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New challenge: U.S. plans to save the economy of Ukraine to the detriment of Russia

Issued at 2017-07-04



At the end of June it became known that the United States intends to supply to Ukraine more than one million tons of coal, but two. In Kiev, this event has called a new victory over Russia, because the fuel supply breathe life into the real sector of the Ukrainian economy, simultaneously getting rid of dependence on Russian supplies. In the future this should help the Ukrainian steel industry to displace competitors from Russia from the world market. The head of “Centrenergo” Oleg Kuzmuk noted that American coal will cost “slightly more expensive”. Correspondents iReactor asked the political scientist David Liberman to tell whether coal injection is able to help Ukraine.

“Anthracite, high grade coal, is indeed extremely important for the Ukrainian sector of the real economy. And it is not in the heating and hot water. Without it is impossible to run most of the metallurgical enterprises, even if Kyiv will be able to restore them. And metallurgy is the only thing left in this country. For example, you can sell at least iron, which is later processed in the West. This, incidentally, is a strategic resource. Note that the US did not dare to impose sanctions on supplies of pig iron from Russia and our companies now dominate the market, pushing China to second place.

There is only one “but” – the product needs to be profitable and competitive. Our metal buying because it offers attractive rates. This is because the entire production cycle is closed in the same country. In Russia coal is mined, the mined iron ore processed raw materials immediately. And what happens with Ukraine? Delivery of coal from the United States would in any case be included in the price, therefore, it will affect the price of the final product. As a result, Ukrainian steel demand will be only within the country, and that, if Kiev will be able to block all the channels with Russia. But closed loop does not contribute to economic growth, so that the supply of coal from the United States to extend the death throes of Ukraine, but will not save from it.

As for fashion now diversifying, which is presented as a deliverance from addiction, it is another fiction. If Kiev stopped buying coal from Moscow, but prefer American products, depending on he kept, and just changed the host. As well and Europe with its liquefied gas from the USA. The country can be independent only if it produces all by herself. But in this system, the main thing is to have markets of their own products, or the ceiling of economic growth will be very low. The free market system is that each producer country should be several consumer countries. Coal supplies from the US will not transform Ukraine into a producer, they will only reinforce her status as a powerless consumer.”


Source: Micetimes Asia



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