Russia vs. Ukraine: Raging Decade Old Conflict

Penned by Priyank Tantia and Sakshi Sharma

INTRODUCTION

The Russian-Ukrainian conflict is an ongoing matter which started in early 2014. It has Russia and pro-Russian forces on one side and Ukraine, along with the support of North Atlantic Treaty Organization (NATO) and European Union (EU), on the other side. Though the conflict has been raging for the past 8 years, it took an ugly turn of events when Russia deployed about 100,000 soldiers and advanced military equipment near its border with Ukraine in late 2021. There have been various demands put forward by Russia. The demands included prohibition on Ukraine joining the North Atlantic Treaty Organization (NATO) and a decrease of NATO soldiers and military equipment in Eastern Europe in exchange of de-escalating the situation along the Ukraine’s border.

History

Ukraine was an important part of the Soviet Union during the Cold war, against their arch-rival US. It was only second to Russia in terms of population and power in the Soviet Union. Ukraine’s decision to leave the Soviet Union in 1991 was a huge blow for the ailing superpower of that time. Post-independence Ukraine has been aligning more towards the western counterparts and moving away from the influence of Russia. Ukraine sees its future with the EU and NATO.

But its journey has not been an easy one till now. It became a battleground when Russia annexed Crimea in 2014. It was the first time since World War II, that a European state seized a territory of another European counterpart. The reasons cited for conflict are as follows:

One of the major reasons for Russia’s peaked interest in Ukraine is the welfare of the Russian diaspora living in Ukraine which is over 8 million according to the 2001 census.
Another reason is that Russia sees that losing the hold of Ukraine in 1991 was a huge blow to its power and prestige. Thus, they want to rectify that decades old mistake.
Crimea was transferred to Ukraine from Russia to strengthen the relations among Soviet Union nations. But after the fall of the Union and Ukraine’s exit, Russia has been longing to get back its old territory.
Russia has an intent of preserving its political influence on Ukraine and other nations which were a part of the Soviet Union. Thus, after Russia’s preferred candidate lost the Presidential elections for Ukraine in 2004, the conflict worsened.
Ukraine’s inclusion in NATO will also mean lost influence of Russia over it.

Current Situation

On 13 November, Ukrainian President Volodymyr Zelensky announced that Russia had deployed 100,000 troops in the border area. This prompted the U.S. officials to warn the EU that Russia could be planning a potential invasion of Ukraine. It was countered by Ukraine deploying 125,000 troops, almost half of its army, in Donbas to confront the Russian deployment. Russia also claimed that Ukraine broke the Minsk Peace Agreement as well. Since then, Russia has been building up its troops in the border region which has escalated the situation even further. This has triggered the greatest security threat in Europe since the Cold War.

US, UN, NATO Stance

The US has always been on Ukraine’s side against Russia. It does not recognize Russia’s claim over Crimea. The US is committed to the restoration of Ukraine’s territorial integrity and sovereignty. The US tried to appease the situation by proposing to Russia and Ukraine to solve the issue in Donbas through the Minsk Peace Agreement. The US has taken several retaliatory measures against Russia which also includes sanctions against the Russian economy. The US also provided Ukraine with military equipment in January 2022, to strengthen its position against Russia. Various officials of the Biden administration have made it clear that the US stands with Ukraine and if Russia invades Ukraine, then Putin will pay “a serious and dear price” and would regret such an attempt.

While US has been quite vocal about its stance, the UN has been blamed for its inaction. Ukrainian President Volodymyr Zelenskyy has accentuated the UN’s response of negligence over the stand-off time and again. Citing UN’s inability to curb the passport imperialism problem in eastern Ukraine, he has hinted at the council’s bias towards Russia, which happens to be one of the prominent members of the UN Security Council. The inaction, he feels, is tantamount to giving a free pass to the rising instability and authoritarianism, which would ultimately cripple the international relations. UN-secretary Antonio Guterres has been blamed for taking the diplomatic backseat w.r.t the unstable situation.

NATO seems to be hanging in the middle of the dilemma. However, its stance appears to favor Ukraine. NATO Secretary-General Jens Stoltenberg has extended support to Ukraine through the provision of Comprehensive Assistance Package (CAP). The package allows Ukraine to enhance its security and defence capabilities based on Euro-Atlantic principles. Moreover, the organization has backed US, clearly signalling to Russia that the starting a war would lead to severe ramifications for the country.

Economic Implications

The escalation of the conflict will lead to the imposition of economic sanctions on Russia. While the sanctions aren’t explicit yet, they are likely to involve the cutting off Russia’s largest financial institutions from global transactions, imposing an embargo on American-made or American-designed technology needed for defense-related and consumer industries, and arming insurgents in Ukraine who would conduct a guerrilla war against a Russian military occupation.

The two most talked about sanctions which are likely to affect the world economy involve the ouster of Russia from the SWIFT system and the halt on the use of Nord Stream 2 Pipeline. The SWIFT system executes global financial transactions between 1100 banks in 200 countries. A cut-off from the system makes it difficult for a country to undertake international transactions. The SWIFT cut-off isn’t a new technique and has been partially successful against Iran. The effects in the short term are usually devastating as the termination of the international transactions triggers currency volatility and massive capital outflows. However, the proposed policy’s extent of effect on Russia seems to be unclear as the country has prepared itself for the global-sanctions proofing by stockpiling gold & dollar reserves, and forging an alliance with the Bank of China to set up a domestic version of the SWIFT.

The Nord Stream 2 pipeline, on the other hand, eases the delivery of gas (to Europe through Russia) and would possibly increase EU’s reliance on natural gas imports from Russia. Ukrainian invasion by Russia would lead to a halt in the Nord 2 pipeline by Germany. This is likely to invoke a counter-sanction from Russia, involving reduction in the supply of gas deliveries to Europe. The consequence would be a hike in the price of natural-gas which would fuel the existing inflation. The end result would be a slowdown in the recovery of the global economy, which has taken a serious hit due to the Covid-19 Pandemic.

The food inflation across the world is also likely to exacerbate if the conflict continues. The imposition of sanctions will lead to increase in geopolitical risks in the Black Sea region which is a trade route for 4 major exporters – Ukraine, Russia, Kazakhstan and Romania. Ukraine is the third largest exporter of corn and fourth largest exporter of wheat. Russia is the largest exporter of wheat. Therefore, one definite outcome of increased geopolitical tension would be a surge in the wheat prices. Additionally, the intensification of the crisis would multiply the uncertainties in the foreign currency market. Russia’s rouble and Ukraine’s hryvnia have suffered enormously and are the worst performing currencies so far. A further deteoriation is likely to increase the liquidity gaps and US dollar hoarding, worsening the global economy.

The conflict also has huge consequences for India. India’s international relations with Russia, China, Europe, U.S, and even Ukraine are bound to get complicated if the war becomes a reality. The conflict is likely to strengthen Sino-Russian relations, in turn posing strategic challenges for India which is dependent on Russia for military supplies. Furthermore, it would become strenuous for India to maintain partnerships with US, Russia and Europe. India’s best interest, therefore, lies in a quick de-escalation of the matter.