Neil Bryan DC.

Ramos March 10, 2022

4APL POLSELEC02

PUTIN VS ZELESKYY: GLOBAL ECONOMIC IMPLICATIONS OF THE RUSSIA-

UKRAINE WAR

Introduction

The invasion of Russia in Ukraine created an international uproar, where some people
even so far calling it a pretense for “World War III”. The invasion of Russia in Ukraine will not
only have consequences in the economy of the two nations that are currently in conflict with
one another, but the effects of this conflict will also be experience in different parts of Europe,
Asia, America, or in this case the global economy. The Russian government suggestively
ignores all economic threats when the head of the Russian Government, Vladimir Putin orders
an invasion in Ukraine. Western countries have imposed strong economic sanctions in Russia as
their demonstration of condemnation in Putin’s recent actions against Ukraine. This paper will
examine the significant events leading up to the Russia’s invasion of Ukraine and provides an
analyzation on just how Vladimir Putin's decision to invade Ukraine is considered to be his
biggest "economic mistake."

The Historical Background of Ukraine-Russian Conflict

To be able to understand what is happening on both nations, key historical events must be
established to determine the root cause of Russia’s invasion on Ukraine. The two nations were
once bounded together by the Soviet Union in 1922. However, since the fall of the USSR in 1911,
Ukraine quickly transitions to an independent sovereign state, which leads to Ukraine adopting
democratic and liberal practices.

The tensions between the two nations further grew in 2014, where a series of violent
protests in Ukraine has emerge, the protest began when there is a sudden change of Political
directions leaning to the national interest of the Russian Government. This major event has
opted former president Yanukovych to flee to Russia and being ousted as the President of
Ukraine (Fitzgerald, 2022). In the early spring of 2014, following the violent collapse of
President Viktor Yanukovych government, Moscow has begun invading and seizing several
government owned buildings in eastern Ukraine which leads to thousands of human causalities
in the process (Mykhnenko, 2020). In 2015, a Cease-fire agreement between Moscow and Kyiv
was signed offering a path of diplomatic counter piece that tends to end the conflict between the
two nations. However, the deal was ambiguous which created a major blockage between the
two countries. Hence, Moscow and Kyiv interpreted the pact differently that leads to an event
dubbed as the “Minsk Conundrum” (Aljazeera, 2022).

The peace talks between the two nations was never successful in 2015, and with the
surprising conclusion of the 2019 election in Ukraine, it has led to a new leadership which is
governed by the newly elected President Volodymy Zelensky, albeit Zelensky was a former
comedian, his actions was far from being a joke. Under the administration of Zelensky, Ukraine
has begun to conduct meetings with several western powers and various international
organizations like the European Union (EU) and North Atlantic Treaty Organization (NATO) in
hopes that Ukraine will be part of both international organizations (Faiola, 2022). However,
Putin has demanded NATO that Ukraine must never be admitted to NATO (Fitzgerald, 2022).
The request of “security guarantees” was rejected by President Joe Biden himself.

A full-scale invasion of Russia in Ukraine has begun on February 24, 2022, the said invasion
was severe that even Putin himself threatens the West with “consequences greater than any you
have faced in history” if the west intervenes in his invasion of Ukraine (Jankowicz, 2022).
Following the Russian invasion in Ukraine, it has created an international backlash in Russia,
whereas various western countries has immediately put place economic sanctions which will
drastically hurt Russia and its people. Aside from the economic sanctions that has been put into
place, Ukraine President Volodymyr Zelensky has no intentions in stepping down and let
Russia invade his country, telling his people to “fight for the country” (Delhi, 2022). The
consequences or the conclusion of the current conflict between these two nations is yet to be
seen, but the economic consequence in Russia is now being experienced by its people.

Putin’s Biggest Economic Mistake

Western powers have put place strong economic sanctions on Russia. Although sanctions
will weaken and hurt Russia, since Russia has an advance economy, the sanctions that is
currently put into place will unlikely end the current conflict (Khalil, 2022). But we must put
consideration the effects of foreign countries economic sanctions in Russia.
 The head of the Russia’s central bank, Elvira Nabiullana, has announced to her nation that
the Sanctions imposed by foreign states in Russia have created an increase in the ruble exchange
rate and limit the opportunities for Russia to use its gold and foreign currency reserves
(Rosalsky, 2022). The Russian Economy will expect to have plunge into deeper recession
creating inflation all over the country, economist argues that the said measurements of USA,
EU, UK, and other notable allies in placing harsh sanctions on Russian banks, Russian
companies, and Russian oligarchs will have a severe economic impact on financial markets in
Moscow (Partington, 2022). It is expected, if Putin continues this conflict, economists forecasted
that the Russian’s Gross Domestic Product (GDP) will decline by 7% within months (Sachs,
2022)

Aside from internal economic consequence, the conflict will also have global economic
implications, According to Twin (2022) Russia is accounted for 10.53% of global oil and
petroleum exports. Oil and petroleum productions in Russia accounts for 11% of global oil
productions. Should the recent oil and gas prices will increase, it is forecasted that there will be
a higher global inflation rates that will happen across the world (Partington, 2022).

CONCLUSION

Should there be another world war, we should ask ourselves do we ever learn from history?
The conflict between Russia and Ukraine shows a severe economic implication that the world is
now experiencing. Today, the Russian economy is relatively stagnant. However, even if
sanctions have been put into place by foreign states it will not end the conflict between the two
nations. The most logical way to end this kind of conflict is through a series of diplomatic
missions that can ensure peace between Zelensky and Putin. Perhaps, Putin’s greatest economic
mistake is that he miscalculated the global economic cost of invading Ukraine, as petroleum and
oil prices continue to rise it will create a chain reaction that will increase the global inflation
rate.
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