Ukraine: a ‘Marshall Plan’ or an oligarch bail out?

It was no surprise that the crisis in Ukraine came up at the Davos Philanthropic Roundtable. Tony Blair followed with a panel discussion about business for social benefit. This is what our work there was about, as one such business. Blair is indebted to host Viktor Pinchuk for a $500,000 donation to his faith foundation:

Calling on the Blair government for support in 2004, we’d said:

“While the vast majority of people in poverty suffer quietly and with little protest, it is not safe to assume that everyone will react the same way. When in defence of family and friends, it is completely predictable that it should be only a matter of time until uprisings become sufficient to imperil an entire nation or region of the world. People with nothing have nothing to lose. Poverty was therefore deemed not only a moral catastrophe but also a time bomb waiting to explode”

“Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity.”

The ‘Marshall Plan’ for Ukraine is an iimpact investment proposal to address some of Ukraine’s most intractable social problems. The investment was calculated at $1.5 billion over 5 years . |It was delivered to Ukraine’s goverment in October 2006, setting out a strategy for microeconomic development and social enterprise, with a particular emphasis on transitioning children from orphanages and on the streets into loving family homes, while helping to stimulate business and job creation such that fewer live in poverty:

“An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.

That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise.”

“This is a long-term permanently sustainable program, the basis for “people-centered” economic development. Core focus is always on people and their needs, with neediest people having first priority – as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine’s poorest and most desperate citizens, rather than a “top-down” approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of ple constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first — not secondarily, along the way or by the way. “

A ‘Marshall Plan’ strategy has more recently been called for by Ukraine’s interim Prime Minister and the leaders of civil rights organisation Maidan. It has also been called for by a group of international academics and most recently George Soros.
Earlier this week, the British Foreign and Commonwealth Office met one of the oligarchs closest to the deposed regime to discuss financial support to save Ukraine’s economy, estimated at $35 billion over 2 years.

As of yesterday it was discovered that $70 billion is missing from public funds with another £43 billion of aid gone without  trace.

If it comes to supporting one or the other through public funding , which would be your strategy of preference?

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