Ukraine is Re-integrating its economy with the “Aggressor” nation – Part II

Dear Readers:

Today finishing my review of this piece  by Olga Samofalova, and also bringing in this related piece by Dmitry Zubarev.

Yesterday we talked about Ukrainian trade with the European Union, or lack thereof.  Western Europeans are a canny people who fiercely protect their own domestic industries, ranging from small to big, products.  The only Ukrainian products which can sneak past their big tariffs are niche-agricultural items such as grain, honey, and certain meats.

Agriculture is important, but in the modern world, one cannot be considered a serious nation if one doesn’t have one’s own heavy-machine building industries.  In Soviet times the Ukraine became a serious player in arenas such as heavy-machinery, the petro-chemical industry, and even aerospace.  But in 25 years of so-called “Independence”, Ukrainian oligarchs and politicians (who are actually the same people) stole or frittered away, most of that valuable legacy.  Which could have formed the viable infrastructure for a serious nation.  Instead of a nation ruled by Zieg Heil-ing circus clowns.  Four years of Banderite ludicrosity accelerated the process of decline and turned Ukraine from an actual economic/political player on the European stage, into a sad parody of a Biblical parable.  As in, what happens to a person (or nation) when they throw away good things that were left to them as a dowry, to pursue an impossible dream based on sheer anger and hatred.  And when they entrust their valuable dowry to thieves and madmen.  Anybody who is a true Ukrainian patriot and wishes to fix their country, needs to have a plan based on the regeneration of agriculture combined with the restoration of heavy industry and aerospace technology.  But none of that is possible without a serious social revolution, in my humble opinion.  Only other realistic option being a Grand Reunification with the dreaded Moscovites.

Returning to the real world, which is crueler than Khmelnitsky’s pogroms and harsher even than the stern universe of the Old Testament:

Increased Trade With Russia

As a ray of hope, we mentioned yesterday that Ukraine still finds a willing consumer in the “aggressor nation” of its few remaining heavy-machinery products.  As ever before, Ukraine continues to peddle to Russia its pipes, furnaces, casings, transformers, motors, etc.  Not to mention tractors.  Economic consultant Kirill Yakovenko notes that Russian demand for such Ukrainian products is actually increasing:  “In the course of the past year the hryvna [Ukrainian unit of currency] fell while the [Russian] ruble strengthened, and this gave Ukrainian competitors a price edge.  Regardless of the so-called Euro-Integration, technological processes, as before, connect Ukrainian industry with Russian industry.”

Kirill Yakovenko owns a consulting firm called “Alors Broker!”

What do Ukrainians buy back from Russia, in return?  Same as before:  Raw Energy.  Notwithstanding Ukrainian boasts about becoming “energy independent” from Russia.  The so-called “energy independence” is really just about gas.  And while it is true that Naftogaz (the Ukrainian gas monopoly) refused, for political reasons, to buy gas directly from Gazprom (the Russian gas monopoly), and that gas exports from Russia to Ukraine thereby fell almost by a third — gas is not the only game in town.  We’re also talking about oil.  And Ukraine continues to buy Russian oil at the previous rate.

And then there is also coal, you see.  Back in 2016 Ukraine purchased $635 million dollars worth of coal from Russia, and $501 million in oil.  By comparison, the numbers for 2017 went up, to $800 million and $600 million, respectively.  Yakovenko:  “If we were talking about any other country, we could explain this positive dynamic by the change in oil prices on the international market.  But this being the Ukraine, most of the dynamic can be laid to the coal imports.  The actual volumes of (imported) product remained pretty much the same, the only difference being the rise in prices.”

Yakovenko explains the paradoxical importance of coal as a by-product of that very same Ukrainian civil war that pitted West against East.  Prior to the conflict, Ukraine supplied itself with coal from the Donbass region.  After Donetsk and Lugansk broke away to form Separatist republics, Old King Coal lost his coal.  “Curses, I lost my coal!”  Now the Ukraine is forced to buy anthracite coal from the United States and South Africa; and also, at a much cheaper price, from the very nation it is at war with:  Russia.

The Little Rocket That Couldn’t

Now we switch to Zubarev’s story, which takes takes in the city of Baikonur, Kazakhstan.

The Baikonur Cosmodrome

According to wiki, “Baikonur” is a Kazakh word meaning “fertile land with many herbs”.  It is also the home town of the Baikonur Cosmodrome, the world’s first and largest port into outer space.  The wiki entry explains why this particular region of bare steppe was picked to play such an important role:

The site was selected by a commission led by Gen. Vasily Voznyuk, influenced by Sergey Korolyov, the Chief Designer of the R-7 ICBM, and soon the man behind the Soviet space program. It had to be surrounded by plains, as the radio control system of the rocket required (at the time) receiving uninterrupted signals from ground stations hundreds of kilometres away. Additionally, the missile trajectory had to be away from populated areas. Also, it is an advantage to place a space launch site closer to the equator, as the surface of the Earth has higher rotational speed there. Taking these constraints into consideration, the commission chose Tyuratam, a village in the heart of the Kazakh Steppe. The expense of constructing the launch facilities and the several hundred kilometres of new road and train lines made the Cosmodrome one of the most costly infrastructure projects the Soviets undertook.   A supporting town was built around the facility to provide housing, schools and infrastructure for workers. It was raised to city status in 1966 and named Leninsk.

After the host republic became an independent nation, the Russian Federation made a deal with Kazakhstan; Russia still continue to lease and administer the space-port.  The lease continues until the year 2050, with Russia paying a fixed annual rent of $115 million (American) dollars per year.  And so, the Cosmodrome continues to launch missions into space.  With each rocket launched, Westie states watch with glued eyes and baited breath, maliciously hoping the rocket crashes.  Sometimes it does, but usually not, because Russian space technology is still the best in the world.

With that backstory in place, the actual story is fairly short, and almost more like a punchline.  A launch was planned for this year, 2018, from the Baikonur Cosmodrome, of a Ukrainian telecommunications satellite called by the lovely name “Swan” (Lebed) pushing off from a Ukrainian “Zenith-3SLBF” rocket.  But the launch will not take place after all, according to a source at the Cosmodrome.  Why not?  Because the rocket does not exist.

In 2013 then-President of the Ukraine, Viktor Yanukovych [who was driven out of office by the Maidan Revolution and barely escaped a baying mob] had signed a 5-year plan with ambitious goals to return Ukraine’s status as a space power.  $323 million dollars were budgeted for the space program, including Ukraine’s first telecommunications satellite, the “Libid” or “Swan”.  To my eyes, the “Swan” looks more like R2-D2 mated with a fly, had a baby, and then cut its legs off.  But that’s just me.  And who cares what the damned thing looks like, so long as it works?  Okay, we got it working… Now we just need to get that thing into outer space….

A Swan in the shape of a wounded fly?

So, the Zenith rockets are produced at the Ukrainian “Southern Machine-Building Factory” (на Южном машиностроительном заводе).  There is a division sized to build 6 rockets.  To build just one Zenith requires 10 months.  It also requires parts, 70% of which are imported from Russia.  See, boys and girls, Russian factories produce most of the components of the rockets, and then ship these components to Ukraine, which pieces them together, like Lego blocks, into the Zenith rocket!  Problem: The Russian supplier factories don’t trust Ukrainians to pay them (on time, or ever), and so they demand pre-payment before shipping anything to Ukrainian companies.  And the Ukrainians have not, apparently, paid their bill.

Again, according to Zubarev’s confidential source at the Cosmodrome:  “Even if the Ukrainians were to pony up the necessary financing right at this moment, there is still not enough time to build and launch the rocket in the current year.”

Once again, hammering in the point that Ukrainian economic revival (and survival) is highly dependent on her trade with Russia.  I could finish this piece with some kind of Aesopian moral, but I think I will just leave it at that.  And, to buck everyone up, with the encouraging words of Space Pioneer Buzz Lightyear:  “To Infinity And Beyond!”

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