Paying the Piper

After living here for almost ten years, perhaps the thing that amazes me most is how the essentially same things keep happening without anyone ever trying to analyze why. Take, for example, the latest mess at the Enerhoatom state nuclear energy monopoly, unidentified members of whose management have brought it to de facto bankruptcy lining their pockets by means of shady deals (of course, if all this country’s de facto bankruptcies became de jure, there would be a massive spurt in unemployment, not least among the corps of formerly Red directors, and real business could start to bridge the gap between this country’s huge investment potential and miserable reality as a first step toward entry into the First World). This sort of has been going on at least since the BLASCO affair under former President Kravchuk when Ukraine’s merchant marine essentially disappeared and nobody knows precisely who got how much money for it. In fact, quite a few of those who have emerged as the captains of industry and politics in the former Soviet Union got where they are through precisely such exercises in accounting creativity and moral flexibility. This shared experience implies a common political culture quite different from the official talk about harmony and some kind of national idea everybody seems to be looking for but nobody can define. In private conversation, businessmen will sometimes mention the “peculiarities of doing business here,” specific features which outsiders, of course, do not understand, and which those who do understand them are not about to explain. If somebody is caught, it was simply bad luck or carelessness, and any prison sentence incurred as a result holds no stigma afterward.

What happened in Enerhoatom has happened elsewhere here countless times. It flows from the structure of the interests of those who control things without owning them. Their enrichment depends on what they can in one way or another squeeze out of “their” enterprise. They want investment, of course, as long as the investor is satisfied with what management thinks he deserves and, God forbid, refrains from trying to interfere in how what he thinks is a business he owns is run so that it might actually be motivated by profits and not management bonuses or transactions taking place off the books. They even find it difficult to understand why investors are not standing in line to “support” them, perhaps confusing the terms “investor” and “philanthropist.” But when all else fails, they will turn to that universal sugar daddy, the state, usually in the form of state guaranteed loans that everyone understands will not likely be paid. Now there is even a new project to set up a Ukrainian bank for reconstruction and development to support “innovation” by enterprises that could not manage to tap the international financial institutions that have supported projects that for the most part wind up unable to pay back the loans. And we all know who then has to pay the piper.