Institutions matter: Dissecting Ukraine-U.S. relations after the Taliban takeover in Afghanistan

In view of the events in Afghanistan, the White House must now think twice before boasting about some remarkable “success story”, which would prove to everyone that the democratization of second- and third-world countries has not lost its meaning and that the Kabul scenario will not be repeated in other countries. Ukraine differs fundamentally from Afghanistan both in the challenges it faces and in its political, social and demographic characteristics. The Taliban gained a swift victory because the state and governmental institutions were too weak to respond to the situation. Over the past years, the Afghan state has been totally delegitimized; the army and military infrastructure are inefficient; the military and police have not been paid for months, and corrupt officials have continued draining funds from the state. President Biden’s decision to withdraw American troops was the result of a pragmatic relationship of invested resources, military, image and political losses and results achieved in 20 years. The talks between Volodymyr Zelensky and Joe Biden at the end of August 2021 should usher in a new phase in Ukrainian-American relations, so there is an urgent need to restore and enhance Ukraine’s trust and negotiation skills. This would be an adequate and correct response and a logical conclusion to all the scandals that have accompanied Ukraine-US relations in the past; it would also show that Ukraine is ready to implement expected reforms, which are markers of a real “success story”.

During his visit to Kyiv in the spring of 2021, US Secretary of State Antony Blinken reiterated the importance of cooperation with the IMF and its decision to provide loans as a key indicator of successful reforms. The IMF does not provide funds to countries with dysfunctional institutions, and their main condition for the provision of funds is an independent and reputable Central Bank. That is why an independent National Bank of Ukraine is such an important element of cooperation with the United States. However, Washington has picked up some negative signals coming from Ukraine’s National Bank, in particular the dismantling of PrivatBank’s management takes us back to Ihor Kolomoisky, against whom the US authorities have filed several civil lawsuits. Any sign of the NBU’s institutional dependence immediately results in an IMF loan refusal. The issue of trust in the Ukrainian financial system remains the main indicator of investment development in Ukraine, and therefore, what is happening in the NBU is a crucial marker for the dynamics of real US-Ukraine relations. In addition, Ukraine must adopt a realistic budget this year, without inflated expenditures and with a realistic revenue forecast. After all, the budget is also an important factor for further cooperation and obtaining loans from the IMF. The arrival of the IMF mission in Kyiv is scheduled for autumn 2021, but all the preparations – required reforms, the NBU’s independence, a realistic budget - must be decided in advance. Consequently, Ukraine should properly adjust its foreign policy communication strategy. Statements by Deputy Prime Minister Oleksiy Reznikov regarding the possible deployment of American air defence forces in Ukraine, or repeated statements by high-ranking officials regarding Ukraine’s immediate accession to NATO are not coordinated with Washington. Instead of drawing closer to the Alliance, we get discommunication – incomprehension of Kyiv’s actions and questions regarding the validity of political statements. This creates an additional issue – unpredictable actions initiated by the Ukrainian state, which is problematic for the West. In addition, another major issue is the Presidential Office taking over a significant part of foreign policy functions, which undermines the Ministry of Foreign Affairs and somewhat destroys the separation of powers. Investigations of sanctioned persons: Andriy Derkach, Kostiantyn Kulyk, Oleksandr Dubinsky and others also remains a priority for Washington. For the United States, any sign of cooperation between the Ukrainian government and the oligarchs - especially those who are wanted by American law, Ihor Kolomoisky and Dmytro Firtash - can be interpreted as Kyiv’s inconsistency and ambiguity. Eliminating this ambiguity is definitely a necessary step, no matter how politically and media-wise painful it may be. The state system must follow the checks and balances model, so effective reforms of law enforcement agencies remain an important guarantee for receiving IMF tranches and military and economic assistance. The United States wants transparent cooperation, whereby the official who provides Ukraine with funding will be convinced of the existence of strong institutions that will prevent these funds from being stolen. Afghan state and military leaders truly believed that American aid would resolve any problem, and that the American army would always be present on their territory. Therefore, they were convinced that corruption and flawed institutions were not a big problem for their government, because the United States was always there to cover the costs and lend a helping hand. However, at one point, American support was suddenly gone and the Afghan government disappeared. In the end, Ukraine should draw its own conclusions from the events in Afghanistan. Ukraine must build a more effective and honest partnership, but all the keys to achieving this are in Kyiv’s hands. In other words, Ukraine’s ability to become a “success story” for the White House depends strongly on the Ukrainian government.