Economic Parallels of the Russian-Ukrainian Wars
Nothing can tear a country's economy to shreds quite like a nationwide war. Yet again the
eyes of the world are keeping a very close look at the dealings between Russia and Ukraine. The
current crisis seems glaringly similar to the one between these nations in 2014. Although this is
true, these tensions run deep, hundreds of years deep in fact. The crisis unfolding today dates
back to the time that empires were in place of modern day Russia and Ukraine. Cultural strife
and tensions over access to the Black Sea and Crimea, and of course talk of Ukraine joining
NATO have resulted in the relations these nations have today. And the devastating impact can be
seen by the toll taken on both country’s economies. The effects of both the 2014 and 2022
Russian-Ukrainian crises will have a lasting economic impact on both countries as well as the
global market. Russia is already feeling the impact of the sanctions that have been placed on the
country since its invasion of Ukraine a few weeks ago. Other countries have begun to feel the
impact as well. Further economic debilitations are certainly to come.
Grounding ourselves in the current state of affairs, we must look at how the relations
between Russia and Ukraine came to be like this. In early March, Russia took control over one of
Europe’s largest power plants. After that initial invasion, thousands of Russian troops set their
mark towards Kiev, the capital of Ukraine. A humanitarian crisis is now as thousands of
Ukrainian civilians have died already and 2 million are refugees have fled the conflict. Given this
context, it is easier to evaluate the war from an economic standpoint. So far, the United States
and its European allies like The United Kingdom, have been the toughest with their sanctions
against Russia. The US and its allies obstructed Russia from using SWIFT, which prevents
Russia from being allowed to make transactions on a global scale. This makes Russian
transactions beyond their border nearly impossible. (Kirby) So far, intense global pressures and
robust economic sanctions haven’t been enough to deter Russia from its military missions and
national goals. The world and Ukraine are locked into an unforeseeable future and scary
existence.
On February 24th “Biden announced that the United States would impose sanctions on
Russian financial institutions, including cutting off Russia’s largest banks from the US financial
system, and on Russian elites in Putin’s inner circle. America will also implement export controls
on certain technologies. The United Kingdom and Europe added their own sanctions, imposing
the “massive” penalties the West had been warning Putin about.” (Kirby) Still, more needs to be
done in order to deter Russia, as the nation has made their plans of complete invasion clear. Putin
himself has been sanctioned by the EU and the US.
Furthermore the United States and other nations that oppose Russia’s actions have
targeted the nation’s foreign reserves, money that is crucial in supporting the nation. (Kirby)
Additionally, the US has been targeting Russia’s core- its supply chains. These actions will have
a critical impact on Russia’s economic abilities. Politico media, which covers international policy
stated, “Russia does not produce a number of the things internally that they need to build their
military equipment or to build things for their economy,” (Gallardo). The hope from the United
States and its allies is that the freezing of assets, disruptions to the supply chain, and sanctions,
can stop Russia in its tracks.
Internationally, the impact of the war can be seen as well. The prices of food as well as
oil have been driven up which could make a European economic slump an issue. (Lynch) This
war means a lot for global growth as well. It could potentially be stripped by one or two
percentage points of global growth according to Ernst & Young’s chief economist. Concerning
economic predictions continue to come and the world watches the war unfold.
​
Sadly, but not surprisingly, this isn’t Russia’s first invasion of Ukraine. Just as Putin
doesn’t regard Ukraine as a sovereign nation today, he didn’t in 2014 when he annexed Crimea,
attaining his invasion Eastern Ukraine. “On February 25, NATO announced that it was activating
part of its NATO Response Force — a 40,000-troop unit modernized after the 2014 Crimea
invasion — to protect allies on NATO’s eastern flank.“ (Kirby) Back in 2014, the EU and United
States took similar steps to try and control Russia’s intense plans and movement toward Ukraine.
At that time they enacted sanctions on specific Russian companies and the government in order
to try and contain the crisis that was at hand. The economic ties, as they are now, were quite
entangled between Russia and Ukraine. Economic ties were plentiful due to the second
Ukrainian president Leonid Kuchma. His goals were to entangle Russia and Ukraine’s
economies even more through privatization. His main goal was to have better relations between
the newly free nation and its former ruler. Just before Leonid came into power, economic EU
relations with Ukraine were in the works, all seemingly halted in early 2014. However, in the
summer an economic agreement was signed between Ukraine and Europe, a move that greatly
agitated Putin. This quote, from a 2014 Vox article chronicling the Ukrainian crisis could just as
well have been taken out of a 2022 article - “The US and Europe, while clearly outraged and
punishing Russia with economic sanctions, have no plan to intervene, as putting Western troops
into direct combat with Russian troops could make the risk of World War Three too great.”
Surprisingly, the economic sanctions weren’t enough at the time. This is a scary thought
considering the current state of affairs.
​
Ultimately, the way things play out will certainly have a strong and lasting impact.
Obviously, history can be learned from, as it tends to repeat itself. Hopefully, this crisis can be
stopped sooner rather than later so as to not stunt global economic growth as predicted.
https://www.bbc.com/news/business-61235528
Works Cited
Fisher, Max. “Everything You Need to Know about the 2014 Ukraine Crisis.” Vox, Vox, 3
Sept. 2014,
https://www.vox.com/2014/9/3/18088560/ukraine-everything-you-need-to-know.
Gallardo, Cristina. “US Treasury: More Western Sanctions to Target Russian Economy,
Supply Chains.” POLITICO, POLITICO, 29 Mar. 2022,
https://www.politico.eu/article/western-allies-sanction-russia-sectors-us-treasury-official-ad
eyemo/.
Kirby, Jen, and Jonathan Guyer. “Russia's War in Ukraine, Explained.” Vox, Vox, 24 Feb.
2022,
https://www.vox.com/2022/2/23/22948534/russia-ukraine-war-putin-explosions-invasion-e
xplained.
Lynch, David J., and Caroline Anders. “Analysis | A Greater Economic Toll from Ukraine
War Looms.” The Washington Post, WP Company, 12 Apr. 2022,
https://www.washingtonpost.com/politics/2022/04/12/greater-economic-toll-ukraine-war-lo
oms/.
“Ukraine Crisis.” Encyclopædia Britannica, Encyclopædia Britannica, Inc.,
https://www.britannica.com/topic/Ukraine-crisis.