The onslaught of Russian forces is at full throttle against Kyiv, tinkering with the possibility to topple the Zelenskyy regime and negotiate directly with the military (at least that is the word from the Russian Security Council). The western response is as expected: slamming restrictions over notable Russian banks, barring industries from supplying raw material to Russia, and levying heavy sanctions on core members of the Kremlin – including Vladimir V. Putin and his close circle of confidants.
Regardless, the brazen invasion continues as more than 250 Ukrainian soldiers and civilians have reportedly died while hundreds of thousands of citizens swarm the neighboring borders of Romania, Poland and Hungary for refuge. Roads strewn with blood and rubble, the world is perplexed – almost hazed – by the unraveling conflict: the most brutal since the mighty war in the 40s. Russians are drilling Ukraine into segments, the western block is busy drafting rafts of sanctions, and rivals are weaving strategies to somehow remain neutral in a stark spread towards a modern Cold War – deny it as much as you want, but it is Cold War 2.0! The underlying question – that I am sure is pestering the west as much as Ukrainian policymakers – is quite apparent:
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Russian military convoy nears Ukraine’s capital
What actually went wrong?
The US was sure that Putin had been planning an invasion since December. Biden claimed it as a historic step that classified information regarding nefarious Russian plans was getting paddled across the Atlantic to disarm Putin’s aspirations. Analysts hailed that the US was pushing back after the colossal failure in Afghanistan. Diplomats believed that this US was vastly different from the isolationist country envisioned by Donald Trump. To give due credit, Biden did manage to engage NATO at a record pace in response to Russian threats. The sanctions placed at standby – contingent on Russian sway towards militancy or diplomacy.
Baring a few roadblocks, the alliance seemed united. And at some point, Russia legitimately seemed to backtrack. Putin announced that the military drills in the region adjacent to rebel-controlled Eastern Ukraine approached denouement, and the troops were returning. Suddenly, Putin recognises the independence of the Luhansk and Donetsk Peoples Republics and tables his order to Russian troops to invade – supposedly as a ‘peacekeeping mission’ since the Russian forces have allegedly loitered in the Donbas region since the 2014 Crimean annexation.
The world jolted as Russian forces penetrated Ukraine from three fronts – Belarus in the North, Donbas in the East, and Crimea in the southern peninsula. The positions were apparent for weeks as Russian forces were swelling across the border – even when Putin denied any intent of an invasion. The western world panics and ventures into default mode – slam sanctions and issue strong-worded warnings. Did it make a difference! “Have the US sanctions solved any problem? Is the world a better place because of those sanctions?
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Will the Ukraine issue resolve itself thanks to the US sanctions on Russia?
Will European security be better-guaranteed thanks to the US sanctions on Russia?” Hua Chunying, a Chinese foreign ministry spokesperson, echoed the prevailing rhetoric. The attacks continue while Ukraine pleads the European Union to do more than mere sanctions and warnings. The problem is simple: they cannot do very much else.
The European Union is the largest importer of Russian energy supplies. Crude prices have already soared through the roof – Brent crude, the global benchmark, trading up by 8.5% to an 8-year high of $105.40 per barrel. Naturally, the Oil and Gas industry got conveniently sidestepped when imposing sanctions. The Russian Commodity market also stands safeguarded to a large extent. True, the Russian bourse has plummeted, and the Rouble is at its lowest in years.
But the impact is barely damaging to the Russian economy in the long run. Russia is the world’s second-largest gas, and the third-largest oil producer (second-largest crude exporter). While the US is not directly dependent on Russian energy, Europe imports almost half of its energy requirements from Russia. I admit Germany’s unprecedented decision to halt certification of the Nord Stream 2 Pipeline (Russia’s $11 billion energy project) would be damaging to Russia – both economically and strategically. However, the consequences are not particularly scenic for Europe either.
“Welcome to the new world where Europeans will soon have to pay 2,000 euros per thousand cubic meters!” remarked Dmitry Medvedev, Russia’s former president. Analysts believe that, while Russia has yet not choked its regular gas supply to Europe, the energy prices are bound to double as early as April. On the other hand, Russia has spent the last eight years diversifying away from the US dollar – to soften the blow of such sanctions. Russia currently stands with $600 billion in foreign exchange reserves – the fourth largest of the world.
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Understanding Russo-Sino bilateral ties
However, barely 16% of these reserves amount to the US dollar – down from almost 40% a few years ago. This Dedollarisation campaign would hedge the Russian economy from the searing brunt of these sanctions. China currently stands as Russia’s largest trading partner, both as an exporter and as an importer. The Russo-Sino bilateral trade has consistently grown over the past few years – hitting a record high of more than $145 billion in 2021. According to AidData – an international research lab – Russia has been the largest recipient of Chinese loans from official sector institutions – totaling $151 billion between 2000 and 2017. It does not take a political scientist to connect the dots. Russia has a backup plan to counter an economic fallout. Europe (unfortunately) does not have a backup!
Both China and Iran have blamed the United States for conjuring up this crisis and riling Putin to invade Ukraine. While the statements are outrageously exaggerated, there is some truth to the stance. Putin continued to protest that Russian security concerns have been violated by NATO expansion in Eastern Europe. But the US persisted in keeping a vague prospect to Ukraine as a potential NATO member. Putin persistently critiqued the legitimacy of NATO expansion after the collapse of the Soviet Union. Yet, Europe continued to forge alliances with the former Warsaw nations, again with a vague promise of EU membership. Until recently, Ukraine was a point of contention that NATO held as leverage against Russia. Many warned that baiting a nation with a ruthless history of dictatorship could backfire. And despite the exhibits of Georgian invasion and Crimean annexation, the western obduracy never receded.
The war at hand is by no means a fault of Ukraine. But it is not solely the fault of Russia either. The western bloc – particularly the US – is equally to blame. It was so busy forcing its supremacy over Russia that it never once occurred – what if an invasion did ensue? Never once did the US – and Europe – offer an unequivocal platform to Russia to discuss the security concerns (no matter if they were trivial or contrived!). Now Ukraine is proposing neutrality apropos of NATO and EU. Now the US – and NATO – is concerned about the safety of civilians while abandoning Ukraine with artillery and a barrage of worthless sanctions. Now they expect the Russians to retreat and return to the table. I am afraid it is too late to urge level-playing diplomacy when a restive Russia is on the crux of dismembering Ukraine while the world watches as mere bystanders!
The writer is currently working as a writer for South Asia Magazine and a columnist for Modern Diplomacy – a European Think Tank. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.