IN February 2022, the world was taken aback by Russia’s invasion of Ukraine, perceived as a significant geo-economic threat as the global economy was in the early stages of post-COVID recovery. This crisis posed a political dilemma for South Asian states, forcing them to choose between supporting the US or Russia. The West portrayed the conflict as a battle between might and right, a view vehemently rejected by the Asia Pacific at the United Nations General Assembly. Russia’s actions threatened global peace, sparking concerns about energy security, territorial integrity and food supplies. Since then, the world has grappled with the need to find alternative energy sources to replace Russian options.
Russia’s military intervention in Ukraine violated international law and undermined Westphalian territorial integrity. The UN General Assembly (UNGA) convened to discuss the legality of Russia’s actions, with notable absentees from South Asian major economies such as India, Pakistan, Sri Lanka and Bangladesh. These nations opted not to attend, while other member states voted in favour of UN General Assembly Resolution ES-11/1, denouncing Russian aggression. In recent UNGA voting, major South Asian states maintained a neutral stance, highlighting the region’s division.
The conflict, though confined to Ukraine, had a substantial impact on Global South countries with no direct economic links to Russia or Ukraine. Commodity prices, including oil, copper, grain and maize, experienced a sharp increase due to the crisis. Rising gasoline prices destabilized the economies of developing nations and exacerbated global inflation. Countries in the Asia-Pacific region now grapple with the challenge of balancing adherence to international norms with the desire to avoid alignment with a particular bloc. This has raised questions about India’s efforts to insulate its economy from foreign shocks and pursue self-sufficiency in crucial industries.
Despite India’s attempts to mitigate the impact by circumventing western embargoes and purchasing Russian oil at lower prices, it still faced rising global food prices, resulting in price hikes, reduced tourism revenue and difficulties accessing international capital markets. Pakistan experienced soaring prices for electronic components, food, goods and petrol, leading to economic upheaval. Bangladesh saw signs of inflation, a drop in foreign exchange reserves and a current account surplus. The world’s shift in focus from Afghanistan to Ukraine allowed the Taliban to consolidate power, largely unnoticed in mainstream media.
Nepal and Bhutan saw their currencies depreciate, food costs rise and a drop in foreign remittances and European visitors. The decline in Russian and Ukrainian tourists significantly impacted the Maldives’ and Sri Lanka’s tourism industries, reducing revenue and foreign exchange reserves.
In response to the geopolitical situation, EU nations put aside their internal disagreements to denounce the war and impose severe economic sanctions on Russia. These sanctions severely affected the Russian economy, resulting in a decline in businesses and a shortage of goods, reducing domestic output and exports. Russia faced waves of international economic sanctions, particularly from Europe and the US, further isolating it from the global economy. Over 1,000 foreign businesses reduced their activities in Russia, accounting for over 40% of its GDP. The supply chain disruptions slowed manufacturing and created a supply shortage.
This situation suggests that Russia’s international influence may wane, potentially benefiting NATO and enhancing US influence in Europe. The EU’s marginalization in shaping regional policies is a significant concern. In conclusion, the conflict’s socio-economic repercussions have prompted countries to reconsider their alliances and seek alternative food and energy sources. Collaboration between South Asian and European nations could help mitigate the negative impacts by strengthening trade and engagement in areas such as agriculture and innovation.
—The writer is a PhD Scholar and research officer at the Institute of Regional Studies Islamabad.
Email: [email protected]
