Russia-Ukraine War

Written by Afifa Iqbal 11:50 am Articles, Current Affairs, International Relations, Published Content

The Russia-Ukraine War: Putin, Zelensky & the Economic Impacts

The statements of Russia’s Vladimir Putin and Ukraine’s Volodymyr Zelensky, before the Russia-Ukraine war officially started, offer an insight into the reasons and motivation behind the war. The author, Afifa Iqbal, notes that whatever the causes may be, the Russia-Ukraine war is bound to have severe economic implications for the parties involved, and for the world’s energy-dependent states, namely Pakistan. She asserts that the imposition of harsher sanctions on a petrostate like Russia will have far-reaching effects, one of which will be the surge in global oil prices.
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About the Author(s)
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Ms Afifa Iqbal has a keen interest in identity politics, colonialism and post-colonial development. She is currently working as a Research Assistant at ITU while pursuing her postgraduate studies in Development, Technology and Policy. She is a Gold Medalist in Political Science from the University of Punjab.

Presidential Addresses & the Russia-Ukraine War

On February 24, 2022, Russia invaded Ukraine under the pretense of national security. Statista reports that during the war on Ukraine, Moscow has reportedly attacked multiple Ukrainian cities—Kyiv, Berdyansk, Chernihiv, Kharkiv, Odesa, and Sumy—resulting in the deaths of 816 civilians and more than three million refugees.

There are multiple sources and analyses that can be used to examine the unfortunate Russia-Ukraine conflict. However, no source can bring one any closer to the real motivation and reasons that culminated in the Russo-Ukrainian war than the speeches of the leaders who are at the helm of power, calling all the shots. Consequently, these addresses also offer a vantage point for understanding the economic impact of the war.

These are the words of Vladimir Putin, a state leader who was about to launch an offensive against his neighboring state, on February 24, 2022:

“Today, I again consider it necessary to come back to the tragic events taking place in the Donbas and the key issue of ensuring Russian security…those fundamental threats against our country that…are offensively and unceremoniously created by irresponsible politicians in the West…I am referring to the expansion of NATO to the east, moving its military infrastructure closer to Russian borders.

“It is well known that for 30 years we have persistently and patiently tried to reach an agreement with the leading NATO countries on the principles of equal and inviolable security in Europe. In response to our proposals, we constantly faced either cynical deception and lies or attempts to pressure and blackmail, while NATO, despite all our protests and concerns, continued to steadily expand. The war machine is moving and, I repeat, it is coming close to our borders.”

And in the spirit of comparison, these are the words of Volodymyr Zelensky—a state leader whose state is about to be attacked—on February 23, 2022:

“The war is a big disaster, and this disaster has a high price…They told you that Ukraine is posing a threat to Russia. It was not the case in the past, not in the present, it’s not going to be in the future. You are demanding security guarantees from NATO, but we also demand security guarantees. Security for Ukraine from you, from Russia, and other guarantees of the Budapest memorandum.”

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Anyone who compares the addresses of both the presidents will realize some key differences vis-à-vis language employed to justify/set the course of their actions. The language used by the Russian president signals a stern posture to assuage the historical grievances and neutralize threats to Russia’s security, come hell or high waters.

The Ukrainian president, on the other hand, made an emotional appeal – not to the Russian president but to the Russian people. He talked about the costs of war, both economic and emotional, and called upon Russia to honor international agreements. He is trying his best to avert a potential invasion and protect his people.

Putting the Russia-Ukraine War in Context

The Russian conflict with Ukraine may have been between two parties; however, there is a third party (or parties per se) that has not only played a key role in the precipitation of the crisis but will also influence the outcome and economic impact of the war—the West. Before giving an account of the two warring states, it is pertinent to understand this third party.

It is important to note that the term “West” is used in the sense of a set of ideas and ideologies that are embedded in the socio-political structures of certain states located largely in Western and Northern Europe, and North America. Driven by their expansionist and colonial ideologies, these states have had multiple incidents of conflicts with Tsarist Russia and later on, the Soviet Union.

Even when a few of these states had to strategically align and support Russia, there was an air of deep distrust. Fast forwarding, the developments of the two world wars and the Cold War between the USSR and the West epitomizes the irreconcilable ideological and strategic differences between the West and the Soviet Union.

After the Cold War ended and the so-called iron curtain was lifted, the West got caught up in triumphalism. Francis Fukuyama’s declaration in “The End of History and the Last Man Standing” was taken a bit too literally by the West, and it sort of repeated the same mistakes it made with Germany in the Treaty of Versailles, albeit to a lesser extent.

The use of evocative terms highlighting the fall of the USSR by the mass media and mainstream academia instilled deep-seated insecurity within the Russian state. In fact, one of the relics of the Cold War, the North Atlantic Treaty Organization (NATO), still continues to be a thorn in the Russian toe and was cited as one of the main reasons for invasion by Putin. 

Now coming to the present-day Russia-Ukraine war, Putin is citing security threats to the Russian state—as is evident by his address—as the main reason for this invasion. And the pro-West tendencies of Volodymyr Zelensky are not helping anyone. This does not mean that Putin’s invasion of a peaceful neighboring state is justified, but that Zelensky and the Western states could have adopted a better and historically considerate course of action to lessen the extent of the crisis and the invasion.

Economic Impacts

The economic impact of Putin’s war on Ukraine is largely political when it comes to Russia. The economic sanctions imposed on Russia by Western politicians will determine the disruptions in the supply of Brent crude oil and other exports by Russia. While as far as Ukraine is concerned, the extent of the damage caused by the Russian strikes on its infrastructure and agricultural land, will determine the disruptions in the supply of wheat, sunflower oil, and other exports. Before moving forward, for the sake of nuance, a quick preview of both the economies can help in understanding the stakes involved.

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Russian Economy and Exports

After the fall of the Soviet Union, the Russian economy underwent some radical reforms. Encyclopedia Britannica outlines these reforms as:

“Major components of the reforms included establishing privately owned industrial and commercial ventures (using both foreign and Russian investment) and privatizing state-owned enterprises. To encourage privatization, the government issued vouchers to Russian citizens that enabled them to purchase shares in privatized firms, though in practice these vouchers frequently were sold for cash and were accumulated by entrepreneurs. A commodity and stock exchange system was also established.”

Today, the Russian economy can broadly be categorized as a mixed economy. It has adopted some features of the market economy while retaining certain features of a planned economy. As far as the nature of the Russian economy is concerned, it can be regarded as a “petrostate” because it relies heavily on energy exports, and is often framed as an “energy superpower.”

According to the 2020 report of the EIA (Energy Information Administration), Russia is the 2nd largest producer of dry natural gas, 2nd largest holder of recoverable coal, and 3rd largest producer of petroleum and other liquids. The report also states that Europe is the biggest beneficiary of Russian oil and gas exports, and relies heavily on them.  

With the completion of Nord Stream 2 and Turkstream, the reliance of Germany and Turkey on Russian natural gas can be expected to increase even more. Aside from energy exports, Russia is also one of the major exporters of wheat and sunflower oil.

Ukrainian Economy and Exports

Ukraine’s economy was an integral part of the Soviet economy. After the fall of the Soviet Union, the Ukrainian economy was severely constrained. Encyclopedia Britannica sketches the daily struggles of the Ukrainians in those times as:

“Daily life in Ukraine became a struggle, particularly for those living on fixed incomes, as prices rose sharply. Citizens compensated in a number of ways: more than half grew their own food, workers often held two or three jobs, and many acquired basic necessities through a flourishing barter economy.”

The economy stabilized a bit in 1996 and started to pick up pace in the early 2000s, partly due to increased ties with Russia. However, after the developments of 2014 that toppled the government of pro-Russian President Viktor Yanukovych, the political crisis began that culminated in the recent invasion.

One important bit to remember is that Ukraine’s economy is energy-intensive and the state serves as a major transit for the supply of Russian oil and gas. Moreover, it is a major exporter of wheat and sunflower oil. Both of these aspects have made the Ukrainian economy heavily dependent upon, and vulnerable to, the war between Russia and Ukraine. 

Economic Fall-out of the War Between Russia and Ukraine

In response to the war between Russia and Ukraine, the European Union (EU) and the US have operationalized a regime of economic sanctions against Russia since 2014. On the other hand, among the QUAD member states, India has decided to adopt a neutral approach to the war and refused to sanction or condemn Russia openly. According to the EIA report, the sanctions impact the “Russian energy companies’ access to the US capital markets and to goods, services, and technology in support of deepwater exploration and field development.”

The aforementioned economic sanctions have been intensified after the Russian invasion of Ukraine. According to a JP Morgan report, “So large is the immediate supply shock that we believe prices need to increase to $120/bbl and stay there for months.” In case Russia reduces its energy exports, the Brent oil price could average at $115 per barrel in the second quarter of 2022, $105 per barrel in the third quarter of 2022, and $95 per barrel in the fourth quarter of 2022.

Impact on Pakistan

In both cases, the impact on food and transportation prices is going to pressurize the already struggling and cash-strapped economies of the states like Pakistan which are still reeling from the impact of the global pandemic. To add to the economic woes of the aforementioned states, the disruptions in the shipping and transportation – particularly of grains – from the Black Sea region due to the ongoing Russia-Ukraine war will further add to the prices of fuel and food commodities.

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Many domestic publications and analysts are of the view that the ongoing conflict will adversely impact Pakistan’s economy. Since Pakistan is a major importer of Ukrainian wheat, the disruption in its supply could further aggravate the food insecurity in Pakistan. This is a particularly sensitive matter since it exposes the fault lines in the food production and food supply of Pakistan.

Moreover, the consequent shortage of food and rise in the prices of food commodities can be potentially devastating considering the stunting rate of children in Pakistan, which is around 38%. At a macro-level, the rising food and energy prices can increase the current account deficit and slow down economic growth. In a politically chaotic climate like that of Pakistan, these developments have the potential of deepening the ongoing political crisis in the state. Reports have also emerged that amid the deepening ties between Pakistan and Russia, PM Imran Khan visited Russia to sign trade agreements that would help Pakistan get access to cheaper wheat, natural gas, and other resources – but thanks to Khan’s ouster and Russia’s conflict with Ukraine, even the status of those agreements are unclear.


The excerpts from the addresses of both the presidents make their thought processes and motivations crystal clear. But it goes without saying that Putin of Russia could have chosen a smart strategy to minimize the security risks, Zelensky of Ukraine could have adopted a balanced strategy vis-à-vis Russia and the West, and Biden and Johnson of the West could have realized that their ideology-driven and provocative otherization of Russia can escalate tensions in the region and provoke Putin.

In other words, the balanced pursuit of interests in the international arena could have saved us all from the trauma and scourge that war is. But the blind pursuit of interests that reeks of Hobbesian bellum omnium contra omnes has led us to this day when a state is invading another state under the pretense of security, and the state under attack is calling on those states to help whose antagonizing and ideology-driven actions have instilled this insecurity in the former. This is the true example of what Oscar Wilde described as “the unspeakable in pursuit of the uneatable.”

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The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of Paradigm Shift.

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