With Bakhmut scheduled to fall within the next few weeks, “inspiring altruists,” “visionary entrepreneurs,” “savvy business strategists,” or “budding philanthropists,” all of whom have been engaged since the war’s inception in a battle for access to what the New York Times describes as “the world’s largest construction site,” have already begun to express dismay over Ukraine’s progress in the war.
In early August 2022, for instance, the Washington Post published a story on Ukraine, describing it as a battle for Ukraine’s mineral and energy resources. In that article, Jacob Kierkegaard, a fellow at the Washington-based Peterson Institute for International Economic, warned how a stalemate would not only throttle but put a complete stop to speculation on Ukraine as a post-war source of enrichment for investors. “No one in their right mind, a private company, would invest in the rest of Ukraine, if this were to become a frozen conflict.”
As speculators on the war’s outcome continue to hedge their bets on Ukraine, the stakes could not be higher, especially for the highest bidders. Alongside this speculation, Ukrainian government officials are paying careful attention to omissions and admissions in their speeches, especially for Ukrainian holidays such as Ukraine’s Unity Day.
During Ukraine’s Unity Day, for instance, Volodymyr Zelensky delivered a speech. In his speech he made no mention of reconstruction, its bidders, or even their highest bidder. In his message, he emphasized, on the contrary, that Ukrainians are fighting for “Ukraine.” But he made no mention of Blackrock.
In an expansion of its close collaboration with the United States, Blackrock, the world’s largest asset manager, however, is already in contract with the head of the Ukrainian state.
As early as September, however, Zelensky agreed to consult with the company on the reconstruction of Ukraine, a prospect whose outcome depends entirely upon the future course of the war, and these consultations have already materialized into formal agreements, not single one of which figured into Zelensky’s speech on “Unity Day” for Ukrainians. The details of these agreements have not been released publicly.
Blackrock is famous in the United States for its interference in daily activity of the government. In a close collaboration, for instance, the US Treasury, the Federal Reserve and Blackrock, a multi billion dollar company, worked together in March 2020 to plan and execute Wall Street’s rescue operation.
According to an article published by the New York Times, Larry Fink, the CEO of Blackrock maintained regular contact with US Secretary Steven Mnuchin and Fed Chair Jerome Powell “in the days before and after many of the Fed’s emergency programs were announced in late March.”
The article detailed how “America’s top economic officials were in constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue,” showing, “how intertwined Blackrock has become with the federal government.”
The deeply intertwined relationship is now expanding with Blackrock reaching out to NATO Proxy-In-Chief, Volodymyr Zelensky, a comedian, whom Turkish news outlets have described as playing a joke on the world by continuing the war, or, as Dan Peña, a senile “motivational” speaker from a castle, calls a “millionaire,” to form a relationship for reconstructing Ukraine, “the world’s largest construction site.”
On December 28th, 2022, Zelensky announced the “coordination of efforts to rebuild Ukraine” with Blackrock on his presidential website, noting, “BlackRock manages client assets worth about 8 trillion dollars.”
In a revealing comment about the depth of the partnership and the length of collaboration, Zelensky writes, “the Blackrock team has been working several months on a project to advise the Ukrainian government on how to structure the country’s reconstruction funds.”
The announcement amounts an admission about the actual goals of the Ukraine war. Ukrainians are not merely fighting for NATO’s expansion into their own country but fighting to ensure that Blackrock maneuvers into a position where it can further exploit Ukrainian veterans, refugees or inhabitants for making profits off of its reconstruction.
It is no wonder that Ukraine’s president, a comedian, did not stop to make jokes about Blackrock during his speech on Ukraine’s Unity Day. It must not a laughing matter. The contracts with Blackrock, already extremely detailed, have materialized into a Memorandum of Understanding with Blackrock.
Even earlier, however, the New York Times published an article in September, 2022, detailing Zelensky’s first meeting with the Blackrock CEO. Shortly after the meeting in September, BlackRock reported in November that its Financial Markets Advisory (FMA) group and the Ministry of Economy of Ukraine signed a Memorandum of Understanding (MoU) that formalizes the discussions from September.
Aside from the MoU, the level of sophistication arising from postwar reconstruction plans for profit are extremely detailed. In a New York Times article published on February 17th, 2023, the authors note how “drones operated by Danish companies have mapped every bombed-out structure, with an eye toward using the data to help decide what reconstruction contracts should be issued.”
Since Ukraine’s economy is in a deep state of decline with the GDP expected to drop by more than 30 to 40 percent due to the war, it is openly acknowledged throughout financial circles that Ukraine’s economy is incapable of maintaining itself, let alone fighting, without enormous amounts of continuous Western aid. What is unmentioned, however, is that the money must be paid back somehow.
Estimates indicate that half of Ukrainians will live in poverty by the end of next year, and its budget deficit is running at $5 billion monthly.
In September the World Bank estimated that the current cost of reconstruction and recovery in Ukraine amounts to $349 billion, with the figure continuing to grow as the war continues. In November, Zelensky estimated that the total cost of rebuilding Ukraine would exceed $1 trillion.
Zelensky also announced on Ukraine’s Unity Day that Ukraine would participate in next year’s WEF summit in Switzerland from January 16th to 20th but didn’t specify if he would be attending in-person or virtually.
“I have spoken with the head of the world’s largest investment fund, BlackRock, and have been assured yet again that businesses from the developed world are ready to invest in our recovery,” the Ukrainian media quoted Zelensky as saying in a video address, Interfax reported. “Company specialists are already helping Ukraine structure the Recovery Fund.”
“We are preparing to partake in the World Economic Forum in Davos. The posture and prospects of Ukraine will be presented there,” he added.
It is clear that millionaire Zelensky’s decision is a clear nod in favor of the interests of the corporate and financial oligarchy, and that he intends to serve its needs and interests above those of Ukraine or the soldiers, whom he has lent to NATO as canon fodder for its proxy war.
With Blackrock’s close proximity to the Federal government and the Biden administration, there can be no doubt that the decision to fund Ukraine’s military effort in the war is driven, at least in part, if not altogether, by the desire to ensure Ukraine’s ability to deliver a return on investment after the war, especially for Blackrock.
After NATO allies provoked Russia’s further invasion into Ukraine, Blackrock’s CEO penned a letter to shareholders of Blackrock’s more than 8 trillion in assets, declaring the end of globalization.
“The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades,” Fink said in his 2022 letter to shareholders. “It has left many communities and people feeling isolated and looking inward. I believe this has exacerbated the polarization and extremist behavior we are seeing across society today.”
In response to nations and governments coming together and launching an “economic war” against Russia, Fink urged shareholders to suspend the purchase of any Russian securities in its active or index portfolios.
“Over the past few weeks, I’ve spoken to countless stakeholders, including our clients and employees, who are all looking to understand what could be done to prevent capital from being deployed to Russia,” Fink said.
At that time BlackRock funds had taken a $17 billion loss as a result of its Russian exposure after Putin’s invasion of Ukraine began in late February. It has to be recovered somehow.
“I remain a long-term believer in the benefits of globalization and the power of global capital markets. Access to global capital enables companies to fund growth, countries to increase economic development, and more people to experience financial well-being,” Fink said.
It is hard to understand what Fink means by “growth” in Ukraine when Ukrainian soldiers, who are reporting triple digit losses on a daily basis, appear to be fighting not for their country’s freedom but for Blackrock to rebuild it on their graves.
“Growth” could mean Panzerboom. The European press, Der Spiegel, recently announced a so-called Panzerboom after Olaf Scholz’s announcement to deliver Germany’s elite Leopard 2 tanks to Ukraine for a Spring offensive.
Rheinmetall and Krauss-Maffei Wegmann are among the “profiteers” the article highlighted as the primary beneficiaries of Scholz’s announcement.
A business opportunity valued at a billion dollars many times over, Scholz’s announcement heralds a new era for Germany’s defense, weapons, or military Rüstungsherstellers.
Apart from those directly invested in the war or its aftermath, energy companies continue to reap enormous profits from the continued death and destruction in Ukraine. Shell, the energy giant, recently reported its highest annual profits in the company’s 115 year history.
Energy prices soared at the outbreak of the war in Ukraine. Whereas London based Shell’s profits for 2022 were around $20 billion, Shell nearly doubled its profits for 2022, earning no less than $40 billion, flying in the face of Biden’s previous calls for energy companies to stop ‘war profiteering’ from the Ukraine war.
On Monday October 31st, 2022, Biden, for instance, claimed the oil industry “has not met its commitment to invest in America and support the American people,” because they’re not just making a “fair return” but “profits so high it is hard to believe.”
“If they don’t, they’re going to pay a higher tax on their excess profits, and face other restrictions,” he said. “It’s time for these companies to stop war profiteering.”
Despite these entirely pro forma denouncements, the attempt to bill legislation for “taxing” oil companies silently died long ago, despite both the European Union and the United Kingdom passing so-called “windfall” tax bills. The UK’s windfall tax bill taxes oil companies’ windfall profits at 25%.
In response to the “windfall” tax, Shell announced the company did not expect to pay any U.K. taxes for 2022, as Shell plans to offset investments and certain costs against its U.K. profits. So much for UK’s windfall tax bill anyway.
Shell’s nearly doubled profit of $40 billion indicates the degree to which strong financial interests are at play in the Ukraine war— not just in terms of its reconstruction with Blackrock, its escalations with Rheinmetall and Krauss-Maffei Wegmann, but with energy giants like Shell, to name just to name a few.
Not just in Ukraine but throughout the world the effect of the Ukraine war and the callous disregard its war profiteers display, is a major force of destabilization. And it is sending shockwaves throughout the world from one continent to the next, from Europe to Asia and from Europe to Africa.
In Pakistan, for instance, the classic problem of a balance of payments has given rise to an increase in inflation. Pakistan’s inflation is at 50%, the greatest rise in 50 years, since the beginning of the Ukraine war and that rise is setting the stage for the further impoverishment of more than 20 million Pakistanis over the next year.
The Ukraine war is exacerbating Egypt’s crisis. Egypt’s inflation is at 25% since the beginning of the Ukraine war. More than one third of Egypt’s population lives below the poverty level. With more than a third of the country’s tourists coming from Russia and Ukraine, Egypt, which is heavily dependent upon imports of food, is no longer able to make the billions of dollars in revenues from tourism it made before the Ukraine war.
While companies like Blackrock vie for control over the allocation of the more than 750 billion dollar allowed for Ukraine, “the world’s largest construction site,” the world over begins to feel the devastating effects of the Ukraine war. Ever weary of its outcome, no capital would be made available unless “Russian forces have been removed from the homelands of Ukraine.”