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Thursday, May 23, 2024

Russia Ukraine Crisis: Who is the beneficiary?

In this whole game, the only beneficiary is the US followed by its strategic partner India. As the outcome of the war, the dollar is gaining momentum and with that, the US can maintain its global hegemonic position. The outcome is not only limited to strengthening the dollar but cornering China. The US uses all states to influence China and pass on strong signaling to deter China from becoming its competitor in world politics.

Indeed, the war in Ukraine is causing food and fuel crises. Smaller supplies and higher food prices mean that the world’s poor could be forced to do without. But the war is still going on. Altogether the war claimed the lives of more than 2,900 civilians, military casualties are probably more than the tens of thousands. But why this war? Let’s investigate ‘why’ and who is the beneficiary of the war.

Can it be Russia? Well, Russia is facing deepening isolation post-invasion due to heavy sanctions. Where six rounds of nearly over 4000 economic sanctions have been imposed. Many foreign companies have announced plans to stop their operations or investments in Russia, including the European Space Agency, Oracle, BMW, Apple, MAERSK, and Airbus. Russian banks were removed from the SWIFT system, while the biggest Russian lender Sberbank withdrew from the EU market. As a result of sanctions pressure, the financial sector of Russia has suffered irreparable losses.

Read more: Pro-Russian separatists capture UK fighter in Ukraine

The Russian ruble has been losing its value since the beginning of the war

Western countries have frozen their assets and knocked out 45% of Russian foreign exchange reserves (Russia cannot use total reserves of $609 billion). With this Russia is in full-scale economic and military war.

Then is Ukraine the beneficiary? Apart from the military hardware, Ukraine has lost more than half a trillion dollars in terms of physical infrastructure since the war broke out. At least 195 factories and businesses, 230 healthcare institutions and 940 educational facilities have been damaged, destroyed or seized. Residential buildings and roads accounted for the largest sum of infrastructure damages at almost $60 billion in losses, with 23,800 kilometers (14,788 miles) of roads damaged or destroyed. Damages to Ukrainian business assets amounted to almost $10 billion.

As of today, Russian forces controlled most of Severodonetsk. According to President Volodymyr Zelenskyy more than 20 % of the area is captured by Russia. He further admitted that Russian forces had a numerical advantage in the battle where street fighting is still raging at a high pace with 97% of the Donbas city under Russian control.

Read more: UK offers Ukraine long-range missile systems despite Putin warning

In this environment, Zelenskyy appealed to the west for more weapons including missiles to arrive faster. There are a lot of happenings but the human cost is too big to handle. Where more than 14  million Ukrainians have been forced to flee their homes since the Russian invasion on February 24. Around (per Ukrainian sources) 263 children have been killed as a result of the invasion and conflict, while more than 467 have been injured. According to Pramila Patten, the UN Special Representative on Sexual Violence, there is an unprecedented displacement of millions of Ukrainians turning into a human trafficking crisis.

All of these suggest that war crimes are at its peak

Some reports also suggest that about 60 percent of Ukrainians need psychological help as a result of the war. This means Ukraine is not benefitting from the war. Then the question is whose war Ukraine is fighting with Russia? Is it for Europe?

Europe is heavily dependent on Russian oil and gas where one-quarter of oil and 40% of its gas requirements are coming from Russia. Europe has yet not imposed a complete ban on energy imports from Russia. If it does the prices could go as high as $200 – $250/bbl. According to some estimates, a 10% gas shortfall will trigger a 0.7% contraction. On top of that Europe has to deal with the refugee crisis. The European economy will deteriorate and will lead to social unrest. All of these will directly hamper its overall security. But can Europe afford this war? The simple answer is NO. Then who is pushing Europe and Ukraine into this conflict? Is it the US?

Based on the above facts, the main goal of this war looks like to impose sanctions on Russia to damage its economy and hence its national security. Europe and Ukraine are fighting to achieve the US agenda. These states are spending time on unnecessary sanction plans to contribute to the US ‘Bleed Russia’ policy. But in the process, their economy is constantly bleeding without even realizing it. It’s the people of Europe and Ukraine paying the price. It is not about the people of the United States of America paying the financial, physical and psychological cost of the war.

Read more: Evolving dynamics of Russia-Ukraine conflict on global balance of power

Where the Europeans are getting dependent on the US which is getting stronger with each passing day. Instead of carrying along with their old energy arrangement from the Russian market now, Europe has to find an alternate way. Which is both costly and time-consuming. Their rising economic issues and finding alternate means of energy dependence is not in the best interest of Europe. The US has played such a chessboard where all European countries are looking towards the US for help and support to overcome their food, energy and humanitarian crisis.

Unfortunately, the cost of war is not limited to Europe alone, its heat is felt by the Middle East and African Region (MENA) too. The MENA region is dealing with a rising food crisis and energy shortfall. Along with that regime change and debt, traps are getting in fashion in most of the countries that are significantly associated with the wrong side of the US. In this tense global economic environment, India is doing great. But how come?

How India is dealing with the situation?

India being the strategic partner of the US is taking full advantage of both Russia and the US. Though being a member of the quad, India is engaged in an oil deal with Russia. Currently, India is importing oil from Russia at cheaper rates and eyeing for exporting the POL product to Europe at higher rates. But here the irony is that the US gets seriously upset with other states like Pakistan to negotiate oil deals with Russia but is quite comfortable when it comes to India. This could be alarming for Russia in times to come. Maybe the US still wishes to control the Russian market by engaging its strategic partner in the deal. Where it gets both monetary and market control benefits. The moment the US decides to damage the Russian deals it can ask India to step back.

Read more: Implications of Indian neutrality on Russia-Ukraine conflict

Well in this whole game the only beneficiary is the US followed by its strategic partner India. As the outcome of the war, the dollar is gaining momentum and with that, the US can maintain its global hegemonic position. The outcome is not only limited to strengthening the dollar but cornering China. The US uses all states to influence China and pass on strong signaling to deter China from becoming its competitor in world politics. The US to certain degrees has achieved its goal already where China failed to bail out Sri Lanka and Pakistan and with that it lost its credibility in the developing world.

China also failed to sign the economic and security agreement with the ten pacific islands. Overall, there are three takeaways from studying this war: 1) China lost its credibility; 2) US strengthened its strategic position; 3) Europe became dependent on the US. Resultantly the US will remain an international hegemon and India will become a regional hegemon to counter China while all other states as losers of the highest order.


Dr. Farah Naz is an Assistant Professor in the Department of Government and Public Policy at the National University of Sciences and Technology. The views expressed by the writers do not necessarily represent Global Village Space’s editorial policy