Thu. May 26th, 2022

Overshadowed by rising geopolitical tensions, there was an alternative future for the Ukraine, heralded by cooperation with China. It was based on stability and development. It was viable, and it was denied.

As I have argued, the Ukrainian crisis was not warranted, but the ultimate outcome of the NATO (North Atlantic Treaty Organization) expansion, as American foreign policy leaders predicted in 1997 with great foresight (“Ukraine crisis, global fallout: Colossal failure of diplomacy,” TMT, February 28).

In effect, there was (and perhaps still is) an alternative future for the Ukraine. Instead of destabilization and regime change, it builds on stability and development. It is viable, but it was denied.

Ukrainians despair for peace. Russia needs security. China offers development. But Blackwater, US, NATO and Ukrainian paramilitaries seek something very different.

Undermining the Ukraine’s development with China

Even as tensions progressively escalated in the past half decade, trade ties between the Ukraine and China steadily increased since President Viktor Yanukovych’s state visit to Beijing in 2013. Four years later, the Ukraine, now under President Petro Poroshenko, joined China’s Belt and Road Initiative (BRI). And in 2019, China bypassed Russia as the Ukraine’s biggest single trading partner.

Together, China — the Ukraine’s new economic partner — and Russia — its historical trade partner — the two absorb a fourth of the Ukraine’s exports. That’s over six times more than the US.

In June 2020, Chinese Commerce Minister Wang Wentao and Ukrainian Minister of Infrastructure Oleksandr Kubrakov signed a deal to strengthen cooperation in multiple areas, particularly in infrastructure financing and construction. And last year, overall trade boomed to $19 billion, having soared 80 percent since 2013.

To the Ukraine’s President Volodymyr Zelenskyy, BRI meant an alternative future that would be more peaceful and stable, or as he said in his phone conversation with President Xi Jinping, the Ukraine might become a “bridge to Europe” for Chinese investments.

FIGURE 1: UKRAINE’S MAJOR TRADING PARTNERS, 2021

Source: The Observatory of Economic Complexity, March 1, 2022

In just a year, major Chinese companies started operations in construction, food and telecoms (Huawei). Intriguingly, Huawei — which the US has struggled to bury for a decade — began to develop mobile networks in the Ukraine, won the bid to install a 4G network in Kyiv’s subway, and was selected in 2020 to improve the Ukraine’s cyberdefense and security.

Indeed, new contracts signed by Chinese companies in the Ukrainian engineering market exceeded $2 billion for two consecutive years.

But this was not the future that was planned for the Ukraine in the West. Hence, the US penchant to ignore Russian pleas for security assurances and diplomacy, Zelenskyy’s reconciliation efforts with Russia derailed by the far right in 2019, the purposeful neglect of Austrian-style options for neutrality in the region and the fatal sanctions against Russia that will dent global economic recovery.

The White House has opted for very different scenarios and they were preceded by Blackwater’s dream for a new Iraq in the Ukraine.

Blackwater, Prince, $10-B mercenary plan

From 1991 to 2014, the US flooded the Ukraine with $4 billion in military assistance.

Over $2.7 billion has been added since then plus over a billion provided by the NATO Trust Fund, and all that is only a part of the NATO total. To Erik Prince, it was a great money-making opportunity, Iraq déjà vu.

As the founder of the private US military contractor, Blackwater (renamed Academy), Prince had long supplied mercenaries to the Central Intelligence Agency, Pentagon and State Department for covert operations, including torture and assassinations. In early 2020, Prince outlined a “road map” for the creation of a “vertically integrated aviation defense consortium” that could bring $10 billion in revenues and investment (see Figure 2).

FIGURE 2: Blackwater, Prince and the $10-billion military plan

Screen capture from Twitter (TIME, July 7, 2021)

However, Prince desperately needed the Motor Sich factory, which already had a deal with Beijing Skyrizon Aviation. The Chinese company had bought its 41-percent stake already in 2017. Chinese investors hoped to invest $250 million in one of the world’s largest advanced engine manufacturers for airplanes and helicopters.

Prince pushed his plan with tacit support from his family, a powerful Republican dynasty; and his sister Betsy DeVos, Trump’s secretary of education. Trump himself seems to have been sympathetic. However, the 2020 election undermined the plan. Moreover, Prince’s Ukrainian partners came under criminal investigation for alleged efforts to sway the 2020 presidential election and the investigation included President Joe Biden’s son and his stakes in the Ukraine.

Meanwhile, Washington blacklisted the Chinese firms involved, the Ukrainian court froze the holding for “national security” reasons, and Chinese companies and dealmakers were sanctioned.

Nonetheless, against all odds, Chinese development has prevailed in the Ukraine.

After Trump left the White House, the idea of a Ukrainian military-industrial complex remains attractive to the US and the Ukraine, where the state-controlled defense sector employs more than 1 million people and has moved toward military procurement since 2014.

In addition to military exports, the Ukraine seeks to invest more into domestic defensive and offensive capabilities.

Zelenskyy’s government saw the complex as “strategic,” and the government has pushed it since 2020. Over time, so the thinking goes, it could serve the needs of the Ukrainian state, its defense suppliers (and their oligarch owners) and the state’s foreign partners, particularly the US and NATO. As a platform, it could pave the way to the next regime change in the region — perhaps even in Russia.

The darker side of the story is that over time, one must choose between warfare and welfare. Since 2014, the geopolitics that has exploited the Ukraine’s weak institutions, coupled with extraordinary corruption, has increasingly penalized Ukrainian welfare.

After the Cold War, Ukrainian per capita incomes were not that different relative to Poland. Today, even before the current crisis, they have fallen some 60 percent behind those in Poland and are barely ahead of the war-torn Libya — another target of Western regime change.

What happens in the Ukraine will not stay in the Ukraine. As long as aggressive geopolitics is favored at the expense of proactive international diplomacy, comparable efforts to exploit client states, even at the expense of destabilization and breakup (e.g., Yugoslavia, the Ukraine) are likely to spread around the world.

Southeast Asia has great potential to be the next target.

This is a short version of a commentary that was published by China-US Focus on March 4, 2022.

READ: The Tragedy of Ukraine’s Abyss: Three Decades of Misguided Geopolitics                                                                                          https://www.chinausfocus.com/peace-security/the-tragedy-of-ukraines-abyss-three-decades-of-misguided-geopolitics

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Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at India, China and America Institute (US), Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see https://www.differencegroup.net/

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