A winter of more discontent: Should we be concerned about tensions between Russia and Ukraine?
By Elizabeth Morgan
To answer my own question, yes, we should be concerned about the tensions in Europe involving the Russian Federation, Ukraine and the North Atlantic Treaty Organization (NATO), and, yes, it is relevant to international trade, and to the economic situation in the Caribbean Community (CARICOM) and its Member States. For information, NATO, a security alliance, has 30 members, 27 in Europe, 2 in North America, and 1 in Eurasia (Turkey).
The world is a village. Whether we like it or not globalization makes us all intertwined and vulnerable to any major disturbances in the global community especially those involving the major powers. This security matter on the European continent is a power play and Ukraine is a pawn.
I have addressed the instability in the USA and think that I should also address the troubles in Europe in this time of pandemic with its accompanying economic setbacks and their implications. In March, we will begin the third year of the global Covid-19 pandemic, and who knows what other crisis we might be facing then.
Over the last 5 years in Europe, the EU has been having its challenges with Brexit and the departure of the UK, the rise of right-wing groups in some Member States, and the separatist movement in Spain. In Britain, the Conservative leadership is now looking quite tarnished and uninspiring.
Then, in mid-winter, pandemic notwithstanding, enters Russia’s President Valdimir Putin amassing troops on the border of Ukraine. Ukraine, a former satellite state of the then Soviet Union, had been in the news in the 2019 impeachment of US President Donald Trump and, in 2014, when Russia invaded and occupied the Crimean Peninsula. We know of Crimea because, Jamaican nurse, Mary Seacole, served during the Crimean War (1853-1856).
Why is President Putin sending troops to the Ukraine border? That country wants to join NATO and the EU. For President Putin, NATO is encroaching on Russia’s borders, which is seen as a security risk. It seems that he wants to dissuade Ukraine and NATO from implementing such decisions. Russian troop numbers continue increasing on the Ukraine border. The USA and other NATO allies are engaging Russia in shuttle diplomacy aiming to diffuse the situation, while sending military equipment to Ukraine, threatening severe economic sanctions against Russia, and moving troops into eastern European NATO States. The States bordering Russia, former Soviet States, must be uneasy.
Let’s look at Russia. The Federation has a population of 144.1 million of which 48% have been fully vaccinated against Covid using their own Sputnik vaccine. Covid numbers are rising there according to WHO data. In land mass, Russia is the largest country in the world stretching from Europe to Asia covering over 17 million sq Km. Its GDP is US$1.5 trillion making it the 11th largest economy in the world. The Russian economy is mainly dependent on fossil fuels, which account for 60% of its GDP. Climate change mitigation has implications for this economy. Russia’s main trading partners are China, EU, UK, and USA. Oil is its main export to the EU. Between 1996- 2021, Russia’s growth rate averaged 2.8%. Like other countries, their GDP declined to -3% in 2020 due to COVID restrictions. Of course, Russia is a nuclear power as are UK, USA and China. Russia is also a member of the BRICS (Brazil, Russia, India, China and South Africa) association.
Ukraine has a population of 42 million of which 34% are fully COVID vaccinated. COVID cases are also increasing. Ukraine’s GDP is US$156 billion. Growth was anaemic from the 2009 financial crisis, but began to improve in 2016 averaging 2.9% by 2019. It declined in 2020. Ukraine’s major trading partners are the EU, Russia and China.
Note that China has a major economic stake in this situation in Europe through its trade links.
For the opening of the Winter Olympics in Beijing, President Putin attended in-person and met with President Xi Jinping. Both are not NATO fans, but both have economic interest in Europe, and Russia needs to sell oil to everybody to keep its economy afloat. Or, would it make a deal with China?
Global economic interests are concerned that a shooting war in Europe will be detrimental to the global economy. They are seeing rising oil, transport and food prices exacerbating existing inflation and setting back recovery in the global economy, especially for developing countries.
In CARICOM, that is bad news for many of us, especially net oil and food importers. Major actors (USA, EU, China and Russia) in this drama are involved, to varying degrees, in CARICOM in terms of trade and economic cooperation. There is Russian interest in regional bauxite/alumina. Ukraine is less engaged, but there is some trade and cooperation with CARICOM countries, e.g. in education. Guyana and Belize will be mindful of their own border issues. One would expect the CARICOM Council of Foreign Ministers (COFCOR) to address this issue.
It seems to me that in this winter already of discontent, the last thing the world needs is another war, and one in Europe.
Let’s hope that behind the scenes in Beijing, President Xi took the Olympic spirit to heart and decided to play peace broker.
Submitted by Elizabeth Morgan, Specialist in International Trade Policy and International Politics