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Why should UK taxpayers foot the bill for Ukrainian oligarchs’ military adventures?

Bryan MacDonald is a Russia-based Irish journalist and media commentator who focuses on Russia and its hinterlands and international geo-politics.

Published time: August 18, 2014 12:34
Ukrainian servicemen guard a checkpoint near the eastern Ukrainian town of Debaltseve, August 16, 2014. (Reuters / Valentyn Ogirenko)

​Back in 2003, with the illegal Iraq war looming and protests filling the streets of London in opposition, Vanity Fair’s David Margolick came to Downing Street to interview Tony Blair.

When the writer broached the topic of religion – to US politicians what bees are to honey – the former PM’s spin doctor Alastair Campbell interjected sharply: “We don’t do God.” Of course, privately, Blair held a deep Catholic faith and never obscured it but there was a feeling among his advisors that in an increasingly secular Britain, spirituality was bad for business.

“He that oppresseth the poor to increase his riches, and he that giveth to the rich, shall surely come to want.”
King James Bible, Proverbs 22:16

The current occupant of the office, David Cameron, has no such qualms. This year he claimed he was “doing God’s work" when he earlier launched the government’s “Big Society” initiative aimed at increasing volunteering and civic responsibility. In a country where over 1 million people rely on charity food banks to eat and one in six children live in poverty, we can only wonder what God thinks of Mr Cameron’s work.

This week the PM, who is valued at a comparably modest £4 million, pledged £1 billion from UK taxpayers to the President of Ukraine, Petro Poroshenko – worth the considerably higher figure of $1.3 billion. Cameron is considered an aristocrat in Britain but his Ukrainian counterpart is known as an oligarch. Poroshenko has amassed this fortune in a country with an average monthly salary which is 1/15th that of the UK.

However, the Ukrainian president is a mere pauper by comparison with the countries’ richest man, Rinat Akhmetov, who has somehow got his hands on $17.8 billion (according to Korrespondent.net, a leading Ukrainian news portal) in the last two decades, or roughly 10 percent of the war-torn state’s entire GDP. Akhmetov, who didn’t make his cash running corner shops, is well known to the UK elite as the owner of the penthouse at 1, Hyde Park, in central London, paying a record £136 million for the privilege and another £60 million to decorate it.

The UK’s richest man, Irish-born Gerald Grosvenor, is no match for Akhmetov, but somehow makes do with a pot worth $11.4 billion. Grosvenor, also known as the 6th Duke of Westminster, certainly could not be described as nouveau riche – his fortune dates back to the 19th century and was largely created by his ancestor Hugh, the first Duke. Other, genuinely entrepreneurial Brits like Richard Branson ($4.6 billion) and James Dyson ($4.4 billion) are in the ha'penny place set side-by-side with the Donbass mogul.

Britain's Duke of Westminster Gerald Cavendish Grosvenor (AFP Photo / Toby Melville)

The two Ukrainian oligarchs are not unique in their country, there are plenty of other billionaires knocking around Kiev and, in 2008, it was estimated that the top 50 controlled 85 percent of the nation’s GDP. Indeed, Forbes names nine Ukrainians on its tally of the world’s richest people. Ireland, with a total GDP that is 16 percent higher than Ukraine’s, and with only 10 percent of the population, has a mere 3 native born sons on the list – which gives you some idea of the gap between the elite and the rest in Ukraine. In Europe, we often talk about the ‘one percent’ but in Kiev, it’s more about the 0.000001 percent.

Ironically, should Poroshenko emerge victorious in his current military campaign against rebels in the Lugansk and Donetsk regions, the biggest economic winner would be Akhmetov, as most of his business interests are situated in that area. Surely, this fantastically wealthy man could contribute the money the regime needs instead of Joe and Josephine Soap in the UK? After all, he has invested well over £1 billion in his Shakhtar Donetsk soccer project, but maybe he subscribes to Liverpool manager Bill Shankly's view: "Some people think football is a matter of life and death. I assure you, it's much more serious than that."

Last Spring, the Commons Defence Committee warned that due to government cutbacks there will be “considerable doubt” about whether Britain will be able to defend itself in future. Amid cuts that will reduce the size of the British army to its smallest in centuries, Cameron has somehow found £1 billion to fund a war effort in a country that most of the UK’s citizens know little about, nor would care much about if they did.

Given the corruption that pervades in Ukraine, it’s highly likely that a lot of the money will find its way back to London's fancy restaurants and luxury good's stores rather than the war’s front-lines but that is beside the point.

Plainly, the UK state, which due to lack of money now has an infant mortality rate above the EU average, cannot afford this largesse and Ukraine’s top 10 oligarchs – which include its president – can. Throwing, say, $100 million each into a fund to assist the war effort in the east might mean buying a smaller yacht or moving to the less fashionable side of Hyde Park, but it would be a key step in showing that they are willing to change their ways in the “new” Ukraine. It would also be considerably more honorable than depriving British people of much-needed cash for crumbling public services.

However, what if they have no intention of altering their behavior and they have instead hijacked the spirit of “Maidan” to simply replace one oligarchic clique with another? This seems increasingly to be the case with each passing day, as a glance at current political maneuverings shows.

The Maidan protests began as a show of people power, a large section of the populace tired of the gut-wrenching corruption and the grind of life in Ukraine, which has the lowest worker's incomes in Europe. Later, egged on by US and EU hawks, it was commandeered by paid protesters and far-right activists before the billionaires took control of its momentum. The latest Kiev soap opera concerns President Poroshenko’s weakening grip on power as his Sergeant Bilko act in the east proves less effective than he’d initially hoped.

Step forward Ihor Kolomoisky, who fancies himself as the new Poroshenko (who was the new Tymoshenko, who was the new… repeat ad infinitum). Proud patriot Kolomoisky, a citizen of no less than three countries – Cyprus, Israel and Ukraine – has adroitly used his emergency appointment as governor of Dnepropetrovsk to position himself as a staunch advocate of Ukrainian nationalism.

Igor Kolomoisky (Reuters / Valentyn Ogirenko)

He is also significantly richer than the incumbent, with $6.5 billion on hand, according to Korrespondent. Unlike most of his peers, Kolomoisky has also, Bond-villain style, dipped into his humungous pockets to assist the military campaign with his own private militia – numbering between 2,000 and 20,000 men, depending on who you believe.

Aside from bankrolling the Dnieper Battalion, he’s also offered a $10,000 reward for each rebel captured by them and is hoping to found a political movement using his private soldiers as “activists.” Meanwhile, Akhmetov is reportedly scrambling around in an attempt to launch a rebranded version of ousted President Viktor Yanukovich’s Party of Regions – which has its power base in the currently disconnected east.

An oligarch who has been quiet recently is Viktor Pinchuk. In 2010, Pinchuk spent more than $6 million on his 50th birthday in Courchevel, France. Pinchuk, the son-in-law of former President Leonid Kuchma, is the founder of the Yalta European Strategy, which last autumn hosted former CIA director David Petraeus, Israeli President Shimon Peres, ex-US President Bill Clinton and probable presidential candidate Hilary Clinton, plus the aforementioned Mr Blair. Originally a supporter of Yanukovich, it appears that Pinchuk ($3.1 billion) is the oligarch with the most significant international connections, and has skillfully reoriented himself as a respectable face of Kiev “business,” despite spending the annual net wage of over 2,000 average Ukrainian workers on a birthday bash.

The question is, with all this cash swirling around Kiev, why do the Ukrainian oligarchs need £1 billion from embattled British taxpayers to fund their military adventures? With the NHS in turmoil, the armed forces being decimated and a sizeable minority in the UK unable to afford basic necessities like food, surely Cameron could find better uses for such a large dollop of dough? Or maybe he thinks that by presenting it to Ukraine, he is doing “God's work”?

P.S. Russia also has problems with inequality and a culture of oligarchy. This arose in the ’90s after the economic shock therapy forced on it following the collapse of the USSR. Despite the work of President Putin’s administration to correct some of the wrongs of that period, inequality and a concentration of wealth remains a problem in Russia. However, Russia cannot be compared to Ukraine due to its size, greater total wealth (over 15 times more) and rather better distribution of it across society, albeit very far from perfect. Nevertheless, this disparity remains an issue Russia must address and its lawmakers must do more to tackle it. Many western countries also have growing problems with inequality and the United States is foremost in this regard. I hope to address both Russia and the US in future columns.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.