UKRAINE CRISIS

UKRAINE CRISIS

With Russian attacks focused on eastern Ukraine, the conflict has entered a new phase, eliciting varied responses globally, including hesitancy in Germany and concern in Taiwan regarding China.

Story So Far

• AA with EU: In 2013, Ukrainian President Viktor Yanukovich declined an EU association agreement, sparking pro-European protests. He was later impeached.
• Crimean annexation: In March 2014, Russia annexed Crimea, citing protection of Russian interests. The EU, USA, and others imposed sanctions.
• Pro-Russian separatists: Afterward, separatists in Donetsk and Luhansk declared independence, leading to heavy fighting.
• Minsk Protocol I: A 2014 peace plan included provisions for prisoner exchanges and withdrawal of heavy weapons but was violated by both sides.
• Minsk II agreement: Signed by Russia, Ukraine, and the Organisation for Security and Cooperation in Europe (OSCE) and the leaders of two pro-Russian separatist regions signed a 13-point agreement in February 2015 in Minsk. France, Germany, Ukraine, and Russia (the ‘Normandy Four’) agreed to a new ceasefire for the implementation of the agreements.

Reasons for the war

1. Political
   • NATO membership: Russia opposes Ukraine’s NATO membership, while Ukraine views it as essential, especially after Crimea’s annexation in 2014.
   • Marginalization of Russian identity: In 2019, Ukraine mandated Ukrainian as the official language for public sector workers, excluding Russian.
   • Failure of international institutions: Post-WWII institutions, like the UN, have collectively failed to mitigate tensions in the Euro-Asia region.
2. Economic
   • Integration with EU: Ukraine aims to integrate politically and economically with the EU, which Russia opposes.
   • Euromaidan Movement: Sparked by Ukraine suspending an EU association agreement, leaning toward Russia.
   • Eurasian Economic Community: Russia wants Ukraine in its free trade bloc to control Ukraine’s resources.

1. Geostrategic
   • Warm water port: Reunification with Russia ensures access to the Black Sea Fleet, crucial due to its winter-resilient location.
   • Boost to Russian Navy: Secures strategic naval access to the Mediterranean.
   • Importance of ports in Black Sea: NATO controls straits critical to Russia’s access to the Atlantic.

Response from World Nations

1. Europe and US
   • No boots-on-ground support: NATO countries provide sanctions, funds, and hardware instead of direct military support.
   • Sanctions: The UNSC, UNGA, and other bodies imposed sanctions on Russia.
   • Energy dependency: Europe depends on Russian gas, risking shortages if sanctions disrupt this supply.
   • Effect of COVID-19: Economic sanctions risk worsening Europe’s recovery from COVID-19.
   • Russia-China ‘axis’: Sanctions may push Russia closer to China, allowing them to counter the West.
2. Chinese Response

• Justified Russia: China rejected calling Russia’s moves on Ukraine an “invasion” and urged all sides to exercise restraint.
• Abstention: China abstained on a US-sponsored UNSC resolution condemning Russia’s “aggression” against Ukraine, along with the United Arab Emirates (UAE).

1. India

• Independent response: India has maintained a neutral response, prioritizing national interest and abstained from voting on resolutions.
• India’s principles: These include:
  • Immediate cessation of violence and hostilities
  • Return to dialogue and diplomacy
  • Global order anchored on law, UN Charter, respect for sovereignty of all states
  • Humanitarian access and assistance
  • Engaging with leadership of both Russia and Ukraine

• Humanitarian assistance: India provides aid without vilifying any side.
  • Example: India sent 90 tonnes of humanitarian aid to Ukraine.
• Strategic autonomy: India emphasizes maintaining autonomy to reach peaceful resolutions during global crises.

Effects on India

1. Diplomatic

• Balance between Russia and US: India seeks strategic autonomy to avoid becoming embroiled in big power rivalries.
• Emerging differences: Ukraine crisis adds strain in India’s relationship with the West.
  • India vs EU and UK: EU and UK have cordial relations with India on trade, climate, and Indo-Pacific, but differ on Ukraine.
  • India-USA: USA wants to distance India from Russia on defense and oil.

2. Military

• Arms trade with Russia: Russia remains India’s major arms supplier. US threats of CAATSA sanctions remain.
  • SIPRI data: Russia accounted for 46% of India’s arms imports in 2017-21.
• S-400 delivery and US waiver: India’s S-400 missile purchase could face complications from US sanctions.

3. Strategic

• World War scenario: Conflict between US/Europe and Russia would impact India economically and require it to take a stance.
• Moves focus from China: The crisis diverts global attention from China to Russia, impacting Indo-Pacific strategy.
• Brings Russia-China closer: The crisis strengthens Russia-China relations, creating a bloc that India is not part of.

4. Economic

• India’s Investment in Russia: India’s plans in Russia’s energy sector and in the development of its Far East could be problematic due to potential sanctions.
  • Example: Sanctions could exclude Russia from the SWIFT payments system.

• Gas Prices: Gas prices have increased over 50% this year, impacting India’s import bill and current account deficit.
• Oil Prices: Sanctions pushed oil prices above $100 per barrel, significantly raising India’s import costs.
• Agriculture: New export opportunities for Indian wheat emerged, but fertilizer and sunflower oil imports from Ukraine have been affected.
• Metals: Russia, a key producer of metals like Titanium and Palladium, affects India’s semiconductor and automobile industries due to supply disruptions.
• Flight of Capital: Foreign investors have sold holdings in Indian equities over recent months.
• Export Concerns: Russia and Ukraine are major export destinations for India’s pharmaceutical industry; Russia also accounts for 18% of India’s tea exports.

Global Challenges

1. Diplomatic

• Deteriorating Relations with USA: Conflict risks further deterioration in U.S.-Russia relations.
• Shift NATO’s Focus: The crisis may refocus NATO on protecting Europe, away from challenges posed by China.
• Global Peace: The conflict complicates cooperation on global issues like terrorism and arms control.
• Imposed Sanctions: Sanctions on Russia could escalate, including blocking gas supply through Nord Stream 2.

2. Economic

• Energy Crisis: Europe worries about Russia cutting gas and oil supplies.
• Oil Surge: Brent crude surpassed $104 a barrel after sanctions on Russia.
• Agriculture: Russia and Ukraine are major suppliers of global fertilizers, impacting agriculture worldwide.
• Stock Market Crisis: U.S. and EU sanctions caused a stock market freeze in Russia.
• Bank Run: Sanctions freezing Russia’s central bank assets limit its ability to support domestic banks.

• Consumer goods shortage: Measures would hurt middle-class Russians, who rely heavily on the West for consumer goods.
• Shortages of essential metals: The price of palladium, crucial for automotive and mobile phones, is soaring. Russia, the world’s largest exporter, may be cut off from global markets.
• Financial turmoil: Sanctions aim to restrict Russia’s access to capital, impacting its ability to process payments in essential currencies.

3. Regional challenges

• Europe: Relations may pivot to Africa and Asia-Pacific to reduce reliance on Russian oil and other resources.
• Caucasus and Central Asia: Russia-Ukraine conflict impacts trade.
  • Example: Five Central Asian countries face maritime access issues due to naval mines in the Black Sea.
• Western Hemisphere: High oil prices threaten stability in Central America and the Caribbean, while exporters like Brazil and Chile may mitigate impacts.
• Sub-Saharan Africa: Increased socio-economic pressures from reliance on Russian and Ukrainian wheat.
• Middle East and North Africa: Rising food prices create risk of political instability, similar to the Arab Spring.
  • Example: Egypt imports 80% of its wheat from Ukraine.
• Indo-Pacific: Rising Chinese aggression (e.g., Taiwan) threatens regional stability.

Way Forward

• Handle Financial Volatility: Address inflation, trade costs, and supply chain disruptions.
• Overcome social impacts: Improve overall prosperity for geopolitical strength.
• Reduce dependence: Advance self-reliance (Atmanirbhar Bharat).
• End Cold War Mentality: Engage with stakeholders to strengthen global institutions.
• Build upon the UN Charter: Support sovereignty and legal order.