Russia-Ukraine War:

Impact On Bangladesh's
Economy

Presented by: Sams Saiyadena Zeesha

Tracking Number: 573538
 Table of Contents

1. The Russia-Ukraine War

6. Impact On Bangladesh's Economy
 Inflationary Pressure
2. Background  Foreign Trade Relations with Russia & Ukraine
 Financial Transactions & Infrastructure Development
 RMG Exports to EU

3. Motivation Behind the Invasion  Remittance Income & Expatriation

4. Present Condition of the War

7. Concluding Remarks
5. Reasons For Focusing On Eastern Ukraine
 The Donbas Region & The Crimean Peninsula
 Russian Identity Politics
Presentation in a Glance
The Russia-Ukraine War

Russia Invaded Ukraine On 24 February 2022.

Biggest Armed Conflict Between Two Countries In

Europe since the time of the 2nd World War.

"Protecting Safety, Development And The Existence Of

The Russian Nation."
Background

2nd Russian Revolution and Ukraine’s Independence.

Ukraine’s Political & Ideological Transformation

Ukraine rejected Russia’s supremacy and sought a path to

join the European Union and NATO
Motivation Behind the
Invasion
 Russia has been especially concerned about Ukraine joining
NATO and the European Union.

Ukraine shares many cultural similarities with Russia .

Putin argues that Ukraine unfairly inherited historic parts of

Russia during the demise of the Soviet Union.

Russia’s initial aim was to overrun Ukraine, depose It’s

Russia & Ukraine Government & end Ukraine’s desire to join the western defensive
alliance NATO
Present Condition of the War

• Russia scaled back its ambitions

• Pulled back from Kyiv and declared its
main goal was the “Liberation of Donbas"
• Now focused on seizing the two big
eastern regions- Luhansk & Donetsk
• Have claimed control of Kherson
• Marching towards seizing territory further
west along the Black Sea coast towards
Odesa and beyond
Reasons Why Russia Is Now
Focusing On Eastern Ukraine
The Donbas Region & The Crimean Peninsula
• Large portion of the population in the Donbas region are Russian
speaking sympathizers of Putin’s Administration

• Donbas - a heavily industrialized region known for its coal

mining industry and large coal reserves. Control of the region
would also enable Russia to create a “land bridge” to Crimea.

• The Crimean Peninsula is crucial for controlling both passages

into the Black sea and the Azov sea. Undisputed control over this
region will allow Russia to fortify, develop and control the major
naval base of Sevastopol and the economic port of
Novorossiysk.
Russian Identity Politics
• Ukraine’s westernization and fraternization with opposing western powers is a direct and significant blow
to the ideological beliefs and identity politics of the Russian administration.

• Invading and conquering Ukraine would allow Russia to regain territory that it considered to be rightfully
theirs.

• Annexing Ukraine spells a definitive victory of the Russian ideology over western powers.

• It will also influence, directly or indirectly, other previously Soviet Nations that have since gained
independence to follow the lead of Russia and its policies in the world stage.
Impact On Bangladesh's
Economy
Inflationary Pressure

Supply Disruptions And Financial Sanctions

• Major countries including the US, the UK and Japan, and the European Union (EU), have all
suspended economic ties with Russia.
• Sanctions have been enforced on Russian financial institutions to disrupt transactions with the
country.
• As Russia is the third largest oil-producing country in the world, the global economy is suffering from
high oil prices.
• High oil prices have a knock-on effect on other prices, leading to further inflationary pressure.
• Bangladesh can also feel the heat as commodity prices have skyrocketed.
Inflationary Pressure

Disrupting Bangladesh’s Food Economy

• Wheat is the second most important food crop in Bangladesh and it imports more than 80% of its wheat needs.
More than 50% of which is imported from Russia and Ukraine. With those sources now disrupted, Bangladesh
will have to find alternatives.
• Ukraine and Russia account for about 75% of world sunflower oil exports. While Bangladesh does not import
sunflower oil, the war has increased prices across the entire vegetable oil complex.
• Trade restrictions imposed by major vegetable oil exporters have also increased Bangladesh’s vulnerability as
Bangladesh imports almost all of its vegetable oil needs .
• Russia is combinedly the largest exporter of fertilizers alongside Belarus. Trade and export sanctions aimed at
Russia has severely impacted its exports of chemical fertilizers to Bangladesh. Which has led to an inflation in
fertilizer prices as well as a shortage of necessary fertilizers.
Foreign Trade Relations with Russia &
Ukraine
• During the last fiscal year, Bangladesh has exported a total of 665 million dollars worth of products to Russia and
total of 26 million dollars worth of products to Ukraine.

• This export earnings from these two countries have been severely reduced due to war time restrictions in Ukraine
and international trade sanctions imposed on Russia.

• Bangladesh had the opportunity of maintaining trade relationships with Russia through the medium of Chinese
intervention. This has also been reduced significantly after China was warned not to continue this type of trade
facilitation by NATO Nations like the US and the UK.
Financial Transactions & Infrastructure
Development

• Aside from these obstacles in conducting trade, the closure of SWIFT has led to backlogs in payments
from the Russian government.

• Russia is the main investor and development partner for Rooppur Nuclear Power Plant. The ongoing
war and economic sanctions against Russia could delay this expensive project, which means cost
escalation in Bangladesh. This implies higher loans and burden on the country.
 RMG Exports to EU

• In the future, there is a distinct possibility that if the Russia-Ukraine conflict spreads to other countries in
Europe, the RMG exports from Bangladesh will plummet significantly.

• Currently Bangladesh earns 64% of its total export income from European Union countries. The
purchasing ability of these countries have already seen a slight decline, resulting in reduced exports in the
past few months.
 Remittance Income & Expatriation

• Rising prices and supply disruption of oil and gas have forced many countries to reconsider their energy
supplies. This may result in a slow-down in expansionary projects. With the decline of expansion and
lower labor intake in the Middle Eastern countries, Malaysia, Bangladesh’s remittance income might also
stumble.

• As a consequence of escalation of this conflict, if the war spreads to European Union countries and if
other countries which are major sources of remittance for the Bangladesh get directly or indirectly involved
with this conflict, the growth of expatriation from Bangladesh to other countries will diminish alongside
a gradual decrease in remittance income.
 Concluding Remarks

It is clearly evident that the economic environment in Bangladesh has been significantly impacted due to the
Russia-Ukraine conflict. Many of the consequences of the war was unforeseen and there is a distinct possibility
that we might face this kind of unpredictable obstacles in the future. Thus it is prudent for the government and
non-government organizations involved in economic operations within the country to plan their future actions
accordingly.
Thank You