wedel4_Dominika ZarzyckaSOPA ImagesLightRocket via Getty Images_ukraine ngo Dominika Zarzycka/SOPA Images/LightRocket via Getty Images
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When Civilizational Models Collide

Following the breakup of the Soviet Union, oligarchic capitalism flourished in both Russia and Ukraine. But their paths have diverged sharply since then, foreshadowing a civilizational conflict that will determine not only their fate, but that of democracies throughout the West.

WASHINGTON, DC – The war in Ukraine is a theater for two competing development paths: Russia’s oligarchic capitalism and Ukraine’s burgeoning civil society. Western countries should mark this distinction, because oligarchic capitalism has increasingly taken root within their own systems of economic and political governance. The Ukrainians, meanwhile, have offered an alternative: people working together democratically to fashion a better collective future.

Following the breakup of the Soviet Union, oligarchic capitalism flourished in Russia and Ukraine. In the 1990s, informal power networks took hold in both countries, and some of these “clans” (as local analysts called them) mobilized to control key sectors such as internal security, energy, or natural resources. The keepers of these assets – the oligarchs – then became millionaires, or even billionaires, almost overnight, owing to the era’s corrupt privatization schemes. The clans ran their own kleptocratic resource-extraction and offshoring operations and competed for control.

These webs of political-business-criminal relationships also ensnared Western leaders, helping to spread oligarchic capitalism globally. Consider former German Chancellor Gerhard Schröder, whose mutually beneficial relationship with Gazprom, the Kremlin-controlled natural-gas conglomerate, began before he even left office.

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