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West is driving the world into poverty The Statesman 10 May 2022
TS Tirumuti, India’s permanent representative to the UN stated at the UNSC, last week, ‘The conflict (in Ukraine) is having a destabilizing effect with broader regional and global implications. Oil prices are skyrocketing and there is a shortage of food grains and fertilizers. This has had a disproportionate impact on the Global South and developing countries.’ India continues to demand ‘cessation of hostilities and pursuing a path of dialogue and diplomacy.’
The Russo-Ukraine war has been ongoing for ten weeks. While Russian armed forces suffer losses, Ukraine faces unprecedented destruction of its cities. It has lost control of its Southern region giving Russia road connectivity to Crimea, while battles rage in the East, which is primarily Russian speaking and mineral rich. The west continues to back Ukraine with weapons and equipment while imposing sanctions on Russia. Russia has begun targeting Ukrainian bases where western weapons are being delivered, sending a message that these actions are unacceptable.
The west has realized, rather late, that its sanctions on Russia have had limited impact. Europe’s oil procurements of approximately 3-3.5 billion barrels a day was providing Moscow USD 450 million daily. It is now considering banning Russian oil from flowing into Europe over the next six months. However landlocked nations like Hungary and Slovakia would have a longer period to arrange alternate supplies. Czech Republic and Bulgaria are placing similar demands, making consensus difficult.
Russia, on the other hand, has been working to divide the EU. It temporarily halted oil flows into Poland and Bulgaria, pushing European unity to the limit. There are already reports of few landlocked nations willing to pay for Russian oil in Roubles. There is no mention of the EU considering stopping gas flows from Russia, for which Europe pays USD 400 million daily. The West’s plan to degrade the Russian economy appears to falter. The Russian Rouble, backed by gold, stands at a steady 68 to a dollar.
The EU, UK and the US are now pushing their companies from stopping services including insurance for ships carrying Russian oil. Ship insurance is largely controlled by European companies. This will impact movement of Russian oil, except where pipelines exist. Russia has been warning the west that attempts to ban its energy exports will hit global oil prices. Already oil prices have touched USD 109 per barrel.
PM Modi had rightly stated in Europe that there are no winners in this war. He mentioned, ‘We believe that there will be no winner in this war, and all will suffer losses. Therefore, we are on the side of peace.’ PM Modi added that apart from rising oil prices there is global shortage of food grains and fertilizers. He stated, ‘Every family in the world is feeling the pain but the impact will be on poor and developing countries.’ The west supports Ukraine, ignoring other economically weaker nations impacted by the war. India is providing nations with food grains but that also has a limit.
With the Saudi’s and its allies not increasing oil production, economic sanctions on Venezuela and Iran continuing, global oil prices will not witness a downward trend impacting inflation. In many developing countries inflation is skyrocketing. Sri Lanka, which currently has foreign exchange reserves of just USD 500 million, faces shortfalls in oil, fertilizers and food grains. Inflation is 23% in Sri Lanka and 70% in Turkey. There are protests in Peru due to rising prices. India will back its neighbourhood but there would be none to support nations in Africa, South America or other parts of Asia.
Europe and the US continue to fund and arm Ukraine. The Biden administration recently announced a grant USD 33 Billion in military aid to Ukraine. It did so when it realised that economic sanctions have had limited impact and drawing in Russia into the conflict for a prolonged duration would serve its strategy better. Mercenaries from the west are fighting in Ukraine. Western leaders have flown into Kiev to meet the embattled Ukrainian president, Volodymyr Zelenskyy. Weapons being provided are with the intention of prolonging the war, rather than bringing it to an end. Backed by the west, Zelenskyy has almost brought talks with Russia to a standstill. No quantum of military weapons can reverse Russian gains. They may only delay the inevitable and enhance destruction in Ukraine.
The west appears to be shifting its goalposts from defending Ukraine to degrading Russian capabilities and economy, thereby containing it. Biden has openly hinted at regime change in Moscow. Western aims may not succeed as far as Russia is concerned but they will ensure large-scale destruction of Ukraine and economic collapse of many weaker nations. In case Europe switches away from Russian oil and imposes curbs on Russian oil exports by hitting its shipping, global oil prices will remain high. European oil demands will ensure that. The world will suffer because of Europe and US’s fixation for the war in Ukraine.
Western powers should have set aside their ego and worked to bring peace to Ukraine, not only to save its populace and infrastructure but to prevent the war from hurting weaker nations. However, they are exploiting the invasion to contain Russia. While this may or may not succeed, many other nations will land under increased debt. The UN Secretary-General Antonio Guterres stated, ‘The crisis (Ukraine war) could plunge up to 1.7 billion people, more than a fifth of humanity, into poverty and hunger on a scale not seen in decades.’
India’s refusal to join the western bandwagon in condemning Russia and imposing sanctions is, apart from its own interests, based on the impact western actions have on economically weaker nations. Russia can never be brought under as it remains the world’s most mineral rich nation, but many others will fall into debt traps. Ultimately, the west and Ukraine would be forced to negotiate with Russia. By then it would be too late. Ukraine would have been destroyed, thousands dead and large parts of the developing world paying the price for western adventurism aimed at containing Russia. This is western selfishness at its worst.