Kiev Snubs Common Sense as Ukraine Circles the Drain

Kiev's latest laundry list of sanctions and prohibitions sends a clear message: Ukraine will not bend to logic

Mon, May 22, 2017
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2,672Comments
Too much chocolate
Too much chocolate

In the Ukraine it would appear that there is a real fear of becoming an irrelevant itch on the world stage.

After all, there is North Korea, Global Fiat Currency Anxieties, USA Soap Opera Politics, EU Angst, Syria, Unusual VIX index activity, Reduced Budgets, Default Risks and frankly not much drama to justify any real attention much less further subsidies for Kiev.

Well, it then follows that “issues” must be created, or Kiev risks being nudged away from the feeding trough of international aid and attention. This week some of these issues caught my attention, if only to try to understand the byzantine logic of why a country would want to cut off its nose to spite its face. A few examples from this past week:

The TV channel Euronews had to cease broadcasting in the Ukrainian language and shut down for good on May 21. The last image they broadcasted was the Soviet era slogan “Slava Ukrainu” (Glory to the Ukraine!). This comes two years after they were banned from broadcasting in the Russian language, thereby losing a sizable percentage of viewers in the country. 

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Apparently since they began broadcasting in Ukraine six years ago, their documentation and the permits they were issued were insufficient as they only covered cable transmissions. That and the fact that they were broadcasting in a wide format over these years apparently inspired Kiev to suddenly calculate that Euronews now owes them 11 million Euros for the privilege. This was the last financial straw, Euronews could no longer justify doing business there. Strange assessment while embracing transparent (invisible?) European values. I thought this a bit odd.

On the agricultural front, the Economic Development and Trade Ministry of Ukraine imposed antidumping duties as of May 18 on imports of nitrogen fertilizers (urea and urea-ammonium nitrate) from Russia. Duties of 31.84% will apply to all urea and UAN producers from Russia.

It seems the reason is that importing Russian fertilizers to Ukraine damages local Ukrainian chemical fertilizer producers and is a threat to Ukraine's food security. One should bear in mind that Russia has been and is the main supplier (80-90%) of all affordable fertilizers to Ukraine. Now the task will be to find other suppliers for the farms of Ukraine at prices that the farms can afford, or demand fertilizer subsidies from Brussels - USA?

Kiev decided to impose an additional duty on chocolate and other products with cocoa content imported from Russia. According to the Ukrainian International Trade Commission, this had to be done because Russian companies allegedly lowball their prices for the Ukrainian market.

However, according to experts, the duties at the rate of 31.33% introduced by Ukraine are close to what the WTO calls a prohibitive (40%) rate and in reality is aimed at getting rid of competition in favor of the main producer of confectionery products in the country – ROSHEN Confectionary Corporation, owned and founded by President Petro Poroshenko. Might this duty have a subtle political overtone of self-interest?

On a different front is the soon-to-be introduced ban on software. This should prove interesting as one of the key accounting and bookkeeping programs used in Ukraine (as well as Russia) is “1C”. It would seem that the entire line of "1C Enterprise" software is in the process of being banned. The reasons given, aside from being Russian, is that at any moment those nasty Russian special services who elected Trump and no doubt Macron can block the work of most legally sold copies of 1C, creating a colossal risk for Ukrainian national security.

Meanwhile, how do Ukrainian businesses transition when the bedrock programming they have built their IT architecture upon is banned? Imagine if the government in your country decided to ban Microsoft’s line of products? The additional financial and operational burden on local Ukrainian business might become a little more difficult. Implementation thankfully will be problematic, and will probably fizzle if attempts to actually enforce it are made.

For those who follow religions, it seems that Kiev now expects Orthodox Christians to “fish or cut bait” by declaring which side of the political schism they will pray within. Russian Orthodox Patriarch Kirill has asked Pope Francis and other world religious leaders to try to act against a proposal to amend Ukrainian laws that will withdraw protection from religious bodies that are under the influence of an “aggressor state.”

As Ukraine does not accept the possibility that a civil war has been ongoing between citizens within its borders, it currently defines Russia as the aggressor state. The Kiev proposal in the words of the Patriarch would “threaten the constitutional rights of millions of Ukrainian believers,” who are affiliated with the Ukrainian Orthodox Church subject to the jurisdiction of the Patriarchate in Moscow (just like the Catholic Church in Rome). There are the usual political inducements and nationalist rant at play as well in this sad situation, but a person’s freedom of worship choice is not key among them.

On the internet, social media side there is the upcoming blockage and closure on June 1, 2017 of VKontakte and Yandex, used by millions of Ukrainians daily as key resources. My impression is that many of these decisions to create sanctions and impose restrictions are for theatrical effect, to show the Rada-ists in Kiev have a strong nationalistic will and will not bend to logic or common sense.

The question remains: a strong will directed at whom? The effects of these and similar actions are detrimental to Ukrainians themselves and further erode whatever faith might remain in the vision, pragmatism and abilities of their present political regime.

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