• Sunday, July 14, 2024
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Why Russia-Ukraine crisis will not lead to World War 3

How Russia-Ukraine war affected Nigeria’s economy

During the early hours of Thursday, Vladimir Putin, the Russian president, announced on television that he had decided “to carry out a special military operation” in Ukraine. Shortly afterwards, explosions were reported across the country but this is unlikely to devolve into World War lll as some have feared.

An analysis of the previous World Wars indicates that some of the precipitators of a global conflict are missing in this instance, even if the mad impulses that drove the world into a global warfare are still animating the hearts of men decades later.

Analysts cite the restraint of global powers employing sanctions rather than retaliatory action, the influence of NATO, the major powers’ capacity to cause nuclear destruction and the economic consequence of a global war as possible restraints.

“In the realm of possibility, there could be a miscalculation on the part of the actors that could lead to a broader war. You may not have a world war, but it could lead to Europe and interested parties engaged in prolonged skirmish,” notes Onyekachi Adekoya, a fellow of Nigeria Institute of Industrial Security.

“But really nobody wants war,” he says.

Unlike the last world war, the major powers are not rousing their parliaments to declare war on the aggressor.

Following Hitler’s invasion of Poland in September 1939, Great Britain and France declared war on Germany. Both countries have earlier signed a pact guaranteeing military support to Poland. Even then, before Hitler could invade Poland, it had to make sure Russia would stay out of the fray, offering Russia a piece of Poland.

In this case, the United States, France, Germany, and Britain have not risen to defend Ukraine, they are offering cash and weapons while running out of ideas on new sanctions for Russia.

The economic sanctions are designed to hurt. It is targeting financial institutions, members of Russia’s governments and political class, assets and even the Nord Stream II gas pipeline. These include travel restrictions, asset freezes, constraining ability to access financial markets in the West and trade restrictions.

However, Russia has a buffer of $630 billion in foreign reserves, huge reserves of oil and gas, access to the Chinese market, the world’s second-largest economy, and is still selling weapons to India. Russia may yet be inured to the effect of sanctions.

Besides, “Putin is banking on sanctions equally affecting Western countries even more than it affects Russia,” says Eyo Ekpo, a former commissioner for NERC and global affairs commentator.

Some say Putin’s nostalgia for a new Soviet Empire is driving this incursion into Ukraine. Kurt Volker, former US representative for Ukraine negotiations, notes in an article for the Centre for European Policy Analysis (CEPA) that within 21 years in office, Putin has rebuilt the Russian military, modernised and expanded Russia’s nuclear arsenal, revived and expanded Russian intelligence services and activities, took control of Russian media outlets, consolidated state industries, and crippled political opposition to his United Russia party and made elections easily rigged.

Ekpo says Russia has been preparing for this for the past 20 years. He studied the behaviour of Western leaders very well and waited for until the only person that could stand up to him – Angela Markel – left the scene before he moved on to Ukraine.

Prior to the collapse of the Soviet Union in 1991, the Union stretched from the Baltic and Black seas to the Pacific Ocean and, in its final years, consisted of 15 Soviet Socialist Republics.

December 2021 makes it 30 years since the Soviet Union was dissolved and President Putin still bears a grudge. He once described that as “the greatest geopolitical tragedy of the 20th Century.” He is deeply resentful that the Cold War ended with Moscow losing territory, influence, and an empire.

But Adekoya says the issues are more nuanced. Putin does not seek to occupy Ukraine. “The gambit may be to control the Black Sea as indicated by the regions it has carved out of Ukraine – Donetsk and Lugansk, and it does not want NATO on its door much like the US would not want Mexico in a military alliance with Russia,” he states.

Ikemesit Effiong, head of research at SBM Intelligence, an African-focused geopolitical risk firm, also says, “Room for escalation does exist considering the heightened interest of great powers in this crisis, but at this time, we are some ways off from a global conflict.”

Russia is unlikely to plunge head-on into a conflict with NATO. NATO is an intergovernmental military alliance between 28 European countries and two North American countries. Formed after the Second World War in 1949, its central role is to keep global peace, as members agree to come to one another’s aid in the event of an armed attack against any other member state.

Seven former communist countries who were part of the Soviet Union or under its influence including Estonia, Latvia and Lithuania, Bulgaria, Romania and Slovakia and Slovenia, formerly a part of the former Yugoslavia, are NATO members. An attack on any of them by Russia will drag the United States, Britain, Canada, France, Germany, and the rest of NATO into war with Russia.

Countries on the Russian flanks Czech Republic, Hungary, Poland, Bulgaria, Romania, Slovakia, and Albania are all NATO members and Russia would need their cooperation to wage a massive war.

Read also: Nigeria’s N898bn wheat imports at risk as Russia-Ukraine conflict escalates

Analysts say there may still be a possibility. “The Russian propaganda machine has also worked hard for decades to make Western citizens fear body bags coming home and can even be prepared to bring down their governments when their soldiers start dying,” Ekpo notes.

This presents dire implications for the world’s economy including Nigeria’s. Africa’s biggest oil producer would shed the gains from surging oil prices paying petrol subsidy, and many economies that trade with the countries taking a side in the conflict may experience challenges as supply chain issues could worsen.

December 2022 would have been the 100th anniversary of the Soviet Union, and Putin sees this as his best chance to rebuild the fallen empire.

America is weakened at home and Europe is vulnerable to energy crisis that may precipitate the shutting out of Russia’s energy supply.

“I am not sure a war pays anyone, especially over a matter that can potentially be resolved in a few minutes,” says Zeal Arakaiwe, a Lagos-based financial advisor.