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Mainstream, VOL 61 No 8, February 18, 2023

Will China Ultimately Benefit from Russia-Ukraine War? | M.R. Narayan Swamy

Friday 17 February 2023, by M R Narayan Swamy


President Vladimir Putin probably thought – or was led to believe – that Russian forces would make mincemeat of Ukraine in no time. Unfortunately for him, it has turned out to be almost like the Nazi invasion of the Soviet Union. At least the Germans made great advances before the Russian winter and infrastructure bottlenecks forced them to pull back. In comparison, the Russian military has had much less success.

As the first anniversary of the Russian blitzkrieg nears, Europe is wrapped in a terrible war it had not seen on its soil since World War II ended. The North Atlantic Treaty Organization (NATO) has suddenly become more vibrant – and relevant. Irrespective of whether Ukraine was being used by the West to extend NATO’s influence to the borders of Russia, it is now more or less certain that Kyiv will very much embrace the Western military alliance because Moscow cannot be trusted anymore. Putin is to blame for this.

Award-winning author Ajay Singh and other experts on military and strategic affairs have teamed up to understand the numerous aspects of the conflict. Their book, Russia-Ukraine War: The Conflict and its Global Impact (Pentagon Press), is meticulously researched.

As Ajay Singh rightly points out, no other war in recent times, not even the US invasions of Afghanistan and Iraq, has impacted the entire world in so many ways. This even though the fighting appears to have reached a stalemate. The economic damage to the two countries involved in the fighting is estimated to be around $600 billion. But energy and grain shortages have put half a billion people at risk of food scarcity and could plunge the world into a recession. Russia’s decision to cut off gas supplies in Europe as a tit-for-tat for Western sanctions has begun to take a toll in the continent. The war has already caused six million refugees, the largest number since World War II. Much of Ukraine now lies in ruins.

For Putin, who has always considered the break up of the Soviet Union a catastrophe, the steady expansion of NATO since then is a nightmare. In 1991, NATO’s boundaries stood along the German border. Since then, Poland, Hungary, the Czech Republic, Bulgaria, Romania, Estonia, Latvia and Lithuania have been co-opted in the alliance. When Estonia and Latvia joined in 2004, NATO’s borders touched Russia for the first time in its northern areas. Had Ukraine joined, NATO would have been at Russia’s doorstep.
But Putin’s military gamble has had the opposite effect of what he may have intended: now there is no way he can stop European countries from joining NATO. Even Sweden and Finland are seeking membership. More than that, the war has dealt a heavy blow to Russia’s military prestige. Moscow has been weakened economically, militarily and diminished in stature. Regaining all that will be well-nigh impossible. Diplomatically, even CIS countries which have traditionally been under Russian influence have exhibited neutrality in the conflict. Only Belarus, among all the former Soviet states, has allied with Russia.

Despite the coordinated Western sanctions, the Russian economy seems to have weathered the worst – although plenty of problems remain. Russia has more than made up its shortfall of energy sales to Europe by sending more oil and coal to India and China on much-sweetened terms. Until the sanctions were enforced, the European Union got 40 percent of its gas from Russia, earning for Moscow $850 million daily.

More important, Russia and Ukraine provide 27 percent of the world’s market for wheat, 16 percent of corns, 23 percent of barley and a whopping 53 percent of sunflower oil. There is no doubt that serious and further food shortages are bound to hit the world, and the worst affected will be the poor economies in the Third World. Putin, the book asserts, knows the impact the war has on global food situation. In just one year, the Food Price Index has shot up by around 30 percent, putting over 450 million people at a risk of food insecurity.

The economies of both Ukraine and Russia are going to be hard hit. Russia is spending over $1 billion a day on the military operation. It would have already burned more than $250 billion. This does not include the price it has paid due to Western sanctions. Ukraine’s economy has contracted by over a third. It will take at least $600 billion to rebuild the country. The human cost is incalculable.

The book says China stand to benefit from the US focus on Russia as enemy number one. While the US will be a gainer in the short term, its seizure of Russia’s dollar reserves – this is not the first Washington has thus acted — is bound to hasten the decline of the dollar as a universally acceptable currency. If that happens, China is well placed to emerge stronger once the conflict gets over. Already, Russia has moved close to China in more ways than one. China has proved to be Moscow’s economic and trade cushion. Moscow could slip swiftly into Beijing’s geostrategic orbit in the long run, even when the war gets over. Europe is not only divided over the dragging Russia-Ukraine war but remains economically wedded to China even though this is not to the liking of the US. Russia’s invasion of Ukraine has surely changed the world like perhaps no other event in recent history.

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