's president Eduard Shevardnadze by putting financial muscle and organizational metal behind his opponents." (New Statesman, 29 November 2004).
The NED has four affiliate institutes: The International Republican Institute (IRI) , the National Democratic Institute for International Affairs (NDI), 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/history.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, 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 "poll watching" in 9 oblasts (districts), and local staff in all 25 oblasts:
"There are professional outside election monitors from bodies such as the Organisation 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 organised exit polls. On Sunday night those polls gave Mr Yushchenko an 11-point lead and set the agenda for much of what has followed." (Ian Traynor 26 November 2004, the Guardian,
http://globalresearch.ca/articles/TRA411A.html )
Needless to say these various foundations are committed to "Freedom of the Press". Their activities consist not only in organizing exit polls and feeding disinformation into the Western news chain, they are also involved in the creation and funding of "pro-Western", "pro-reform" student groups, capable of organizing mass displays of civil disobedience. (For details, see Traynor, op cit) In the Ukraine, the Pora Youth movement ("Its Time") funded by the Soros Open Society Institute is part of that process with more than 10,000 activists. Supported by the Freedom of Choice Coalition of Ukrainian NGOs , Pora is modeled on Serbia's Otpor and Georgia's Kmara.
The Freedom of Choice Coalition acts as an Umbrella organization. It is directly supported by the US and British embassies in Kiev as well as by Germany, through the Friedrich Ebert Stiftung (a foundation linked to the ruling Social Democrats). Among its main "partners" (funding agencies) it lists USAID, the Canadian International Development Agency (CIDA), Freedom House, The World Bank and the Charles Stewart Mott Foundation.
(Complete list at
http://coalition.org.ua/en/index.php?option=content&task=view&id=29&Itemid=51 )
In turn, Freedom of Choice Coalition directly funds and collects donations for Pora (See
http://pora.org.ua/en/content/view/83/95/ )
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 important intelligence function in shaping party politics in the 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". CIA-NED interventions are characterized by a consistent pattern. In Venezuela, the NED was also behind the failed CIA coup against President Hugo Chavez and in Haiti it funded the opposition parties and NGOs, in the US sponsored coup d'Etat and deportation of president Aristide in February 2004. (For details, see Michel Chossudovsky, 29 Feb 2004,
http://www.globalresearch.ca/articles/CHO402D.html )
In the former Yugoslavia, the CIA channeled support to the Kosovo Liberation Army (KLA) (since 1995), a paramilitary group involved in terrorist attacks 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's "free market" reform platform in the 2000 presidential election, which led to the downfall of Slobodan Milosevic.
Copy and Paste? The Center for International Private Enterprise (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 based International Center for Policy Studies (ICPS) is supported by CIPE. It has a similar function to that of the G-17 in Serbia and Montenegro: A group of local economists hired by ICPS was put in charge of drafting, with the support of the World Bank, a comprehensive blueprint of post-election macro-economic reform.
Who is Viktor Yushchenko? IMF Sponsored Candidate
In 1993, Viktor Yushchenko was appointed head of the newly-formed National Bank of Ukraine. Hailed as a "daring reformer", he was among the main architects of the IMF's deadly economic medicine which served to impoverish The Ukraine and destroy its economy.
Following his appointment, the Ukraine reached a historical agreement with the IMF. Mr Yushchenko played a key role in negotiating the 1994 agreement as well as creating a new Ukrainian national currency, which resulted in a dramatic plunge in real wages.
The 1994 IMF package was finalized behind closed doors at the Madrid 50 years anniversary Summit of the Bretton Woods institutions. It required the Ukrainian authorities to abandon State controls over the exchange rate leading to an impressive collapse of the currency.
Yushchenko as Head of the Central Bank was responsible for deregulating the national currency under the October 1994 "shock treatment":
The price of bread increased overnight by 300 percent,
electricity prices by 600 percent,
public transportation by 900 percent.
the standard of living tumbled
According to the Ukrainian State Statistics Committee, quoted by the IMF, real wages in 1998 had fallen by more than 75 percent in relation to their 1991 level.(
http://www.imf.org/external/pubs/ft/scr/2003/cr03174.pdf )
Ironically, the IMF sponsored program was intended to alleviate inflationary pressures: it consisted in imposing "dollarised" prices on an impoverished population with earnings below ten dollars a month.
Combined with the abrupt hikes in fuel and energy prices, the lifting of subsidies and the freeze on credit contributed to destroying industry (both public and private) and undermining Ukraine's breadbasket economy.
In November 1994, World Bank negotiators were sent in to examine the overhaul of Ukraine's agriculture. With trade liberalization (which was part of the 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 that of the American Mid West).
By 1998, the deregulation of the grain market had resulted in a decline in the production of grain by 45 percent in relation to its 1986-90 level. The collapse in livestock production, poultry and dairy products was even more dramatic.
(See
http://www.imf.org/external/pubs/ft/scr/2003/cr03174.pdf )
The cumulative decline in GDP resulting from the IMF sponsored reforms was in excess of 60 percent (from 1992 to 1995).
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