Ukraine’s Cronyism Crisis Offers a Warning to the ‘De-risking’ World

The economy in Ukraine is defined in wartime by the tremendous mobilization of resources for the war effort, with funding from mobilizing tax revenues at home and extensive flow of external assistance from allies. It is sometimes referred to as the Kenzah Military, where spending on defense and the military industrial complex supports the local economic demand, this model requires increasing importance to the state of the economy. For Ukraine, whose government was ever known as “liberal”, this is a major political change. This transformation comes at a time when Western countries also review their economic doctrines away from the “small state, the free market” of the neoliberal era. Since the markets that left their own devices will not meet political goals such as addressing inequality, climate change, industrial development, technological innovation, or providing results consistent with national security, it is not one of the countries that drive the war only to become enthusiastic.

While the return of this state to intervene has long been late, how to manage the relationship between the state and the capital is not clear and includes various threats to the wider public interest. These problems are particularly raised in particular for a country like Ukraine, which has long been suffering from the problem of public institutions that are captured by private interests.

The economy in Ukraine is defined in wartime by the tremendous mobilization of resources for the war effort, with funding from mobilizing tax revenues at home and extensive flow of external assistance from allies. It is sometimes referred to as the Kenzah Military, where spending on defense and the military industrial complex supports the local economic demand, this model requires increasing importance to the state of the economy. For Ukraine, whose government was ever known as “liberal”, this is a major political change. This transformation comes at a time when Western countries also review their economic doctrines away from the “small state, the free market” of the neoliberal era. Since the markets that left their own devices will not meet political goals such as addressing inequality, climate change, industrial development, technological innovation, or providing results consistent with national security, it is not one of the countries that drive the war only to become enthusiastic.

While the return of this state to intervene has long been late, how to manage the relationship between the state and the capital is not clear and includes various threats to the wider public interest. These problems are particularly raised in particular for a country like Ukraine, which has long been suffering from the problem of public institutions that are captured by private interests.

Now, in the face of a series of modern scandals, the Ukraine government offers a tremendous audit – and its current crisis provides a warning to the rest of the world.

Discussions in The UNRC’s annual recovery conference, which gathered in Rome in early July, tends to avoid political controversy as possible. The conference’s technocratic atmosphere maintains a crust that the liberal international system is still working. One term over all others came to control URC meetings: “Remove the seizure”. This indicates the use of government and multilateral resources to lure private capital in Ukraine. While in Ukraine the removal of the investment risk of war -related investment indicates, it has a much wider contemporary. Public discussions on filling in private capitalism for expensive infrastructure projects tend to involve the concept of getting rid of the disposal process. The capital and states roam the profit, insurance and risk guarantee lines, as the private sector usually leads a solid deal before registration. Investors are looking for guarantees before committing money-what is one financier on the URC committee, which is indicated as forms of “semi-sovereign investment security”-while governments and donors want to direct capital towards their favorite political goals.

When analyzing the results of these impulses on the participation of the burden of investment, Daniela Gabor is attracted by a link between the “Decreased State” and the “National Security State”. Previously, public funds cancel special profit through subsidies and guarantee; Finally, the state emphasizes more directional control over the capital, and directs it towards strategic priorities. It contradicts the law to reduce inflation in the Biden administration, and its loose and incentive structure (canceling the seizure), with the law of its chips (national security), noting that the latter involves more assertive interventions in organizing supply chains.

As for Ukraine, the importance of this general model lies in how different historical cases do the economic “catching” rapid “knees” as is the case in South Korea and Taiwan in the twentieth century, and countries use both constraints and incentives to the capital axis towards the results that have grown the base producing the economy. Industrial policy models collected these competitive ecosystems of public and private companies within a comprehensive political settlement that witnessed that the state is exercising the right to obtain its favorite results. At its best, there are signs that the military industrial complex in Ukraine mimics some of these methods. A good example of the Kyiv Brave1 platform for innovation for defense technology, which provides a competitive environmental system for producers with grant facilities and testing, a good example. However, the key to the success of such a framework is strong institutions capable of protecting the public interest.

Unfortunately, a series of modern scandals cast this question. The Ukrainian government has been charged with increasing tyranny, and has prevented the appointment of an anti -corruption investigator to lead the Economic Security Office, an agency accused of blackmailing private companies. She participated in the clear persecution of the prominent anti -corruption activist Vitalyin, which led to 100 Ukrainian and international non -governmental organizations, including the German Marshall Fund in the United States, to protest directly on the president. F-terribly-has effectively destroyed the independence of anti-corruption agencies in the country. In a sign of a problem with coming, the first mass protests erupted since the comprehensive invasion, in challenging martial law.

KYIV has now retreated in the face of this anger and its motives appear to have been increasingly scrutinized in governmental and market relations in the economy of Ukraine in wartime. For a scientist who is heading towards “getting rid of projection”, as economic growth becomes more challenging and increasing crises than the risk of investment, the Ukraine experience provides a warning: that the return of the state as a decisive economic representative creates opportunities for favoritism and rented capitalism. If it is not well designed, it can grow a private sector that lives outside the state government without little danger and not to be accountable. These problems arise in particular in Ukraine because of their history of elites competing for political power in order to obtain rents and revenues from other factions. The war seems to provide the motive for the exit of this circular logic, which enhances the independent organizational capacity of the state. But despite the strong military performance of Ukraine in the battlefield, this hopeful assumption began to seem optimistic.

Either privatization and nationalization programs – the political policies offered both, are at risk of scrutiny due to the risks that, in various ways, can use by special interests to control resources. More than 160 companies, about 8,000 organizations, and about 12,000 individuals have been subjected to a form of seizures or penalties. While this level of the state’s intervention, above all to address Russian intervention, is expected in a comprehensive war, the free press in Ukraine is increasingly monitoring what happens to these assets as soon as they are taken and whether these powers are appropriately used. The case of the union building in Central Kiev-which was issued as part of a conflict with the trade unions on the property belonging to the Soviet era-caused special anxiety.

The privatization of last year for the UMCC mining and chemical company (UMCC) shows the same amount of these problems. The company is the largest product of titanium in Europe, an important strategic resource used in defense production. As a state-owned institution, the company was accused of illegally trading with Russia across the third countries and shell companies-and there may be a form of participation from international investors useful for cleaning the company and enhancing accountability. However, UMCC was very cheaply sold at a single auction for the home to Cemin Ukraine, a subsidiary of The Contraction, Neqsol Holding, which is 100 % owned by businessman Azerbaijan, Nasib Hasanov. The group maintains a large center in the Azerbaijani economy, which is reflected in its position as one of the largest taxpayers. As Azerbaijan, despite recent tensions, it maintains close economic relations with Russia, has criticized the anti -corruption activists due to the clear risks that Ukrainian titanium ends simply in the Russian military industrial complex. While the government argues that in the event of such security risks, the company can withdraw again using wartime laws, this is hardly supporting its original decision and undermines the stability of the work environment necessary for the organized markets.

Ukraine scandals Now it is widely covered in the Western press, which is a strategic danger to its support. To recover its location, KYIV must re -focus its strategic novel on strengthening public institutions, and expressing what Gabor calls “National Security State” in the face of Russian aggression.

It is very important to say no, something, in fairness, sometimes Ukraine’s politicians have argued. Two years ago, Serhai Marsenko, Ukraine Minister of Finance, told URC delegates that he was “traditional, we were very welcome in any form of money. Now we are not. If you want to rebuild Ukraine, you must adhere to Ukraine’s priorities.” This common instinct, which requires a state that is seriously taken as its role as the guardian of the public and national interest, sits uncomfortable with the sale of UMCC.

Politics sometimes intrude on URC gatherings. In Rome, she fell to the representative of the Trump administration, special envoy Keith Kelog, to play this role. He used his speech to reproduce environmental and social standards and governance as a “global” conspiracy against “the rights and interests of the sovereign national states.” Kelogg mixed this sovereign framing with left -wing arguments, in the classic Mélange. For example, the American registry in Iraq and Afghanistan condemned the pretext that “companies and foreign entities used the exposure of these countries for profit.” The speech in Kyiv may have been interpreted as giving the green light to its retreat on anti -corruption efforts. There is no doubt that his criticism of America’s record of building a liberal state is undoubtedly serving the self and hypocrisy in granting President Donald Trump’s attempt to dismantle the liberal state of America actively at home. But this does not nullify the truth – however my part – from his attack on America’s record of the new conservative intervention. The liberal Ukraine allies did not provide any progressive version of this argument; A sign of how to waive this space to the radical right.

The crisis in Kyiv shows that liberals should be less naive in how they are linked to companies’ interests. Since Ukraine allies are developing new tools to support investment between the public and private sectors in its economy, you will need to design carefully to ensure subsidies and ensure difficult conditions to protect the public interest. Beyond Ukraine, with the return of the overlapping state in popularity, strengthening democratic institutions will be necessary if the world wants to avoid following the Trump administration in an era of patronage capitalism.