by Ivan Lizan

translated by Aleksey

source: http://www.odnako.org/blogs/kak-ukrainskie-oligarhi-prozhili-god-bez-gosudarstva-i-kakoe-ih-zhdyot-budushchee/

Since the victory of the “revolution of dignity” a year has passed which allows us to draw an interim debit / credit of oligarchic activities in Ukraine and understand, who out of the most active participants in the Maidan coup has been the winner, who has been the loser, and what the future holds for the Ukrainian oligarchs.

It was smooth on paper, but they forgot about the ravines.

The primary purpose of the first, “velvet” Maidan, organized by Sergei Lyovochkin, the apogee of which was the beating of the “онижедетей” pro-European protesters on November 30, 2013, – changed the model of relations between the oligarchic clans of the Ukrainian republic.

The Donetsk clan, headed by Yanukovych and Akhmetov opposed the Dnepropetrovsk clan, whose symbol was Yulia Tymoshenko, and the richest representative being, Igor Kolomoisky. The key claim from the clan of “Dnepropetrovsk” to the “Donetsk” were insatiable appetites for riches of the family of Viktor Fedorovich Yanukovych and their refusal to sign the euro-association agreements that would fit into some oligarchs designs to fit into the trade commodity chains on a grassroots level. (The fight over wealth interests)

The Moscow agreements which were initiated by Mykola Azarov, allowed not only the satisfaction of appetites of Ukrainian oligarchs, but also the beginning of a process of a gradual reversal of Ukraine in the direction of the customs union headed by Russia . However, in January 2014 at the Maidan events it became clear that in the case of larger geopolitics, the Ukrainian oligarchs were not orchestrators of a larger game, but chess pieces of medium value, who were moved and operated by the United States.

Because by February the oligarchs almost completely lost control over the activities of the revolutionary masses, and the only one who in retrospect benefited was Igor Kolomoisky. The others were among those who had already lost much more than they received.

The revolution eats not only its children, but also the parents.

It’s hard to say whether the Ukrainian oligarchs counted through the different combinations and results of their revolutionary activities in Ukraine or not. The probably attempted to, but could not calculate all the results fully. According to the results of the past year it can be stated with confidence: the winner, at least in terms of aggregate capital gained has not been a single one. Not one single oligarch became richer..

The oligarch whose riches took the biggest hit was the prince of Donbass Rinat Akhmetov, who has lost almost half of all capital and lost his feudal fiefdoms. The only thing that keeps Akhmetov afloat is a solid reserve of strength and energetic DETEK empire, which is a tasty morsel for competition, but can not be taken away due to its strategic importance and the complexity of the management. An important fact is that the structure DETEK includes both thermal power plants, a key element in the Ukrainian energy system, and power production and transportation of coal. Another key fact is that the taking of such an asset from Akhmetov can lead to unpredictable risks to Kiev elite.

However, the war on the Eastern Front and the struggle with Igor Kolomoisky utterly damaged Akhmetov, and with these events the wealth losing oligarch is risking celebrating the New Year completely broke, the steel plants of Rinat Akhmetov are still standing in Donetsk People’s Republic, and almost all the other assets in the Donbas are in contention between Ukraine and the Donetsk People’s Republic.

One of the organizers of the “velvet” Maidan, Dmitry Firtash, is now located in Austria, where the local government is deciding whether to extradite Ukrainian oligarch to the United States. Since Firtash was the chief chemist of Ukraine and specialized in the manufacture of fertilizers, he got what was coming. Problems with gas supplies, falling hryvnia and contraction of the domestic market led to a decline in demand for fertilizers and closure of his plants. Gorlovskiy “Styrene”, for example, was on the territory of the Donetsk People’s Republic and was most likely badly damaged by the shelling of the city. Firtash’s arrest showed the fragile position of this Ukrainian oligarch, who has even been deprived of the plant “Tajik Nitrogen” back in far away Tajikistan, not to mention his assets in the Ukraine.

Viktor Pinchuk also got what was coming, his pipe company went bankrupt, and the insurance business died soon after.

Vadim Novinsky is virtually bankrupt, and lost profits in shipbuilding amounted to about $ 4 billion and this is the estimated value of the contract in the construction of LNG for “Gazprom” at Nikolaev shipyard. Also suffered was his bank “Forum”, and a February investigation into “Smart group” could lead to deprivation of more of the oligarch’s assets.

Sergei Taruta became a real bankrupt (his own words for describing his financial situation). It is noteworthy the tycoon went bankrupt not because of digging trenches along the Russian border-Donbass, but due to the loss of assets that are now located in the Donetsk People’s Republic.

Konstantin Zhevago and Sergei Tigipko moved aside and decided not to take part in the feud, so they got hurt the least, but their capital also lost weight. Zhevago business is suffering because of falling prices for iron ore, and the bank of the tycoon, “Finance and Credit” is on the verge of bankruptcy. The businesses of Tigipko is predicted to crash land, and the actual oligarch faces financial ruin.

The government – that is “Private”. The oligarch – that’s me. Igor Kolomoisky

By year end, the only oligarch left standing in Ukraine was Igor Kolomoisky and his colleagues in the financial and industrial group “Privat”. Despite the reduction in the size of capital, “Private” has what the other oligarchs and their organizations do not have, and that is a lot of muscle.

Igor Kolomoisky and the two Gennadys who are close to him, Korban and Bogolyubov, by virtue of their last positions managed to hire mercenaries in time and form their battalions. The power shifts helped provide cover not only to protect their existing assets, but help them increase their sphere of influence to the area of Odessa, Zaporozhye and Kharkov regions, practically creating a state within a state, in which Igor Kolomoisky became leader. The parliamentary elections provided an opportunity to “Private” to cement its representation in parliament and repeatedly “bend” Kiev. Poroshenko and Yatsenyuk were forced not only to allocate billions to the refinancing of “Privat,” and turn a blind eye to the theft of some six hundred and three thousand tons of oil from the main oil pipeline, but also tolerate Kolomoiskiy as governor of the Dnipropetrovsk region, and his deputy, Igor Papitzu, in the seat of the head of the Odessa region. Removal of Papitzu and Kolomoiskiy without a declaration of war on the bank “Privat” is not possible, the guarantee of victory against such a powerful force is not there, so no one in Kiev can decide or take such a bold step.

In fact Kolomoysky, is the only oligarch in Ukraine who poses a real threat to Kiev rulers and is in turn a reserve force for Washington, whom which the United States could use after the bankrupting of the existing political projects.

Successful crisis-managers

In the meantime, the competitor of Kolomoiskiy is the president Peter Poroshenko, who despite a 9-fold increase in profits of his confectionery corporation “Roshen.” is in whole a loser. Not even arms trafficking is helping the oligarch-president via the plant “Lenin’s smithary”. On a side note it is true that there is growth in the bank Poroshenko “MIB”, which over the past year increased its capital by 85%, probably surpassing the financial performance due to the talented and hardworking former chief dentist Oleksandr Yanukovych.

We should also mention the extensive work of Arseniy Yatsenyuk, who has certainly increased his capital, as on the development of credit and the cost of money all the way to the arms trade. However, the ratings Arseny Petrovich did not score because of difficulties in proving the ownership of supplies and funds that were originally of the treasury of money and disbursed loans.

Survival in habitat destruction

The trouble all the Ukrainian oligarchs that they are no longer able to control the political processes in the country in which they earn their money. The maximum that the two Poroshenko and Kolomoysky can affect is the process of reallocation of budget funds and distribution of attractive assets. However, the oligarchs cannot affect the economy in ways that they could before.

The procedure of limiting Yanukovych and taking away his assets, which coincided with the launch of the script for the disintegration of Ukraine, led to the destruction of habitual Ukrainian bourgeoisie and oligarchy. If earlier issues of personal security were left to structures of the Ukrainian government and also the ones that supported law enforcement agencies which were funded by the state budget, once they fell apart the next path is the increase in spending on the defensive component of power by everyone.

The collapse of the economy and the uncontrolled collapse of the banking system will not only hit the mere mortals, but also affect such gods as the oligarchs. Once again, the reallocation of assets plundered from Ukraine can be done. But to keep the loot, to make it work, bringing profits in dollars, would be incredibly difficult.

Ever since the engineering and metallurgy fell into a tailspin, and a there is a hole in the budget that is of epic proportions, the ones who will be able to survive are these,

– Connection in relations with the state defense department in order to repair equipment for the army of Kiev;

– To fit into the scheme of arms procurement and development of Western aid, including financial;

– Be able to retain control of the business related to critical export / import for the currency or to control strategic sectors of the economy (since PPG “Private” can survive, which is the backbone of the monopoly on the production of ferroalloys and export of currency, and Rinat Akhmetov with his holding DETEK as a supplier of electricity).

The Ukrainian oligarchs are going to suffer with the fall of agricultural holdings: the cost of fertilizer, machinery and fuel significantly more expensive, and access to credit will be difficult. However, the oligarchs will transfer the costs to farmers and other market actors, and the sale of grain for the currency will stay afloat.

The bankers will get hit all the harder, the bankruptcy of “Delta Bank” and the catastrophic outflow of deposits, the inability to repay clients payments on loans will lead to the death of almost all the banks and the financial system of Ukraine. The last one to fall on the Ukrainian banking market, will be the “Privat” of Igor Kolomoisky.

The reduction of pillaging opportunities will sharpen the war between the oligarchs, and the country will disintegrate into separate a principalities, formally included in the one and indivisible Ukraine.

***

This year will be crucial for the Ukrainian oligarchy, the same ones that destroyed their habitat – Although the state had its curves and obliques, but it provided, now the oligarchs are forced to build their feudal principalities on the ruins of Ukraine, and forced to live independently. Ukraine’s experience shows that the loss of a sense of proportion in the privatization of profits and nationalization of losses leads to the destruction of the state and the ruin of those who parasitized its body. The readers are sure to be told again next year again of news of another splurging and talented managers who have fled abroad as a once successful entrepreneur.

The Ukrainian economic system which works on a set of assets belonging to different oligarchs, has exhausted itself and is on its last legs. Because in a year or two, a war of the same intensity or worse, will decay the rate in which Ukraine is functioning not only for the oligarchs, but for the people as working state institutions would collapse.

Consequently, everything will have to start from scratch nationalization and industrialization.