The winners and the losers of the Russia-Ukraine war

Mar 25, 2022 01:23 PM IST

Three key countries — India, China, and the UAE — which abstained from voting against Russia will see some wins and some losses. However, Russia may win smaller battles now, but will lose greatly in the long run. 

A month after the Russian invasion of Ukraine, the mighty Russian army seems to have lost momentum and is struggling to take control of major cities. Almost three million people are said to have left Ukraine. The number of civilian casualties increases day by day: In the city of Mariupol alone, there are possibly more than 2,000. The number of Russian deaths may have crossed 7,000. 

Ukraine is surprising the world with the resilience of its people, their resolve to stay and fight a giant opponent, the confidence of their president — who seems determined not to give up — is receiving standing ovations from the parliament of Western nations. (AP) PREMIUM
Ukraine is surprising the world with the resilience of its people, their resolve to stay and fight a giant opponent, the confidence of their president — who seems determined not to give up — is receiving standing ovations from the parliament of Western nations. (AP)

Vladimir Putin and his ministers keep denying that this is an invasion and talk about the de-Nazification of the country, arresting protesters on Russian streets and whoever is using the words “war” or “invasion”. He insists on the fact that Russian precision weapons are only hitting military targets, and that hospitals, theatres, and other public buildings are being shelled by Ukrainian “Nazis”, destroying their own cities to damage Russia’s image. His statements would be laughable, if people weren't dying and a country wasn't in the process of being destroyed. 

In Russia, most of the independent media has shut down and access to social media is blocked by the government. At this time, Russia seems to be in a much worse situation than its President could have anticipated. The pace of the “special operation” is much slower than he would have hoped; its army has certainly lost clout; the Rouble has depreciated by more than 40% in a few weeks; international travel has become difficult and disruptions in the supply chain are causing factories to shut down. While Russia may eventually win the war, in the meantime, it is losing many battles. 

On the other hand, Ukraine is surprising the world with the resilience of its people, their resolve to stay and fight a giant opponent, the confidence of their president — who seems determined not to give up — is receiving standing ovations from the parliament of Western nations.

People wonder why this war started to begin with. Pro-Russians state that the possibility of Ukraine getting into the North Atlantic Treaty Organization (NATO), pushed by America, was too threatening to let it happen and that the invasion was a reaction to this. The choice of the timing was also well pondered by the aggressor, since after the impact of the pandemic, neither European nations nor the United States (US) would have wanted to be directly involved in a war to defend a country that, though with a strategic position and relevant export of food and minerals, is not important enough to risk a global conflict.

In a war, there are always winners and losers. While it is difficult to predict who will win, there are clear gains apparent even in the current situation. 

The two UN resolutions, backed by the US, within 10 days are an indication. On February 26, the first resolution won the support of 11 nations and, unsurprisingly, was vetoed by Russia. Among those who abstained from voting were China, India and the United Arab Emirates (UAE). Why would they avoid voting against Russia? 


In the last month, we have seen clear — and growing — links between China and Russia. China needs to find the right balance between its friend and neighbour opposing the joint rival America, without risking losing access to the global financial system (read: the SWIFT ban) — one of the most effective sanctions imposed on Russia as a consequence of the invasion. 

Undermining the legitimacy of the sanctions is in China’s interest because it has always believed that no external player should intervene in matters that happen within a certain nation (Ukraine was once part of the USSR, and China may still consider it within Russian influence). During the Hong Kong protest not too long ago, some sanctions were imposed on China. Looking at the future, China might envisage the take over of Taiwan, which they have always considered a part of the mainland. And China would, obviously, not want the West to intervene in such a situation. 

Therefore, it cannot condemn today what it may think to perpetuate tomorrow. China is also receiving a large part of Russian crude and liquefied natural gas, which it cannot afford to lose. 

However, some Chinese firms such as Tik Tok and Volvo have already suspended operations in Russia. Other firms dealing with Russia may be affected by secondary sanctions as an effect of bans imposed on Russia. At this moment, China seems to be a careful observer of the current situation, gaining some additional confidence from its new friend representing a possible export partner for enhanced trade. At the same time, it is trying not to appear too explicitly pro-Russia, to avoid the consequences of worsened trade relationships with the West and denied access to financial tools.


The other abstention from the vote of the resolution in February, as well as of that of March 3, was India. This surprised some Western observers, since India has been trying to improve its relationship with the US over the last few decades. However, looking more closely into the move, it is not difficult to find reasons for the lack of a strong stand against Russia. The relationship between India and Russia dates back to the years of Indian Independence, when food and economic aid were provided by Russia. Even today, India depends on Russia for its arsenal. India is also a net importer of energy. 

There are rumours that, when the ban on Russian fuel was being discussed and later implemented, Russia offered India a large quantity of crude and gas at highly discounted prices. This would contribute to partially offset the rising price of commodities (like fertilizers) that are pushing up Indian inflation, a matter of great concern for India. India's abstention may also indicate its need for Russia’s help in a possible conflict with China at its borders. India also knows that its abstention would have not caused retaliation from the West, given the fact that America needs India to contain the expansion of China. 

At the moment, India seems only relatively affected by the war. It may see its inflation rise further, but this could be mitigated by the lower cost of energy thanks to the bargain on Russian crude. India may also see its reputation as the largest world democracy affected by not condemning an aggressive invasion in a democratic country, but, at the same time, its geopolitical clout may be enhanced, thanks to improved relations with its long time Russian friend and its balancing role (among authoritarian regimes) in Asia. 


Now, we come to the third country that initially abstained from the first UN resolution, but later joined the over 140 countries that voted in the second resolution. The UAE is a much smaller player in the world geopolitical scenario, given its bigger neighbour, Saudi Arabia, which aspires to dominate the region in competition with Iran. The economy of the UAE is based on oil, tourism and, to some extent, capital transiting through the country thanks to its good logistic infrastructure as a trade hub. Many Russian tourists and businessmen chose UAE as a base, given the fact that it is just four hours away from the Russian capital and happens to have the same time zone. The relationship with Russia has historically been good, being both cooperating members of the Organization of the Petroleum Exporting Countries (OPEC). 

However, the ban on Russian oil represents an opportunity for the Arab country. Because of the war, Russian tourists have not been very welcome in Western countries and their presence in the UAE has visibly increased. Many Russians are moving their money from their country with difficulty, given what happened with the SWIFT system. One of the favourite destinations of such out-flowing funds seems to be the UAE, which has never discriminated against the origin of the in-flowing financial capitals. 

Among the three countries that initially abstained to vote in the first UN resolution, UAE seems to be a net winner. China and India may gain or lose, depending on how facts will develop.

Between the two nations in the current war, the most powerful might eventually prevail, but in economic, political and social terms, Russia may suffer the strongest disruption since the time of Stalin, possibly even worse than that experienced with the collapse of the Soviet block in 1989.

Stefano Pelle is the former MD of Ferrero South Asia, Piaggio Vehicles (Vespa brand owner) and Perfetti Van Melle South Asia, Middle East and Africa. He currently runs his consulting practice based out of New Delhi and Dubai.

The views expressed are personal

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