This year marks the ninth anniversary of the ongoing conflict between Ukraine and Russia, which began in 2014. The conflict, which began as a political crisis, has since escalated into a full-blown war, resulting in significant human suffering and geopolitical implications that have impacted the entire world.
The flashpoint was in November 2013, when Ukrainian President Viktor Yanukovych announced his decision to postpone the signing of an association agreement with the European Union in favour of closer ties with Russia. This decision sparked widespread protests in Ukraine, leading to Yanukovych’s ouster and installation of a pro-Western government which preferred to stand with neighbouring country Georgia which was under Russian aggression.
Russia, which has long been interested in maintaining influence in Ukraine, responded by annexing Crimea in March 2014. The move met with international condemnation, followed by Western sanctions on Russia in response. Russia’s annexation of Crimea accelerated Eukraine’s long standing desire to join the NATO umbrella as a security cover which enraged Russia further.
Since then, the conflict has escalated, with pro-Russian separatists taking control of parts of eastern Ukraine, and the Ukrainian military engaging in retake disputed territories. The conflict has resulted in deaths of more than 13,000 people, the displacement of more than two million, coupled with significant economic damages to the region as six major Eukranian cities and three provinces have been ravaged. It will take long time and heavy cost to rebuild.
The impact of the conflict has been felt worldwide, with deterioration in relations between Russia and the West. The annexation of Crimea and the ongoing conflict have also led to a significant increase in military spending in Europe, with NATO members increasing their defence budgets in response to what they see as a growing threat from Russia. Countries like Sweden and Finland are desparate to join NATO while Japan in arming itself to teeth.
The conflict has also had significant economic implications, with the US & EU vurses Russia imposing trade sanctions on each other, resulting in catastrophic economic damage to both sides.
The ongoing conflict between Ukraine and Russia has severe impact on the world economy in multiple ways:
- Trade disruptions: The conflict has disrupted trade between EU, Ukraine and Russia, as well as other countries in the region. This has had a negative impact on the economies of many countries.
- Energy prices: Russia is one of the world’s largest oil and gas producers, and the conflict has had an impact on global energy prices. The uncertainty surrounding the conflict has led to fluctuations in oil and gas prices, which can have a ripple effect on the global economy. Many countries who are no way concerned with war have also been badly affected.
- Sanctions: In response to Russia’s actions in Ukraine, the United States and its allies have imposed economic sanctions on Russia. These sanctions have had a negative impact on the Russian economy, particularly in regards to access to international finance and technology.
- Investment climate: The conflict has created uncertainty in the region, which can have a negative impact on the investment climate. This can lead to a reduction in foreign investment, which can further harm the economies of both Ukraine and Russia.
- End of Globalisation : The dream of Global trade order nurtured over past two decades is now ruptured. It will take a long time to build Global trade order, all that confidence among various nations and international commerce.
In any case even either nation wins, inevitably it will be sitting on heap of ashes with its neighbour for many years in the time to come.