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Black Horse, Black Earth, and BlackRock

Global market liberalization and the war machine are happy bedfellows, as usual.

BlackRock logo seen sprayed with a "coal sludge" like
(Photo by Erik McGregor/LightRocket via Getty Images)

Foreign entanglements, both political and economic, invite deeper and more extensive entanglements. That is not a very original insight, to be sure, but one to be borne in mind as the think tanks and the public flirt with the idea of more direct military involvement in the Ukraine–Russia war or the South Pacific on the one hand and agitate for expanded foreign trade relations on the other. When a nation depends on another for an economic good—semiconductors, say—it takes on its partner’s problems. Less obviously, when a nation’s citizens and business interests invest abroad, it takes on the target countries’ problems.

A spate of perfervid headlines in May 2021 warned of a dire near future—“World has just 10 weeks’ worth of wheat left after Ukraine war” was a typical instance. The concern: The war would interfere with the harvest and shipping of Ukraine’s cereal crops, which compose double-digit shares of world produce and 40 percent of the wheat supply for the World Food Program. Ten weeks passed and the black horse and its scale-bearing rider failed to appear; in fact, Ukraine had a healthy harvest, and grain shipments from the Black Sea have continued uninterrupted since July’s agreement between the belligerents to protect shipping.


The phony food crisis—quickly forgotten after the phony nuclear crisis and the phony missile crisis—did, however, invite scrutiny of the particulars of Ukraine’s agricultural sector. “Chernozem,” or “black earth,” a soil that is so fertile that there is a black market for it, covers 34 million hectares of Ukraine, making it one of the most agriculturally productive countries on earth. In 2001, the Ukrainian government passed a moratorium on land sales, expanding the restrictions of the original post-Soviet 1993 land regulatory regime. This moratorium forbade most transfers of land ownership, forcing agribusinesses to work through long-term leases with the government and private land holders. 

Land Matrix, a non-partisan database tracking the transfer of land ownership and use rights, reported in 2020 that an estimated 15 percent of arable Ukrainian land is owned or leased by foreign—that is, non-Ukrainian—entities. Four out of five of the largest landholders in Ukraine are holding companies registered in Western Europe or Cyprus, while the fifth, NCH Capital, is a large American private equity investor. A number of these holding companies are ultimately controlled by Ukrainian nationals, but the very device of using non-Ukrainian tax shelters emphasizes the enterprises’ indifference to Ukraine’s national interests.

An International Monetary Fund development loan of $15–20 billion was predicated on reforms that included lifting the land sale moratorium and the creation of an open land market—changes that would increase individuals’ economic freedom but also enable the mass consolidation of land sought by agribusinesses. Western-leaning Ukrainian politicians attempted to repeal the moratorium but failed in the face of popular opposition. (A 2019 reform bill also included a clause forbidding the purchase of Ukrainian land by Russian nationals and businesses, lest the bill’s pro-Western orientation be left as subtext.) Opinion polling in the two years preceding the referendum found that less than 20 percent of the population supported the land reform.

In March 2021, the permission of land sales by and to Ukrainians finally passed, in part because Covid restrictions prevented mass protests against the measure. That land reform law also provided for a national referendum to be held at an unspecified future date on whether foreign entities should be allowed to purchase Ukrainian land.

“Without the support of international organizations we will have to fall into the abyss of a financial meltdown,” prime minister Denys Shmyhal said at the time. Ultimately, Ukraine secured an $8 billion loan from the IMF.


The usual suspects cheered deregulation. The Atlantic Council published, among others, a piece by Roman Leshchenko, Ukraine’s agriculture minister, boosting the law and the potential passage of the referendum opening up farmland to foreign purchase. Arup Banerji, the director of the World Bank’s Eastern Europe region, praised the creation of the market but argued that the Ukrainian state needed to cultivate the capital structures to allow the full exploitation of the new financial resource.

“It is exceptional by the fact that this privatization of land, the creation of a land market, at this scale—I’ve never seen that anywhere,” commented Frederic Mousseau, an agricultural economist and the policy director of the left-leaning Oakland Institute, which is releasing a report on Ukrainian land ownership next month. Mousseau points to the fact that Ukraine is already in possession of robust agricultural infrastructure in addition to exceptionally productive land as the impetus behind Western profit-making interests’ push for land reform.

Ukrainian land reform and Western interest in it must be placed in the context of broader global interest in the country. To take an example, BlackRock, a longtime holder of Ukrainian sovereign debt, is preparing to put more money into—and take more money out of—the country. In November 2022, the Ukrainian Ministry of the Economy and BlackRock signed a memorandum of understanding stating that the investment titan would play an advisory role in Ukraine’s post-war economic reconstruction. BlackRock is unlikely to be the only player in high finance with a stake in post-war Ukraine; President Volodymyr Zelensky addressed the World Economic Forum’s Davos summit by video link Wednesday to drum up support for the reconstruction effort.

The Ukrainian Ministry of Agriculture issued a memo in November of last year emphasizing that continued land reform will be an important component of “Building Back Better” in the wake of the Ukraine–Russia war.

As we stated at the outset, foreign entanglement feeds itself; the creation of open, global markets provides the justification for more involvement, deeper enmeshment in otherwise inconsequential theaters. “Openness” provides new fields for rivalry with unfriendly peers, and Ukraine’s land market promises to be no different. In 2013, the Chinese Xinjiang People’s Construction Corps—a now-sanctioned subsidiary of the Chinese government accused of human rights abuses against ethnic minorities in western China—made a bid to lease 3 million hectares of Ukrainian farmland, a deal breathlessly reported in headlines like “China Just Bought Five Percent of Ukraine.” 

Sure enough, Elisabeth Braw, an American Enterprise Institute scholar, published an essay in June 2022 about using the XPCC deal to link American involvement in Ukraine to an aggressive stance against China. The fact that Braw has her facts wrong—she referred to the deal as a purchase rather than a long-term lease, and, more importantly, the deal was denied by the XPCC’s putative Ukrainian partner and does not appear to have gone forward—does not diminish the fact that the possibility of American rivals “winning” in market competition with Western interests can and will be used by the internationalist faction as an invitation for further involvement in the places that host these markets. 

In 111 B.C., a group of Roman businessmen backed the losing cause in a civil war in the unruly North African client kingdom of Numidia. They were massacred by the party of the victorious king, Jugurtha. Public outcry followed, and Rome declared war. Economic involvement is the forerunner to and pretext for imperial meddling. Only after three years of American-style war—a revolving door of generals, pointless maneuvers in the desert, a senatorial inquiry—was Jugurtha brought to heel. Wall Street’s wars have always been with us. 

When the American government and the foreign policy establishment throw their weight behind Ukraine, they are backing the usual suspects—a rogues’ gallery of global cronies seeking economic opportunities in a promising market. Global capital has good reason for high hopes in Ukraine; just as the Yanukovych government was a Moscow puppet, Zelensky, even before the war, had shown himself a willing partner of the Davos class. The cause of avoiding endless and ever-deepening foreign adventures requires more than cool heads in the State Department and the Pentagon; it demands policies that curb the Wall Street war clique’s capacity to participate profitably in markets where the American people must inevitably come to its defense.


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