The Ukraine war now reached its one-year mark on February 24, without the Russians achieving any military victory.
It suddenly seems like a battle of egos is rising but gritty wits and sense is failing. The West has not achieved its goals on the economic front when Russia invaded Ukraine, Russian economy is in shambles while the United States and its European allies vowed to strike crippling sanctions that would bring Russia to its knees and force it to withdraw.
In this strange situation while thousands of innocent have lost their lives, millions fleeing Ukraine and even Russia, the world leaders are mewing like kittens with threats to Vladimir Putin falling like water on a duck’s back.
Putin Wanted the Iron Curtain Back
Putin was after Ukraine during the era of the USSR, in the days of the Iron Curtain, when the rule was repressive and redundant, except for its towering nuclear power. Putin has often expressed his displeasure with Mikhail Gorbachev’s open liberal policies. It appears President Vladimir Putin wants to capture back that old Russia and bind it together again. Reminiscing over the past, he wants to grab back that ancient rule of unions.
Ukraine’s Port Sevastapol
As Russia is massive with 11 time zones long and has a 36000 kilometers long coast and 17 million square kilometers in area, it would seem ridiculous that Russia would be after the tiny country Ukraine.
However, there is a reason why Putin wants Ukraine: Russia, a freezing cold nation has ports closed for most of the year, and trade and commerce are affected. For good trade, you need warm water ports to strengthen trade all year round with strong connections around the globe. Ukraine has a coast along the Black Sea connecting to the Mediterranean which opens up the entire world. Ukraine’s Port Sevastapol is a warm water port in the region of Crimea (the small part that juts out in the south) and this is what Putin wants.
Russia also had a lease to use this warm water port and run its ships for trade. However, if Ukraine joined the EU or NATO, there was the risk of losing this port. After the fall of the Iron Curtain, countries close to Europe – Romania, Lithuania, etc fell with the west and NATO. The Eastern part of Ukraine supported Russia while the Western part went with the EU.
Russia still had to cross the Bosphorus channel controlled by Turkey, a NATO member, to reach the Mediterranean. Turkey allows Russian trade vessels in good faith but can stop anytime to pressure Russia.
Despite Sanctions, Russia Profited
Western sanctions on Russia reduced the global supply of oil and natural gas, but also pushed up prices. So Russia profited from the higher prices, even as its export volume decreased. India, which has remained neutral while buying oil from Russia at a discounted price, is projected to maintain its 2022 growth rate of over 6% per year all through 2023 and 2024. China has also benefited from buying discounted Russian oil and from an overall trade increase with Russia of 30% in 2022. China’s economy is expected to grow at 5% this year.
The International Monetary Fund (IMF) reports that Russia’s economy only contracted by 2.2% in 2022, compared with the 8.5% contraction it had forecast, and it predicts that the Russian economy will actually grow by 0.3% in 2023.
On the other hand, Ukraine’s economy has shrunk by 35% even with intense funding of $46 billion in economic aid from generous U.S. taxpayers, on top of $67 billion in military aid.
European economies are getting hit where after growing by 3.5% in 2022, the Euro area economy is anticipated to stagnate and grow only 0.7% in 2023, while the British economy is projected to actually contract by 0.6%.
Germany was more dependent on imported Russian energy than other large European countries so, after growing a meager 1.9% in 2022, it is predicted to have negligible 0.1% growth in 2023. German industry is set to pay about 40% more for energy in 2023 than it did in 2021.
The United States is less directly impacted than Europe, but its growth shrank from 5.9% in 2021 to 2% in 2022 and is projected to keep shrinking, to 1.4% in 2023 and 1% in 2024.
Other oil and gas producers reaped windfall profits from the effects of the sanctions. Saudi Arabia’s GDP grew by 8.7%, the fastest of all large economies, while Western oil companies rose to deposit $200 billion in profits: ExxonMobil made $56 billion, an all-time record for an oil company, while Shell made $40 billion and Chevron and Total gained $36 billion each. BP made “only” $28 billion, as it closed down its operations in Russia, but it still doubled its 2021 profits.
As for natural gas, U.S. LNG (liquefied natural gas) suppliers like Cheniere and companies like Total that distribute the gas in Europe are replacing Europe’s supply of Russian natural gas with fracked gas from the United States, at about four times the prices U.S. customers pay, and with the climate impacts of fracking.
French President Emmanuel Macron remarked, “In today’s geopolitical context, among countries that support Ukraine, there are two categories being created in the gas market: those who are paying dearly and those who are selling at very high prices… The United States is a producer of cheap gas that they are selling at a high price… I don’t think that’s friendly.”
An even more unfriendly act was the sabotage of the Nord Stream undersea gas pipelines that brought Russian gas to Germany. Seymour Hersh reported that the pipelines were blown up by the United States, with the help of Norway—the two countries that have displaced Russia as Europe’s two largest natural gas suppliers. Coupled with the high price of U.S. fracked gas, this has sparked anger among the European public. In the long term, European leaders may well conclude that the region’s future lies in political and economic independence from countries that launch military attacks on it, and that would include the United States as well as Russia.
The other big reapers of the war in Ukraine are the weapons makers, dominated globally by the U.S. “big five”: Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics. Most of the weapons so far sent to Ukraine have come from existing stockpiles in the United States and NATO countries. Authorization to build even bigger new stockpiles flew through Congress in December.
While a few countries and companies have gained from the war, countries far from the scene of the conflict have been reeling from the economic fallout.
Russia and Ukraine Suppliers of Food to the World Affected Due to Sanctions
Russia and Ukraine have been critical suppliers of wheat, corn, cooking oil, and fertilizers to much of the world. The war and sanctions have caused shortages in all these commodities, as well as fuel to transport them, pushing global food prices to all-time highs.
So the other big losers in this war are people in the Global South who depend on imports of food and fertilizers from Russia and Ukraine simply to feed their families.
While Egypt and Turkey are the largest importers of Russian and Ukrainian wheat, a dozen other countries depend almost entirely on Russia and Ukraine for their wheat supply, from Bangladesh, Pakistan, and Laos to Benin, Rwanda, and Somalia. Fifteen African countries imported more than half their supply of wheat from Russia and Ukraine in 2020.
The Black Sea Grain Initiative brokered by the UN and Turkey has eased the food crisis for some countries, but the agreement remains uncertain. It must be renewed by the UN Security Council before it expires on March 18, 2023, but Western sanctions are still blocking Russian fertilizer exports, which are supposed to be exempt from sanctions under the grain initiative. UN humanitarian chief Martin Griffiths told Agence France-Presse on February 15 that freeing up Russian fertilizer exports is “of the highest priority.”
Who Gained from the War?
After a year of death and destruction in Ukraine, one can conclude that the economic winners of this war are: Saudi Arabia; ExxonMobil, and its fellow oil giants; Lockheed Martin; and Northrop Grumman from the USA with weapon sales.
The losers are, first and foremost, the sacrificed people of Ukraine, and soldiers on both sides, and all the soldiers who have lost their lives and families who have lost their loved ones.
Ukraine was in darkness in the winter and people in high-rise buildings were preparing food on fire, Russian forces struck residential buildings, thermal power plants, and substations in Kyiv, Vinnytsia, Lviv, and Zaporizhia oblasts, causing widespread disruptions to energy, heating, and water supplies. After the latest wave of missile strikes by Russia, Ukrainian officials reported that three nuclear power plants on the territory held by Ukraine have been switched off.
Russian missiles in Ukraine leave children’s intensive care units without power “The lung ventilation system, without which children cannot breathe, is turned off. The source of radiant heat, without which they freeze, is switched off.”
Working and poor people everywhere, especially in the countries in the Global South that are most dependent on imported food and energy.
The climate degenerated with pollution in the atmosphere all lost in the war.
Western sanctions would erect a new Iron Curtain, hundreds of miles to the east of the old one, separating an isolated, defeated, bankrupt Russia from a reunited, triumphant and prosperous West. Not only has Russia withstood the economic assault, but the sanctions have boomeranged–hitting the very countries that imposed them.
President Volodymyr Zelensky of Ukraine is determined not to bow down to Putin who in turn is not willing to step back, ego? While it did not start as a battle of egos, it seems right now, it is.
The words of Brazil’s President Lula reflect that growing sentiment. When pressured by President Biden to send weapons to Ukraine, he said, “I don’t want to join this war, I want to end it.”
An American soldier shared this poster
“Stay out of Ukraine
No war with Russia
Not our fight
Not our business
I won’t kill for this
I won’t die for this”
Stop the WAR!#ukrainecrisis #UkraineRussianWar pic.twitter.com/tElzFoI91q
— 🇺🇲🚢CAPTAIN JON🦅🌎⚓ (@Capitaine_Jon) February 22, 2023
The war has degenerated into a battle of egos, with money, and gain for some, but nothing for others. The brutal massacres with the loss of innocent lives won’t make sense in the years to follow. While one may talk of grand sacrifice, sacrifice for what? The greed and egos of rulers fighting a senseless battle for “territory”, with nothing for the citizens and the poor? War always weakens nations and makes great countries fall. Check it out in history. Just a few people gain their treasures. In the end, it really looks like a battle of egos. There is too much pride in the leaders to step back or negotiate. There has not been a country strong enough to negotiate between Russia and Ukraine to stop the war. It appears America has lost its place as the most powerful nation in the world.