Ramifications of Russia-Ukraine Conflict
The world is worried lest the Russia-Ukraine conflict escalates into a third World War, with global powers pitted on either side, Russia on the one hand and the western world allied as NATO on the other. There are fears of a nuclear threat too. Even without an all out war, sanctions have already sent out ripples, impacting oil supply and prices, skewing global economies. There can be tectonic shifts in geo-political equations too, the rising of new world powers and the diminishing of others. India too will have its own share of the impact of the conflict...
The world is worried about the war situation in Ukraine, which could end up as the third World War. At the time of writing this column, Russia had already sent 1.80 lakh soldiers with sophisticated battle equipment on its border with Ukraine, and all indications pointed to an impending war.
About Ukraine:
Ukraine is a country located in Eastern Europe and is the second-largest country in the continent after Russia. A fully independent Ukraine emerged only in the late 20th century (December 1991) after long periods of successive domination by Poland, Lithuania, Russia and the USSR. Some portions of Ukraine were also ruled by Romania and Czechoslovakia in the past (between the two World Wars). After the breaking up of the USSR in 1991, Ukraine became a sovereign country along with nine other CIS countries. Ukraine is bordered by Belarus in the North, Russia in the east, the Sea of Azov and the Black Sea in the South, Moldova and Romania in the South-west and Hungary, Slovakia and Poland in the west.
Importance of Ukraine:
Ukraine is rich in mineral reserves, has fertile land and a highly educated 41 million population. Ukraine today is:
- First in recoverable reserves of Uranium
- Second in Europe and 10th in the world in Titanium reserves
- Second in the world in Manganese (12% of the world’s reserves)
- Second-largest iron ore reserves in the world
- Second-largest in Europe in mercury ore
- Seventh in the world in coal reserves
- Very rich in agricultural produce as it is the fourth-largest producer of potatoes in the world, and
- First in the world in exports of sunflower and sunflower oil.
Origin of the current crisis:
After its independence, Ukraine had a pro-Russian government until 2014, when a pro-west president got elected. Russia started fuelling civil unrest in the two eastern provinces of Ukraine, Donetsk and Luhansk. Separatists were helped by Russia. The people in these provinces were mainly of Russian origin. To add fuel to the fire, Russia has now (on 21st February 2022) recognised these two provinces as independent countries and has officially recognised the separatist groups as running the governments in these two provinces. Donetsk and Luhansk are being used as launch pads for Russia. Despite the warnings of the US and the statement given by Russia that it will not start a war, the situation on the ground is that Russian missiles have landed in Kyiv (the capital of Ukraine). Things are changing every day. Ukraine is trying to fight the might of Russia all alone so far (while writing this column), no troops have been deployed by NATO to help Ukraine. There are threats of economic blockades and Germany has even taken the lead in stopping the work of oil-pipline-2. Russia in its defence has said that missiles have been fired to target military installations. Things are getting complicated. Nobody knows the final outcome.
"A fully independent Ukraine emerged only in the late 20th century (December 1991) after long periods of successive domination by Poland, Lithuania, Russia and the USSR. Some portions of Ukraine were also ruled by Romania and Czechoslovakia in the past (between the two World Wars)"
Possible impact of the crisis:
The impact of the crisis is going to be severe. Even without war, with economic sanctions, the situation is grim. Russia is on one side and Western Europe and the US on the other. This scenario will mean a world war and the result will be catastrophic. Global trade and the global economy will get hit hard in addition to the loss of lives. War may even have nuclear overtones and that will be disastrous.
Some countries like the US may benefit from the sale of military equipment. Russia may be able to demonstrate its military power but its economy, which is not good even today, will badly suffer from economic sanctions. China may plan to swallow Taiwan if the US fails to fight for Ukraine. So far, China is silent despite its closeness with Russia. Recently, the US was criticised for its abrupt withdrawal from Afghanistan and allowing the Taliban to rule there. If the US fails to come out in active support to help Ukraine, then the US may lose its position of being a global leader. The position of being a global leader may be grabbed by China. The US will remain a rich country but not a leader if its allies are not helped at the time of need.
Europe gets a large supply of oil and gas from Russia. War would lead to economic sanctions which will disrupt this supply chain. The gas crisis in Europe will have a serious impact on the availability of oil and gas the world over. There will be a very steep price rise of petroleum products and countries will suffer. Gas supply by Russia is almost at one-fourth the price of the US gas supplied to Europe at present, and this huge price difference will have a further jump in a situation of scarcity. Brent crude had reached $105 per barrel only on the worries of a possible war.
Impact on India
Physically, India is far away from Ukraine but still, there will be serious problems for India. India imports almost 80% of its oil needs. With the price of crude oil going up in the world market, our import bill for oil will rise. There will be inflation in the country and our economy will suffer. We have not accounted for this problem in our Budget 2022 and this wild card entry will hit us hard. Secondly, the crisis will also impact our acquisition of weapons as Russia remains our main supplier and when Russia will suffer from bans, our supply will also suffer. Russian supply of S-400 missile is at present in the pipeline and the same may be the first casualty. We all know that with an adversary as powerful as China, this S-400 missile is tactically important for our military strategy. So far, India has remained neutral. Today, both US and Russia are our friends. It is very difficult to side with one. It is a tight rope-walk for India and we have to avoid falling on either sides. One big issue emerging for India out of the present crisis may be emboldening China on our northern border. China may take a lesson from Russia and also from the fact that the US has remained inactive even for its allies and friends. However, the only safeguard for us is that China knows our power on the battleground of hilly areas.
Fast-changing situation:
When I started writing this column, the debate was whether a war will take place or not.But now, Russia has officially announced the war. Russian troops have attacked Ukraine on land, sea and air. People are losing lives. Most of the military installations of Ukraine have been destroyed. Ukrainian airpower has been crippled. Russia is giving a call for surrender while the Ukrainian President is giving a counter call of fighting. There is a possibility of the fall of Kyiv, an installation of a pro-Russian government.
NATO is repeating threats of sanctions. But US or European troops have not come to Ukraine. Vladimir Putin has threatened the western world with nuclear consequences if they enter the war zone. We are witnessing a war in a small country but except for lip service, there is no help on the ground. Russia knows that it has China with it, which will buy from it despite the sanctions. Currencies may not be a problem when cryptocurrencies are available these days. Our Prime Minister Modi has spoken to Putin to halt the war and also for the evacuation of about 20,000 Indians from Ukraine (mostly students).
Lessons learnt:
In the game of war, the words spoken are never true. President Putin stated that there will be no attack on Ukraine but the war started just after a short while after his statement. The UN is incapable of stopping a war even if it is illegal. Countries have to depend on their own strength and not expect help from others, even if they are friends. Russia is basically keeping Ukraine as a buffer state between itself and Western Europe. Russia does not want the force of NATO on its border.
India, too, is suffering today as the buffer state of Tibet between India and China was taken away by China. Today, the Chinese are on our borders over a very long stretch. Foreign policy is dependent on national interests and not on the principles of morality. Bad things like wars benefit us in giving us a good experience. We learn to equip ourselves so as to fight against future problems.