America’s president, Donald Trump, likes to imagine he is quite the statesman. He has played the shuttle diplomat in his dealings with North Korea. In Britain he was granted an audience with the Queen. He has welcomed both the French president Emmanuel Macron and the German chancellor Angela Merkel to Washington. And perhaps most notably of all he held a summit with his Russian counterpart, Vladimir Putin, in Helsinki.
One of the key points of discussion – at least with European leaders – has been the ongoing conflict between Russia and Ukraine, which has rumbled on for four years. Putin suggested holding a referendum in the disputed Ukrainian regions as a way to settle the territorial question – Trump declined to support the idea.
Discussions with the leaders of France, Germany and the UK have examined a range of measures the western nations believe could end the ongoing war in the Donbass. Sadly, I doubt these efforts will produce results of real consequence – not because the European governments aren’t trying hard, but due to the fact that western policymakers fail to understand the logic that lies behind both Russia’s and Ukraine’s actions. To them, the conflict seems irrational as well as destructive: to those involved in the battle, it is eminently coherent.
Ever since fighting began in 2014 – and especially since the involvement of Russian soldiers became more obvious in August of that year – most politicians and commentators in the west have approached the dispute in a simplistic way, convinced that the conflict harms both of the nations involved, and that it should therefore be in the interests of both sides for the fighting to be brought to an end. Western scholars have depicted it as a unique lose-lose game, where no one will or can win (see, for instance, Samuel Charup and Timothy Colton’s book Everyone Loses: The Ukraine Crisis and the Ruinous Contest for Post-Soviet Eurasia). Most have assumed or hoped that the elites in both countries will eventually realise this fact. But both politicians and commentators have based their conclusions on a set of erroneous assumptions.
In the early 2000s World Bank analysts coined the term “state capture”, which they applied to the most backward states of post-Soviet central Asia. They argued that in many cases either small groups of businessmen or several “oligarchs” had “shaped the rules of the game to their advantage through illicit, non-transparent provision of private gains to public officials”, including by engineering changes to electoral systems and by recourse to sometimes dubious court decisions. In such circumstances, a state became an instrument which, having been captured by, acts on behalf of, the oligarchs, who corrupt the country’s political leaders.
I tend to agree with this definition, but I think one should also go further. While notions of state capture can certainly be seen in Russia and Ukraine in the 1990s, since that time a lot has changed. No longer can it reasonably be concluded that there are oligarchs who are directing either of these countries. Rather, many of the top politicians themselves became the richest people in Russia and Ukraine, and some of them seem to act almost exclusively for their own personal benefit. As such, these neighbouring states – both powerful and resource rich in their distinct ways – have been captured not by apolitical oligarchs but increasingly by the political insiders, the bureaucrats and apparatchiks. This dramatically changes their very nature.
In Russia these days, laws are frequently introduced or modified to fit the interests of a small group of influential people.
One example is the draft legislation known widely as the “Rotenberg Law”, by which the state would compensate citizens who fell foul of “unjust decisions” by foreign courts. Which appeared mainly designed to help Arkady Rotenberg, a former judo partner of Putin, whose valuable property had been confiscated by the Italian government because of sanctions linked to the Russia-Ukraine conflict. In the event, the legislation was not passed, but it is an interesting case study nonetheless.
Meanwhile, bureaucrats have regularly struck deals with companies owned by their relatives, content in the knowledge that this doesn’t contradict the existing statute book. By some estimates, proceeds from corruption accounted for $200bn (£155bn) in 2012, which was worth 8 per cent of Russia’s GDP; President Medvedev said in 2011 that a trillion roubles, or around 9 per cent of the federal budget, had been “misused” annually. It is easy to understand how huge the desire for perpetuating such a regime should be among those who benefit from it most.
In Ukraine, the same kind of regime was consolidated later, but by 2010 the process was largely complete. President Yanukovych, a close friend of the Kremlin, managed the country more or less as a personal business, ensuring that money from every region and from every industry ended up in his pockets and in those of his closest allies. Under Yanukovych, Ukraine indeed raced ahead of Russia in one sense, with the proceeds of corruption reaching 14 per cent of its GDP (as demonstrated by Laurence Cockcroft in his Global Corruption. Money, Power, and Ethics in the Modern World).
Even after the so-called Revolution of Dignity, which brought down Yanukovych’s government, some things soon returned to “normal”. Some of the reformists who promised to bring change were lost from the government, while the long talked about International Anti-Corruption Court still hasn’t been established even though both the US and European leaders press hard. Some have argued that the failure to get the court up and running reflects the reluctance of powerful people within Ukraine to become accountable, even if it means Ukraine losing access to international finance. Even though recent moves suggest the court may yet become reality, few would be surprised by further delays.
And so we come to the major point: that the war in eastern Ukraine, which harms two huge countries and which devastates the interests of ordinary people caught up in the conflict, looks absolutely rational for the political elites on both sides. The Kremlin uses the confrontation to galvanise the subject it governs, provoking citizens to flock around the president simply because no one changes their great leader at a time of war. The conflict with Ukraine also creates a broader clash with the west, furthering this agenda.
In Kiev, militaristic rhetoric is used by some to argue that economic reforms and the fight against corruption should not take top priority until the nation’s very existence is no longer at risk.
These states then, completely privatised by enormously powerful politicians, do not behave with the logic of established, uncorrupted democracies. For both Russia and Ukraine, the war in the Donbass appears to be the most natural means not only to perpetuate the rule of wealthy, strongman leaders but also to create dozens of new means of enriching political plutocrats and associated hangers-on. War, after all, is an expensive business.
It is, on the face of it, a good instinct for the world’s most developed nations to seek to help countries that are ailing, whatever the precise nature of their hardships. However, when it comes to Ukraine – and in theory at least to Russia – western leaders really should first determine whether state power is being held in trust by true and genuine representatives of the people; or whether, in fact, power has been captured by others for their own gain.
This is important not only because giving aid to countries where corruption is rife ends up benefiting only the corrupt. It is important too because, in cases where state power and wealth has been “captured”, it is impossible to expect political elites to act in ways that would be considered rational elsewhere – for instance in taking courses of action which might enable society to progress towards true democracy. That can be true even if a few individuals in dominant positions are “clean”: where bad apples predominate, rot is inevitable.
In 2015, the famous Minsk agreements – brokered by France and Germany – led to a ceasefire that has been frequently ignored. Even now the conflict between Ukrainian and Russian-backed forces simmers on, with seemingly little appetite to move the peace process forward. Yet I would argue that those agreements were fundamentally flawed in any case – struck, as they were, in an attempt to pacify two states which are in search of benefits not for their people, but primarily for their ruling classes.
The captured states of the 21st century are not only economically ineffective – they are run by people who believe wars are acceptable and beneficial. Indeed, for elites, they are win-win games; and will continue to be so even while decent western policymakers spend month after month, year after year, looking for ways to promote peace.
Vladislav Inozemtsev is director of the Centre for Post-Industrial Studies in Moscow
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