By Nantoo Banerjee
The Russia-Ukraine war will complete a full year on February 23, this year. And, there is no sign of the war coming to an end any time soon. In fact, the armed conflict between the two East European neighbours is becoming deadlier by day. As of January 29, this year, the UN Office of High Commissioner for Human Rights verified a total of 7,110 civilian deaths. Of them, 438 were children. Furthermore, 11,547 people were reported to have been injured. However, the UN agency specified that the real numbers could be higher. The world’s richest countries are continuing to fuel the Russia-Ukraine war by endlessly supplying military and economic aids to Ukraine to fight the war on their behalf even at the cost of their respective economies. Going by the official statements of donor countries and media reports, foreign aid received by Ukraine since February 24, last year, when the war started, is over $150 billion. Ukraine received over $48.5 billion in military assistance from the West, which, according to TASS calculations, is almost equal to Russia’s 2022 defence budget. The military and financial involvement of some of the global rich nations in support of Ukraine’s war with Russia gives it a colour of a war between NATO and Russia. Ukraine is being used merely as a launch pad or pawn.
The war has impacted the economy of the entire world. Barring Saudi Arabia and India, almost all other global economies witnessed poor economic growth in 2022. An estimate by the Organisation for Economic Co-operation and Development (OECD) shows that Saudi Arabia’s GDP growth in 2022 was around 10 percent and India’s was seven percent. Turkey and Indonesia’s GDP were around five percent each. Almost the rest of the world suffered a lower GDP growth in 2022. China’s GDP growth was below five percent. The economies of the United States, the biggest arms and fund provider to Ukraine, and Germany grew by around 2.5 percent. The OECD economic forecast for all major countries, including India, in 2023 looks depressive. Among the major countries, only India may reach a six percent GDP growth in 2023. All other countries, including Saudi Arabia and China, may show GDP growth upto five percent.
The punishing economic impact of the Russia-Ukraine war on the world, coming soon after the effect of the coronavirus-led pandemic on the global economy, seems to have little influence on the aggressive postures by the West to fuel the conflict. The military and financial aids are constantly pouring into Ukraine from NATO countries to force Kyiv to hold fort. The total foreign aid to Ukraine to fight the war would be over three times the country’s annual defence budget. OECD’s recent Economic Outlook said the war is creating “serious headwinds for the global economy.” The global economy is expected to further slow down in 2023 and 2024 as the massive energy shock triggered by the war continues to spur inflationary pressures, sapping confidence and household purchasing power and increasing risks worldwide. OECD projected that the global economy would grow well below the outcomes expected before the war – at a modest 3.1 percent in 2022, before slowing to 2.2 percent in 2023 and recovering moderately to a still sub-par 2.7 percent pace in 2024.
OECD had said that GDP growth in 2023 is strongly dependent on the major Asian emerging market economies, which will account for close to three-quarters of global GDP growth, with the US and Europe decelerating sharply. Persistent inflation, high energy prices, weak real household income growth, falling confidence and tighter financial conditions are all expected to curtail growth. Higher interest rates, while necessary to moderate inflation, will increase financial challenges for both households and corporate borrowers. In a similar report earlier, the World Bank’s Economic Update for the Europe and Central Asia region said the ongoing war in Ukraine has dimmed prospects of a post-pandemic economic recovery for emerging and developing economies.
The World Bank report said economic activity will remain deeply depressed through 2023, with minimal growth of 0.3 percent expected during the year, as energy price shocks continue to impact the region. Regional output is expected to contract by 0.2 percent in 2022, reflecting above expectation growth in some of the region’s largest economies and the prudent extension of pandemic-era stimulus programmes by some governments. Ukraine’s economy was projected to contract by 35 percent in 2022. Its economic activity is scarred by the destruction of productive capacity, damage to agricultural land, and reduced labour supply as more than 14 million people are estimated to have been displaced. According to World Bank estimates, recovery and reconstruction needs across social, productive, and infrastructure sectors total at least $349 billion, which is more than 1.5 times the size of Ukraine’s pre-war economy in 2021.
While these reports are quite alarming in terms of the impact of the on-going Russia-Ukraine war on the global economy in general and, in particular, those western countries continuously providing aids to Ukraine to fight Russia, there is absolutely no effort on the part of NATO to bring the two belligerent parties together on a discussion table to find a workable solution to the problem leading to the armed conflict. Western powers are continuously aiding and instigating Ukraine to fight Russia. More than 30 countries have supplied military equipment to Ukraine since the war broke out nearly a year ago.The supplies include tanks, advanced M777 Howitzers, missile systems, including Patriot, S-300 air defence system, Starstreak missiles, long range rockets such as M142 High Mobility Artillery Rocket System or Himars, single shot anti-tank Nlaw weapons and drones. Lately, Turkey has sold a good number of Bayraktar TB2 armed drones to Ukraine.
Clearly, NATO wants the war to continue until Russia withdraws. That will pave the way for Ukraine to become a NATO member allowing a massive NATO build up in Ukraine across the Russian border. Only a diplomatic assurance from Ukraine of its neutrality can end the war almost immediately. But the US-led NATO would not let it happen. On February 21, Russian President Vladimir Putin had emphasised in a speech that Russia accepts “the new geopolitical reality that took shape after the dissolution of the USSR.” This was also mentioned earlier by Putin in an article on July 12, 2021. Putin reiterated the point for a third time on February 24, before attacking Ukraine, saying that “it is not our plan to occupy Ukrainian territory” and made it clear that he respected Ukrainian sovereignty, but only up to a point: “Russia cannot feel safe, develop, and exist while facing a permanent threat from the territory of today’s Ukraine.” As the situation stands now, NATO, not Ukraine, is in total control and the war is unlikely to stop soon even at the risks of further global economic slowdown, diminishing trend of global currency hegemony by US Dollars and Euros, and a possible nuclear strike. (IPA Service)