Russia-Ukraine war Future of the Annexed Territories and Global Economy -Imran Nazir

Eight months have been passed but there is still no sign of the ending of Russia and Ukraine war. Rather both sides of belligerents are advancing their warfare with renewed relentless vigor by the turn of new events. Specially the recent resilience of Ukrainian soldiers against Russian advancement has proved the effectiveness of western military assistance to prolong the warfare within Europe. It is apparent the ubiquitous impact of the war has shaken the world economy and politics exponentially. This has a greater concern for the marginalized people around the world as the global economy has entered a state of recession and higher inflation. Besides, the uncertain future of four annexed Ukrainian territories, Donetsk, Luhansk, Kherson and Zaporizhia, by Russia through referendum is also protracting the conflict and making the peace process even more difficult.
Apart from economic losses, sufferings of human beings in the war is noteworthy. Ukrainian civilians had to pay higher degree of cost, in fact they are continue to undergo through devastation due to the military outrage in the war. Constant Russian bombings and shelling in public places in different Ukrainian cities displaced millions of people and killed a large number of civilians. About 6,000 people have been died and 7890 wounded, according to official statistics provided by United Nations, in the war where there may have been more undocumented casualties. It is perceived that real numbers would be more than tens of thousands. Unbearable sufferings of children and older during war made the humanity cry. Since war kicked out in February, more than 6 million people have crossed Ukraine border to take refuge in many European countries. It is interesting to note that more than two and half million people have entered Russia while more than 1.5 million people have taken refuge in neighboring country Poland. Also a good number of people have taken shelter in other European countries including Germany, Moldova and Romania. Most of the European countries have felt the strong wave of Ukrainian refugees as soon as Russian attack was launched.
Casualties among two combating groups are still continuing to rise. Both sides have lost huge number of military personnel. To date, available statistics say that approximately 9,000 Ukrainian soldiers have been killed in war. It is interesting to note that the variance regarding the death number of Russian soldiers is still in ambiguity. Current statistics demonstrate that the number might be around 25,00 while another US statistics argues that casualties among Russian soldiers might have been 70,000 to 80,000. Russia has only disclosed its death counts of one month in Ukraine war by 25 March amounting 1351. It casts doubt to analysts that how Ukraine could kill such larger number of militants with relatively weaker arms, ammunitions and machinery. It is true that a vast amount of military aids has been injected in Ukraine by the western countries. In fact, those arms supplies have proved effective to some extent to operate recent counter offensives against Russian invasion of Ukrainian cities. Predominantly western media have been claiming success of Ukrainian advancement against Russian captured territories. It is invariably believed that more than 8,000 square kilometer Ukrainian territories have been taken by Ukrainian soldiers by squeezing Russian soldiers. Fall down of Russian rule in Kharkhiv after 6 months signifies the strategic move from Ukraine. Russian retreat from Ukrainian territories also give different explanation. It may not be the case that Putin is retreating rather diverting the attention of adversaries in war strategy.
Besides, Putin has hastily proclaimed the annexation of the four Ukrainian regions, namely Donetsk, Luhansk, Kherson and Zaporizhia, and declared their citizens as “our citizens forever” in late September. Kremlin also undertook referendums earlier in these occupied territories and according to poll, 99% people have shown their will to join Russia. Though international community, including UN has strongly denounced the Russian move to merge these Ukrainian territories with its existing international boundary as contrary to international law. Such arrogant move by Russia actually helps to perpetuate the conflict in the region along with western backing. We have seen Russia revamped with new offensive in the aftermath of the attack on the Crimean bridge on October 8. Such bizarre situation is making the peace process even more difficult. It is noteworthy the remember that Russia once occupied and then constitutionally incorporated Crimea in 2014 from Ukraine. Fate of the newly occupied four regions may also be same. Evidently Russia was the de facto guardian of Donetsk, Luhansk even before the initiation of recent Ukraine war. It would be virtually impossible for Ukraine to reclaim its lost territories. Especially as long as Putin is in control since nationalistic leaders tend to be far more rigid about giving concession in negotiation. Additionally, Russia may fall in deep trouble if it cannot manage these territories so well under arms. Experience has shown that more attacks are regularly being carried out by Ukrainians inside Russia as days pass by. So, ill management would give extended opportunities for Ukraine to destabilize Russia by making stained image of Putin unfavorable among common Russians. Otherwise, Russia may focus on these territories more closely since it would be costlier to wage such a massive war.
Sanctions are nothing new to Russia since European allies along with USA have been sanctioning Russia even before the initiation of the Ukraine war. Western alliance has sanctioned Russia in the aftermath of the annexation of Crimea in 2014. As of now, the main objective of putting economic sanction on Russia is to weaken the Russian economy so that it has to limit its aggressive military adventures in neighborhood. Expectedly western countries immediately imposed hundreds of sanction on Russia as soon as the war broke out in Ukraine border. Sanctions have been devised to attack the Russian economy and key political and business personnel who may fund the Putin’s war. Wealthy oligarchs, banks, business and state-owned enterprises were the primary target. Assets of Russia in US banks has also been frozen to cripple the Russian economy. Besides, its 630 billion USD reserve in different currencies was also held. West’s sanction targeted the personal assets of political leaders and businessmen of Russia in USA and different EU countries. Additionally, differentiated import and export bans were also imposed. It is interesting to note that products (e.g. food, fuel) critical for European countries were exempted in the sanction framework to retain the stability in Europe as price hike could destabilize their internal market stability.
However, the ultimate outcome of the sanctions did not confine within Russia or Europe. It is important to understand the nature of the global economy. It is like a human organ where every part is integrated with the whole body. Downgraded performance in one part would compromise the normal functioning of others. Similarly, Europe’s problem is having strong bearing with the global political and economic stability. Excluding Russia from using the Society for Worldwide Interbank Financial Telecommunication (SWIFT) for international transactions made its business exchanges virtually impossible. Consequently, Russia has also taken counter measures to combat the West’s sanctions by curtailing energy supply. Which resulted like a bombshell in energy market with immediate skyrocketing fuel prices and consequently making the whole global economy in a fix. Total production sector is in chaos due to the increased raw material cost as well.
Impact of the sanctions on Russia has raised a set of general issues for the whole world. Consequently, Bangladesh has also been badly impacted due to the war and its aftermath actions and counter actions. It is noteworthy that the global economy was struggling with the profound stress of Covid-19 and climate change in different regions. Eruption of Ukraine has just deteriorated the already exacerbated situation. Commonly, price hake in daily commodities, increasing cost of production, skyrocketing inflation rate, failure to meek balance of payment and repay the debt for many countries have been a common feature in the world in the wake of economic crisis ushered by Ukraine war. There is vicious cyclic theoretical explanation behind this grim situation. Initially, dislocation of major actors in production chain creates disruption in the supply side which in return result in supply shortage. Access to commodities become harder to achieve for consumers. Consequently, smooth function of global trade and transaction cripples due to barriers.
It is undoubted that the result of sanctions by western countries is creating a global crisis which is not remaining in economic loss alone. Moving from state centric macro analysis to micro analysis shows how this economic crisis is making some losers and winners to some extent through disproportionate impacts distribution. It is evident that the repercussion of these sanctions have not only costed the basic welfare provisions of Russian people but also the ordinary people of the most vulnerable regions globally. Antonio Guterres, UN Secretary-general, has rightly remarked that, “those on the ground, every day brings new bloodshed and suffering. And for people around the world, the war, together with the other crises, is threatening to unleash an unprecedented wave of hunger and destitution, leaving social and economic chaos in its wake.” More than 60% workers are now being paid lesser amount compared to pre-coronavirus situation. This segment of households is battling hard to allocate their limited resources against increased living cost. Food shortage coupled with higher price is leaving more people hungry owing to global economic downturn. World Food Programme’s recent estimation shows how the number of severely hungry people doubled from 135 million to 276 million after pandemic and now likely to climb up to 322 million in a short period of time. Bangladesh, home to nearly 40 million poor combing new poor, is facing harsher reality. Definitely, women and children would face the consequence most from the front.
Rising fuel price is also becoming a critical enabler of pain accelerator for a large segment of population around the world. Due to Russian counter measures, energy price has been dramatically increased. Increasing transportation cost is having the most negative impacts on the marginalized population. Countries like Bangladesh is facing immense pressure to make payment for fuels due to trade deficit. Increasing price of dollar has also pushed further Bangladesh and consequently increased commodity price of many imported goods. Securing smooth energy supply for industrial production would be vital as the collapse of the industries due to raw material shortage and addition raw material cost would mean millions of people are out of work globally without having anything to support their households. Shortage of gas for fertilizer production will surely undermine the food security.
It is hard choice to nullify the relevance of west’s sanctions on Russia as we have not yet found any decisive outcome of those sanctions rather Putin has earned billions of dollars as additional profit from selling fuels at extra price strengthening ruble currency. As we lack evidence effective result, but we are certain that millions of unprotected people are globally suffering from the economic crisis born from Ukraine war. It is not a prudent idea to support autocracy but finding remedy to end authoritarian regime through the agony of millions is not either a good idea to pursue.
So, west should be more efficient in targeting the war mongers, not the ordinary Russians and global poor through weaponizing economy. Beside, peace process is becoming more unlikely.