On the surface, the Ukraine war appears to be a conflict between two primary actors, namely, the Russian Federation and the sovereign nation of Ukraine. On deeper analysis, however, it can be said that the Ukraine war is an example of great power competition.
It is a continuation of the Cold War rivalry between the United States and the Soviet Union, which has now been transferred to a rivalry between the United States and the Russian Federation. As great power competition involves establishing an international order and building coalitions, alliances, and blocs, the Ukraine war is further complicated by the actions of third parties, both state and non-state actors.
The involvement of NATO (representing 31 nations), the European Union (27 countries, including some overlap with NATO), the G7 (whose members are all part of NATO or EU), as well as other U.S. allies, such as Japan and Australia, increases the likelihood of the war escalating into a world war. The outcome of the war will determine which of these alliances hold and which actors will participate in the resulting international order.
The western/U.S. side of the conflict contains many of the world’s largest and most developed nations, all of whom have supported UN condemnation of the Russian invasion. The western allies have been providing weapons, money, and logistic and technological support to Ukraine. Additionally, 30 of these nations are participating in economic sanctions against Russia.
On the other side are the countries aiding Russia. Although Russia has no direct allies in this conflict, Moscow could have rely on Minsk and Belgrade. Belarus may already have become involved militarily. Serbia, on the other hand, is distancing itself from Putin.
China is Russia’s somewhat ally, although the two nations do not have a defense agreement. Since the conflict began, China has become Russia’s largest trading partner and financial patron. India, an officially nonaligned country, continues to purchase crude from Russia. India’s trade with Russia is now the largest it has ever been.
Private actors, such as Elon Musk’s SpaceX, have been providing technical support to Ukraine. Musk has allowed the Ukrainian forces to use his Starlink satellite units to enable their telecommunications. Two additional non-state actors are the International Legion of Territorial Defence of Ukraine and the Wagner Group.
The International Legion is composed of foreigners who have volunteered to fight for Ukraine. They are not considered mercenaries under international law because they are not paid a rate substantially higher than that of Ukraine regular army soldiers. Additionally, the volunteers have been given a blanket permission by a number of countries, such as the UK, which stated that it would not prosecute its citizens who volunteered to fight in Ukraine.
The members of the Wagner Group, by contrast, are considered mercenaries because they are paid more than regular Russian soldiers. Wagner Group is a private military company (PMC) closely aligned with the Kremlin. This mercenary army is under the command of Putin-ally, Yevgeny Prigozhin, a Russian businessman with ties to the FSB (Federal Security Service).
Wagner is suspected to have played a role in the 2014 Ukraine conflict which resulted in the Russian annexation of Crimea. The group has also fought on Moscow’s behalf in Chad, Syria, Libya, the Central African Republic (CAR), and elsewhere. Everywhere that Wagner has been deployed, they have been accused of human rights abuses including rape, torture, and targeting civilians.
The Sanctions
The U.S. Treasury Department, coordinating with the Department of State, the Department of Commerce, the Office of the U.S. Trade Representative, and U.S. allies, including the G7 partners targeted a number of business sectors in an attempt to isolate Russia from the world economy. Since the beginning of the war, over 2,500 sanctions have been brought by the United States alone. The sanctions are designed to prevent Moscow from obtaining capital, materials, and technology necessary for the continuation of the war.
The threat of sanctions is hoped to deter third actors from aiding Russia. Prohibited activities include helping Russia avoid sanctions, by utilising shell companies, obfuscated ownership structures, or third-party proxies to conduct transactions.
Additionally, the assets of Russian oligarchs, extremely wealthy individuals with a close relationship to the Kremlin, have been frozen because they were being used to funnel finances back to Moscow. Among the frozen assets are wealth management products, yachts, real estate, luxury goods, high-value assets, precious metals, stones, and jewelry. In total over $300 billion worth of Russian assets have been frozen.
The G7 have declared that countries supporting Russia, in violation of international sanctions will face severe repercussions. The White House has specifically warned China not to provide weapons to Russia. President Biden has also asked U.S. allies to support major sanctions against China, if China violates the prohibition on sending military support to Russia. The U.S. Treasury Department announced in February that it was bringing secondary sanctions against 30 actors from third-countries which had helped Russia evade sanction. This included arms sales, as well as illicit finance.
The most damaging sanction has been EU restrictions on the purchase of Russian gas and oil, as well as a gas price-cap. Exports fell by 14.6% which caused Russia’s gross revenues to plummet. As a result, Russia’s deficit in 2022 was $47 billion and the country’s GDP growth rate was negative 2.1%.
Certain sectors have been harder hit than others. Consumer sales have dropped considerably with wholesale and retail trade down 17.3% year-on-year. Manufacturing contracted by 4.8%) and transport by 4%. Imports are down 11.2% meaning that there are products for consumers, representing a reduction in well-being.
A New International Order
Both China’s Xi Jinping and Russia’s Vladimir Putin aim to upset the U.S.-led, Western international-order. Putin would like to create a modern Russian empire on the foundation where the USSR once stood. Xi Jinping, on the other hand, wants to establish a China-led world order.
Beijing is happy to profit, economically, from the Ukraine war and revels in seeing the west tied up in a conflict, far away from Taiwan. China, however, does not have a defense agreement with Russia and historically has limited its investment to countries with political stability. Consequently, while China will continue to support Russia, somewhat, it is unlikely that China would join the fight or risk large-scale secondary sanctions. And it is inconceivable that China would join a new Russian Empire if one emerges from this conflict.
Thirty-five countries abstained from a vote of condemnation in the UN, signaling that they are non-aligned. It is possible that they are waiting to see who wins, before choosing sides. Meanwhile, the west has become more galvanized than it has been in decades.
Since the collapse of the Soviet Union, the case could be made that NATO was no longer necessary. And Europe, believing they were not under direct threat, saw U.S. militarism as an anachronism, as Washington attempting to hold on to the good old days of American hegemony. This war has changed all of that. The Europeans now understand that the threat to Europe is real. The Cold War also seems justified now. The 40 years when the U.S. identified Russia as a threat have turned out to be correct. U.S. leadership of the western international-order has been restored, as has the justification for militarization.
The outcome of the Ukraine War will have tremendous, long-term implications, shaping the defense policies of the United States, its allies, and its rivals. The war involves a number of private and irregular military units, international support for combatant states, satellites and other technologies, as well as economic and financial weapons, including trade bans.
All of these factors will be assessed by both sides and will be incorporated into plans for future wars. NATO will have to rewrite its strategy, incorporating this experience of hybrid warfare. Moving forward, the Alliance will probably renew its focus on Russia-containment, while expanding its scope to include the China-threat. Among the expected changes is a firmer commitment to The Pledge on Defense Investment which NATO leaders signed, but until the Ukraine War, had largely ignored.
In total, the U.S. alone accounts for two thirds of NATO’s defense spending. Additionally, NATO members rely on the United States to support essential combat capabilities, such as intelligence, surveillance and reconnaissance. NATO also needs U.S. help for logistics, hardware support, air-to-air refueling, ballistic missile defense, and airborne electronic warfare. Moving forward, there is likely to be more investment in these capabilities across all concerned actors.
Author: Antonio Graceffo
Disclaimer. The views and opinions expressed in this report are those of the author and do not necessarily reflect the official policy or position of SpecialEurasia. For further risk assessments, reports, and analyses on the Ukraine conflict and its impact on the regional and international arena, do not hesitate to contact SpecialEurasia at info@specialeurasia.com.
