Impact on interlinked world

In our interdependent world, the Russia-Ukraine war has caused a ripple effect beyond Europe. One year after Russia’s invasion of Ukraine, African and Latin American countries, although on distant continents, continue to face the war’s economic aftershocks. New military collaboration has begun between European and some Indo-Pacific countries. Japan, Singapore, South Korea, Taiwan and Australia have joined the West in imposing sanctions against Russia. South Korea has exported arms to Poland; NATO wants Seoul to export weapons to Ukraine.

The immediate impact of Russia’s escalating war is in Europe, most of all in Ukraine itself, whose neighbouring countries have opened their doors to at least eight million refugees.

Now, European countries are more dependent than ever on the US and are increasing their defence spending to strengthen NATO. Poland, which was once a part of the Russian empire, will spend 4 per cent of the GDP on defence this year — a higher proportion than any NATO state before the war. Germany, which until last year was the largest buyer of Russian gas, is currently a major contributor of heavy weapons to Ukraine.

As the problems in arming Ukraine for a long war become obvious to NATO member-states, they are boosting their munitions output. The US is trying to strike a balance between giving military aid to Ukraine and avoiding an escalation which could draw NATO itself into the war.

The new configuration of the world order, which has emerged in Europe, could embolden China to challenge the balance of power in Asia and grab Taiwan if the US appears weak in Ukraine. Last December, Japan announced its biggest military build-up since World War II, amid mounting security concerns about China, North Korea and Russia. In a historic first, in January, Britain and Japan signed a defence agreement so that they could deploy their troops in both countries.

In Asia, as in Europe, the US and its allies are reinforcing military ties. The Philippines, a US ally since the 1950s, has given the US access to four more military bases, including one in Luzon, close to Taiwan, and in Palawan, nearest to the Spratly Islands in the South China Sea, where there are overlapping territorial claims by several countries, including China. Predictably, China has vowed to defend its sovereignty in territories that it claims have belonged to it since “ancient times”. Asia’s peace is under threat.

The geopolitical and economic fallout is global. More than Ukraine’s territorial integrity is at stake. In March 2022, Russia’s blockade of Ukrainian ports cut off Ukraine’s access to the Black Sea and the international waters beyond that. Consequently, both countries will fight for Crimea. Should Russia consolidate its hold over Crimea, it could threaten weaker countries having a Black Sea coast, including Georgia, Turkey, Bulgaria and Romania. The last three are NATO members, so a great escalation of the conflict could then be expected.

On the economic front, Russia’s blockade of Ukrainian ports and bombing of its wheat fields precipitated an international shortage of wheat, maize, sunflower oil and fertiliser, of which Russia and Ukraine were major exporters. Global prices soared, resulting in economic hardships, especially to developing countries.

Additionally, the politically and economically intertwined cap on Russian oil has prompted Moscow to cut oil production, leading to higher energy costs worldwide. While European countries have reduced energy imports from Russia, they are urgently trying to diversify supplies, and to buy LPG from the US, Qatar and Norway. But economic recovery for developing economies has become tough. Inflation reached double digits in 40 per cent of the African countries, where about 300 million people face hunger.

Russia’s influence in its ‘near abroad’ is shaky. Former Soviet republics in Central Asia have voted for the UN resolution condemning the annexation of four regions in eastern Ukraine. China, the trading partner of choice of Central Asian countries, has supported them on the principle of territorial integrity, and will prevail over a war-weakened Russia with the strongest economic and technological influence in the region.

Although Russia is the main arms seller to African countries, most of them voted against its annexation of eastern Ukraine. They could yet be won over by increased oil imports from Russia, and its use of the narrative of anti-West colonial struggles in Africa. Some African countries have been able to boost exports of agricultural products, especially fruits and vegetables, to the Russian food market to help fill the gap created after Moscow reduced food imports from EU countries to retaliate against western sanctions. But China has been the largest investor in Africa since 2010, and will continue to surpass a warring Russia on the economic front.

Russia and China remain anti-western strategic partners, but competition between them is evident in West Asia. Iran and Russia have sold each other weapons. China is cultivating Iran with a comprehensive strategic partnership and economic goodies because it needs a strong partner in West Asia.

China’s strengths and weaknesses are evident in the new geopolitical and economic crises. China is unhappy about the economic disruptions caused by Russia’s war. As the primary lender to low-income countries, China is concerned about the repayments owed to it by countries that have seen their economies battered by rising commodity prices.

However, as the West cut trade with Russia, China moved in and captured 70 per cent of the Russian market in the third quarter of 2022. It is now the largest source of Russia’s imports — especially of the semiconductors that Russia needs to manufacture both civilian and military equipment.

To disrupt China’s semiconductor industry, the US is tightening the screws in the hi-tech arena. The Netherlands and Japan — which produce some of the world’s key chip manufacturing technology — have agreed to tighten exports and restrict sales to China.

To India, the Russia-Ukraine war offers tough warnings about the dangers of having volatile borders with both China and Pakistan. Moreover, the reliability of Russian arms deliveries is questionable, with the Army Chief, General Manoj Pande, saying that India’s defence forces are “looking at alternative sources of supplies.”

Unfortunately, Russia’s spring offensive, Moscow’s intent to mobilise half a million more troops and reports of lethal Chinese arms exports to Russia indicate that a diplomatic solution is a distant prospect. But, against all odds, India, as the G20 president, should start clearing the road towards a negotiated peace to end Russia’s war in Ukraine.