Abstract<\/em><\/strong> 1 – Ukraine is bordered to the east by Russia, to the southwest by Moldova 2 – Because it is a fertile plain, it is perfect for growing crops like 3 – It is additionally referred to as \u2015Europe\u2019s breadbasket. <\/p>\n\n\n\n 4 – Second, it ranks first in terms of coal production, which accounts for around 95 5 – Also well-known is Ukrainian architecture. Since the Kievan 18 \u2015Export Controls: Dual-Use Items, Software, and Technology, Goods for Torture and 26 \u2015Europe Population 2022 (Demographics, Maps, Graphs),\u2016 32 \u2015War in Ukraine and Rising Energy Costs Risk Hampering Asia\u2019s Decarbonisation 38 Addie Lewis, \u2015Food Supply Chain: Importance & Management Strategies,\u2016 Hub, 45 Operational Data Portal. UNHCR, 2022, 52 Palanisamy Balachander,\u2016 Why South Asia is Divided over Russia-Ukraine,\u2016 53 Palanisamy, \u2015Why South Asia is Divided over Russia-Ukraine,\u2016 Deccan Herald. 57 Palanisamy,\u2016Why South Asia is divided over Russia-Ukraine,\u2016 2022. 61 Ayesha Mirza, \u2015Ukraine, Russia War: Implications for Pakistan,\u2016 Express 63 Mujeeb ur Rehman, \u2015Ongoing Ukrainian Conflict: Inverse Economic Impacts on
The damaging economic, political, and diplomatic effects of Russia\u2019s attack
on Ukraine in February 2022 have not been confined to just continental
Europe. The highly interconnected and interdependent nature of the global
economy means that other regions are similar, or even more negatively,
affected by any outbreak of hostilities in states like Ukraine that prove
integral parts of global food and energy supply chains. This is particularly
the case with the South Asian region that has a predominance of
developing economies already struggling to provide adequate basic
services to their citizens, especially in the aftermath of the COVID-19
pandemic and another climate change-related natural disasters like floods
and wildfire. The aim of this paper is to analyse the ongoing economic and
geopolitical effects of Russia\u2019s war against Ukraine in South Asia,
highlighting how sustained disruptions in the global food and energy supply
chains exacerbate existing insecurity in developing economies. The
corollary to this economic insecurity is increased inter-regional tensions as
individual states compete against each other for increasingly scarce and
costlier food and energy resources.
Keywords: <\/em><\/strong>Russia-Ukraine War, South Asia, Food Crisis, Humanitarian Crisis, Energy, Global Politics.
Introduction<\/em><\/strong>
In Eastern Europe, Ukraine is the second largest country after Russia.<\/p>\n\n\n\n
and Romania, to the west by Hungary, Poland, and Slovakia, to the
north by Belarus, to the south by the Black Sea, and to the northwest by
Belarus.<\/p>\n\n\n\n
wheat.<\/p>\n\n\n\n
per cent of all hydrocarbon fossil fuels with 2.5 per cent coming from oil
and gas.<\/p>\n\n\n\n
Rus era, more than 900 churches and cathedrals have been constructed.6<\/p>\n\n\n\n
The economic, political, and diplomatic fallout from Russia\u2019s invasion
of Ukraine on February 24, 2022, went far beyond Eastern Europe. In
addition to having considerable political, ideological, and historical
significance for the Russian state, Ukraine is crucial to the world\u2019s food
and energy supply lines. These international food and energy supply chains
have been negatively impacted by the protracted disruptions to Ukraine
exports, particularly wheat and grains, as well as sanctions on Russian
energy and food exports. The political and diplomatic attention has largely
been on the consequences the scarcity of energy supplies will have on
Western Europe as the northern winter draws near.
Looking more broadly, the concomitant disruptions to the food supply
chains brought on by the conflict in Ukraine have severely impacted
many emerging economies, whose governments typically find it
challenging to provide their populations with adequate basic services,
particularly food and energy. These states are now forced to compete
with one another for more expensive and scarce food and energy
resources, on top of already having to deal with the COVID-19
pandemic\u2019s economic effects. In turn, this has raised the possibility of
escalating already-existing intra-regional tensions.
This is particularly true in South Asia, where there are most emerging
nations and ongoing geopolitical tensions. The purpose of this article is to
examine the effects of interruptions in the food and energy supply chains
that flow into the region of the states within and between the South Asian
region. To achieve this purpose, this study investigates the ongoing
economic and geopolitical effects of Russia\u2019s war against Ukraine in South
Asia, highlighting how sustained disruptions in global food and energy
supply chains exacerbate existing insecurity in developing economies. The
study begins with the background of the Russia-Ukraine conflict followed
by an analysis that demonstrates the growing susceptibility of emerging
nations to interruptions in international supply chains. The findings suggest
that more zero-sum economic, political, and diplomatic decisions being
made than net-sum regional collaboration, led to rising geopolitical tensions
and global food\/energy supply chain disruption at the global level. Since
the topic is new and rapidly evolving, the authors used the secondary data
available and used a thematic analysis tool to achieve the aim of this study.
Russia-Ukraine Conflict
The history of the Russia-Ukraine war dates back to November 8, 1989,
and it is closely related to NATO\u2019s advance to the eastern border of
Ukraine. With 12 initial members, NATO, a defense pact of 28 nations,
was established in 1949.7 Now it includes two North American nations.
It offers its member states collective defense capabilities. NATO
and Russia came to an unwritten agreement in 1990, following the
collapse of the Berlin Wall, that NATO would not station forces in the
formerly East German territory. But numerous recently independent
governments expressed an interest in joining NATO after the collapse of
the Soviet bloc in 1991. However, Russia took offense at such a wish.
In 1996, the United States of America (US) under the Warsaw Pact
made NATO enlargement a key component of US foreign policy after
five years. Poland, Hungary, the Czech Republic, Bulgaria, Estonia,
Latvia, Lithuania, Romania, Slovakia, Slovenia, Albania, Croatia,
Montenegro, and North Macedonia all joined NATO during the period
from 1996 to 2020. 8 Russia continued to monitor these nations and
NATO\u2019s growth was deeply outraged when, in 2022, NATO
formally recognized Bosnia and Herzegovina, Georgia, and Ukraine as
three additional states. The problem is that while Russia views NATO
extension to its eastern borders as a security danger and a breach of the
1990 common understanding between Russia and NATO, Ukraine
views joining NATO as its sovereign right. Since then, Ukraine joining
NATO escalated serious tensions and became the bone of contention
between Russia and Ukraine.
As neither side is able to come to terms with the other, the scope of the
The Russia-Ukraine war continues to grow. In terms of both money spent and
lives lost, this conflict is indeed expensive. Serhiy Marchenko, the Finance
Minister for Ukraine, estimates that the battle has already cost US$8.3
billion in military and humanitarian expenses.9 While the number of deaths
per soldier is substantially higher than in a typical modern combat. It
appears that this fight will result in the greatest number of war deaths ever
recorded and that it has already become one of the worst wars in post-World War II Europe. In light of the current state of the situation, NATO\u2019s
extension into Ukraine would be more dangerous and expensive for
everyone, not just Ukraine. Humanitarian and energy crises are being
exacerbated by the war. Sadly, there is a chance that the Ukrainian conflict
could rank among the deadlier wars of the last 200 years.
Currently, as of August 15, 2022, Russia is the subject of the
greatest number of list-based sanctions worldwide.10 There are a total of
11,812 limitations were placed on the citizens, businesses, automobiles, and
aircraft of the nation. About 9.1 thousand of them were assigned after
February 22, 2022.11 According to Statista, 7,568 Russian citizens were
subject to limitations in a total of 10 countries between February 22 and
August 15, 2022. 12 These countries included Australia, Canada, the
European Union (EU), France, Japan, Switzerland, the United Kingdom
(UK), and the US. Additionally, at that time, the sanctions were directed
against 1,452 entities. Sanctions were originally imposed because of the
nation\u2019s recognition of the rebel Donetsk and Luhansk People\u2019s
Republics (DPR and LPR), and then as a result of its military assault on
Ukraine.13
Russian assets and stockpiles of foreign currency have been frozen
by Western nations. The Russian Elites, Proxies, and Oligarchs Task
Force (REPO) said in a joint statement that it has frozen US $300 billion
in assets belonging to the Russian central bank and barring US $30
billion in assets of Russian oligarchs and politicians.14 Russian assets
worth \u20ac13.8 billion,15 including yachts, helicopters, homes, and works of
art, have been frozen by the EU, and another \u20ac196 billion worth of
transactions16 have been halted. Additionally, the UK has frozen the
assets of oligarchs and their family members totaling \u00a3150 billion (\u20ac175
billion) and frozen \u00a3500 billion (\u20ac583 billion) from Russian banks or
firms, some of which are partially state-owned.
Reports from the BBC state that among the other sanctions imposed
on Russia is a prohibition on exports by the UK, EU, and the US of
goods with dual uses,18 such as parts for vehicles. A ban on all aircraft
from Russia into the airspace of the US, UK, EU, and Canada. Russian
gold imports are prohibited.19 An embargo on the import of expensive
goods into Russia Vodka and other imported goods are subject to a 35
percent tax in the UK.20 In addition to these penalties, 600 or so foreign
businesses have stopped doing business in Russia outright or
discontinued their operations there.21 There are several of them, such as
McDonald\u2019s, Coca-Cola, Starbucks, Marks & Spencer, etc.22 Since the
sanctions have been put in place, Russia is experiencing greater isolation
as Russia sees the US-led NATO sanctions as an economic war.
Energy prices are rising because of the Russian invasion. In terms of
global gas reserves, Russia ranks first with 1,688,228,000 MMcf, or 24.3
percent of the total, followed by Iran, Qatar, the US, and Saudi Arabia.23
The top producing nation is the US with 914.6 billion cubic feet per year,
followed by Russia with 638.5 billion, Iran with 250.8 billion, and China with
194 billion, Qatar with 171.3 billion, etc.24 Russia is the top gas exporter in
the world, shipping 201.7 billion cubic meters of gas through pipelines and
39.6 billion cubic meters of liquefied natural gas in 2021(LNG).25 The US,<\/p>\n\n\n\n
Radioactive Sources,\u2016 GOV.UK, 2022, https:\/\/www.gov.uk\/guidance\/export-controls\u0002dual-use-items-software-and-technology-goods-for-torture-and-radioactive-sources
19 David Shepardson, Jamie Freed, and Foo Yun Chee, \u2015US Follows Canada,
Europe on Russian Aircraft Ban,\u2016 Reuters, March 1, 2022,
https:\/\/www.reuters.com\/business\/airspace-closures-after-ukraine-invasion-stretch\u0002global-supply-chains-2022-03-01\/
20 \u2015UK Announces New Economic Sanctions against Russia,\u2016 GOV.UK, 2022.
https:\/\/www.gov.uk\/government\/news\/uk-announces-new-economic-sanctions\u0002against-russia#:~:text=alongside per cent20G7 per cent20allies
21 \u2015Over 1,000 Companies Have Curtailed Operations in Russia \u2014 But Some
Remain,\u2016 Chief Executive Leadership Institute, Yale School of Management,
January 9, 2023, https:\/\/som.yale.edu\/story\/2022\/over-1000-companies-have\u0002curtailed-operations-russia-some-remain
22 Race Michael and Lucy Hooker, \u2015Which Companies Are Pulling Out of Russia?,\u2016
BBC News, 2022. https:\/\/www.bbc.com\/news\/business-60571133.
23 \u2015Natural Gas by Country 2022,\u2016 Worldpopulationreview.Com, 2022,
https:\/\/worldpopulationreview.com\/country-rankings\/natural-gas-by-country
24 \u2015Natural Gas by Country 2022.\u2016
25 \u2015Leading Gas Exporters,\u2016 Statista, 2022,
www.statista.com\/statistics\/217856\/leading-gas-exporters-worldwide\/
44
Qatar and Norway were the top three natural gas exporters worldwide.
Russia is also one of its largest oil producers.
Many nations, especially China and Europe, depend on Russia for their
oil and natural gas needs.26 When Russia invaded Ukraine in 2022, the EU
nations imposed an embargo on Russian goods, which further complicated
the energy situation in the EU. To continue importing Russian oil and gas,
many nations, like Germany, carved out exceptions.27 However, the EU
also worked to find other trading partners and develop their energy\u0002processing skills in order to lessen their dependency on Russian commerce.
However, since February 2022, western nations have attempted to stifle the
The US and its European allies\u2019 imports of oil and gas.
In terms of removing Russian banks from the Society for Worldwide
Interbank Financial Telecommunications, or SWIFT, Russia faces
problems and roadblocks in the international payment system established
by the West.28 The EU\u2019s 27 members currently rely on Russia for nearly 38
percent of their imported natural gas.29 So far, European infrastructure and
global supply has weathered a 60 percent decrease in Russian gas
deliveries since June 2021.30 Europe is completely reliant on Russian gas.
Currently, they are struggling to find energy alternatives to Russian gas
imports. If different energy policies are not implemented, the European
Union\u2019s reliance on Russia is expected to increase by 50 to 60 per cent of
all gas imports within the next two decades. 31 Because of sanctions,
European countries are unable to pay in rubble while still requiring Russian
gas to meet their basic needs. According to Han Phoumin, the International
Energy Agency issued ten recommendations to reduce the European<\/p>\n\n\n\n
Worldpopulationreview.Com, 2022,
www.worldpopulationreview.com\/continents\/europe-population
27 \u2015Germany Population 2022 (Demographics, Maps, Graphs),\u2016
Worldpopulationreview.Com, 2022
www.worldpopulationreview.com\/countries\/germany-population
28 Richard J. Anderson, \u2015Europe\u2019s Dependence on Russian Natural Gas:
Perspectives And Recommendations For A Long-Term Strategy,\u2016
Marshallcenter.Org, 2022, https:\/\/www.marshallcenter.org\/de\/node\/1276
29 Anderson, \u2015Europe\u2019s Dependence on Russian Natural Gas.\u2016
30 Mark Flanagan etal., \u2015How A Russian Natural Gas Cut-off Could Weigh on
Europe\u2019s Economies,\u2016 July 19, 2022, https:\/\/blogs.imf.org\/2022\/07\/19\/how-a\u0002russian-natural-gas-cutoff-could-weigh-on-Europes-economies\/
31 Anderson, \u2015Europe\u2019s Dependence on Russian Natural Gas.\u2016
Global Energy and Food Supply Chains
45
Union\u2019s reliance on Russian natural gas imports. 32 These included
accelerating the development of renewable wind and solar projects as well
as maximising energy generation from existing low-emissions sources such
as bioenergy and nuclear power.33 But this requires time.
According to the United Nations Office for the Coordination of
Humanitarian Affairs (UNOCHA), \u2015sustained fighting and hostilities,
continue to destroy critical infrastructure and have a serious impact on
civilians in Ukraine, adding to an already unprecedented humanitarian
crisis.\u201634 OHCHR reported 13,212 civilian casualties in the country as of
On August 15, 5,514 were killed and 7,698 were injured.35 Since February
24, more than 10.8 million refugees have crossed into neighbouring
countries, and there are 6,645,000 internally Displaced Persons (IDPs)
in Ukraine, accounting for 15 per cent of the general population.36 The
number of IDPs has increased by nearly 370,000 (six per cent) since
June 23. As of August 17, Ukraine had over 5 million COVID-19 cases
and 108,713 deaths. The ongoing conflict and the COVID-19 pandemic
are exacerbating chronic mental health issues.37
Energy and Global Food Security Issue
Sustaining and maintaining the global food supply chain is crucial to food
security. The global food supply chain theory highlights that a food supply
chain is a process that all food products go through from production all the<\/p>\n\n\n\n
Efforts,\u2016 ERIA, April 19, 2022, www.eria.org\/news-and-views\/war-in-ukraine-and\u0002rising-energy-costs-risk-hampering-asias-decarbonization-efforts\/
33 Anil Trigunayat, \u2015The War in Ukraine: Impact on South Asia,\u2016 India Foundation,
July 2, 2022, https:\/\/indiafoundation.in\/articles-and-commentaries\/the-war-in\u0002ukraine-impact-on-south-asia\/
34 Entcheva Ruja, \u2015Ukraine Humanitarian Crisis,\u2016 Center for Disaster Philanthropy,
September 29, 2022,www.disasterphilanthropy.org\/disasters\/ukraine-humanitarian\u0002crisis\/?gclid=Cj0KCQjwuuKXBhCRARIsAC\u0002gM0ihLIjIlY9rQMkKTPrjf4afZKWySMaT816dZ28RFd7ZwgghzgB6hosaArAEEA
Lw_wcB
35 United Nations, \u2015Ukraine: Civilian Casualty Update 15 August 2022.\u2016 August 15,
2022, https:\/\/www.ohchr.org\/en\/news\/2022\/08\/ukraine-civilian-casualty-update-15-
august-2022
36 \u2015Worldometer,2022,\u2016 www.worldometers.info\/coronavirus\/country\/ukraine\/
37 Relief web, \u2015Ukraine: Situation Report,\u2016 [EN\/RU\/UK], May 19, 2022,
www.reliefweb.int\/report\/ukraine\/ukraine-situation-report-19-may-2022-enruuk
46
way through consumption. 38 The way that most food is produced,
distributed and consumed is unsustainable in every sense of the word,
contributing to unsustainable economies. 39 There are various stages
involved in the food supply chain such as production; handling and storage;
processing and packaging; distribution; retailing; and consumption.40Along
with, that there are around six supply chain models such as continuous
flow; fast-chain; efficient; agile; flexible; and custom configured. For a
better analysis of this paper, we will not get into the details of both the
stages and models of the supply chain but will highlight why is it important.
The global food supply chain is directly connected with food demand
and supply. It is vital for both food safety at the manufacturing and
consumer ends. Just one disruption in the global food chain either at any
stage or model level will lead to global food shortages. If we look at the
five biggest wheat exporters at global levels, Russia stands at number one
with US$7.3 billion (13.1 per cent) of total wheat exports followed by the
US with US$7.29 billion (13.1 per cent), Australia with US$7.2 billion
(13 per cent), Canada US$6.6 billion (11.9 per cent) and Ukraine US$4.7
billion (8.5 per cent).41 They provided about three-fifths (59.5 per cent) of
the overall value of international shipments for nourishing cereal food.42
Both Russia and Ukraine export nearly one-third of the world\u2019s wheat and
barley, as well as more than 70 per cent of its sunflower oil and corn.43
Russia is the world\u2019s largest producer of fertiliser. Food prices around the
world were already rising, and the war has exacerbated the situation by
preventing 20 million tonnes of Ukrainian grain from reaching the Middle
East, North Africa, and parts of Asia.44 Weeks of dialogue on secure routes
to get wheat out of Ukraine\u2019s Black Sea ports have yielded little progress,
with the warmer months of harvest season rapidly approaching. The World<\/p>\n\n\n\n
May 20, 2022, www.highspeedtraining.co.uk\/hub\/what-is-the-food-supply-chain\/.
39 \u2015Sustainable Food Chains,\u2016 Sustain,
https:\/\/www.sustainweb.org\/pdf\/briefing1.pdf
40 Lewis, \u2015Food Supply Chain.\u2016
41 Daniel Workman, \u2015Wheat Exports by Country,\u2016 World\u2019s Top Export, 2022,
www.worldstopexports.com\/wheat-exports-country\/.
42 Workman, \u2015Wheat Exports by Country.\u2016
43 \u2015How did the Russia-Ukraine War Trigger a Global Food Crisis?\u2016 Al-Jazeera,
June 18, 2022, www.aljazeera.com\/economy\/2022\/6\/18\/explainer-how-did-russia\u0002ukraine-war-trigger-a-food-crisis
44 \u2015How did the Russia-Ukraine War Trigger a Global Food Crisis?.\u2016 Al-Jazeera.
Global Energy and Food Supply Chains
47
Food Programme has called for a \u2015political solution\u2016 as the closure of
Ukrainian ports on the Black Sea threaten global food supplies.45
Russia and Ukraine export 21.6 per cent of the world\u2019s wheat,
making them the world\u2019s largest wheat exporters. Russia\u2019s war in
Ukraine is preventing grain from leaving the world\u2019s breadbasket and
raising food prices worldwide, potentially exacerbating shortages,
hunger, and political instability in developing countries.46 Ultimately,
this will result in a serious humanitarian crisis.
According to the United Nations Development Programme (UNDP),
early data suggests that \u201590 per cent of the Ukrainian population could face
poverty and Extreme economic Vulnerability if the war escalates, setting
the country and the region back decades and leaving deep social and
economic scars for generations to come.\u201647 Ukrainians, particularly those
living in rural areas, rely heavily on the agricultural sector for a living.48
Prior to Russia\u2019s invasion of Ukraine, the agricultural sector contributed 11
per cent of the country\u2019s GDP and nearly 40 per cent of total exports.49
According to reports, the Khersonska oblast (south) has started exporting
grain to the Russian Federation.50 Fires have been reported in the central
Dnipropetrovsk oblast, affecting agricultural facilities.51 The escalation of
the attack will almost certainly cause significant harvest disruption and
have a direct impact on food security.<\/p>\n\n\n\n
https:\/\/data.unhcr.org\/en\/situations\/ukraine
46 \u2015How Did the Russia-Ukraine War Trigger a Global Food Crisis?, \u2015 Al Jazeera,
June 20, 2022, https:\/\/www.aljazeera.com\/economy\/2022\/6\/18\/explainer-how-did\u0002russia-ukraine-war-trigger-a-food-crisis
47 \u2015Women and Girls in Ukraine and Neighbouring Countries Require Urgent
Support,\u2016 UNFPA EECA, April 21, 2022, www.eeca.unfpa.org\/en\/news\/women\u0002and-girls-ukraine-and-neighboring-countries-require-urgent-support?page=3
48 Ratushnyak Oleksandr, \u2015The Development Impact of the War in Ukraine: Initial
projections [EN\/UK],\u2016 Reliefweb, 2022,
https:\/\/reliefweb.int\/report\/ukraine\/development-impact-war-ukraine-initial\u0002projections-enuk
49 \u2015Agriculture Fact Sheet [EN\/UK],\u2016 Reliefweb,
2022,https:\/\/reliefweb.int\/report\/ukraine\/agriculture-fact-sheet-enuk
50 \u2015Russian-controlled Kherson Region in Ukraine Starts Grain Exports to Russia \u2013
TASS,\u2016 Reuters, 2022, https:\/\/www.reuters.com\/markets\/commodities\/pro-moscow\u0002kherson-region-starts-grain-exports-russia-tass-2022-05-30\/
51 \u2015Ukraine: Situation Report,\u2016 [EN\/RU\/UK], 2022,
https:\/\/reliefweb.int\/report\/ukraine\/ukraine-situation-report-13-jul-2022-enruuk
48
Hence, Russia and Ukraine are considered the breadbasket and
global energy providers cannot sustain\/maintain their day-to-day food
supply chain mechanism due to war and international sanctions. As a
the result, along with energy shortages, the world is facing serious food
dearth due to the Russia-Ukraine war.
Impacts on South Asia
When taken in conjunction with the pandemic\u2019s widespread destruction,
the Russia-Ukraine dispute serves as a wake-up call for all nations that
require safe food and energy sources, not even just Europe. High energy
costs have made countries recognise that they can no longer count on
imported fossil fuels, presumably resulting in a complete transition
toward non-fossil fuels. It will be fascinating to see how various South
Asian countries come to terms with the negative economic implications.
The destruction wrought by this needless war is being started to feel
throughout the development. In this context, South Asia is experiencing
the consequences both politically and economically. As resultantly, the
detrimental effect on all South Asian countries exacerbates, especially in
nations that depend extensively on costly energy imports. Several
tourism-dependent economies have suffered setbacks, such as the
Maldives and Sri Lanka. However, this raises the question of which
nations could be affected by the crisis and ensuing sanctions. To
respond, we will consider studying the impact of the Russia-Ukraine
conflict on South Asian states with a particular focus on Pakistan.
India
If we look at 2021 statistics, Russia exported US$6.9 billion to India,
while India exported US$3.33 billion to Russia.52 But India has to see its
demands and follow the rules accordingly. Other than trading Russia and
India is also in partnership with nuclear energy expansion. In 2017, the
two countries have already signed a comprehensive nuclear cooperation
agreement \u2014 the Kudankulam nuclear power plant is a critical
collaboration. In turn, India represents a potentially enormous market<\/p>\n\n\n\n
Deccan Herald, March 15, 2022, https:\/\/www.deccanherald.com\/opinion\/in\u0002perspective\/why-south-asia-is-divided-over-russia-ukraine-1089811.html
Global Energy and Food Supply Chains
49
that Moscow cannot afford to undercut. 53 India also imports a large
number of Russian-made weapons. The most recent example is India\u2019s
acquisition of S-400 Triumf air defence systems in the face of the US
opposition and sanctions threats.54 With this India becomes the prime
beneficiary of the conflict. India can continue its diplomatic and trade
relations, particularly energy deals with Russia, unlike many other
countries both within the region and outside that struggle with the
energy crisis and food security.
Nepal
Nepal had received approximately $5.6 million in Foreign Direct
Investment (FDI) from Russia as of July 15, 2020. Though, politically it
looks like Nepal stands with the US in recent years and supports its
policies. This could be the reason that with US$109 million in FDI, the US
is one of the country\u2019s largest investors in Nepal.55 However, Kathmandu is
concerned that massive developmental aid may be reduced as a result of the
war, in addition to the direct impact of rising commodity and fuel prices.
Currently, Nepal imports 40 per cent of its consumer goods and 100 per
cent of its fuel which may be affected by the war continuation. Its foreign
exchange reserves are declining as remittances from the 3-4 million
Nepalese ex-pats have decreased.56 Nepali students in Ukraine, like those
from other countries, had a negative impact. The war and its ongoing
sanctions will have a draconian impact on Nepal which depends on the US
on one hand but cannot ignore the emerging energy and food security
problems due to the war. Nepal cannot leave behind its partnership with the
US but may have to pay for food security in the years to come.
Maldives
Elsewhere in the region, the tourist-dependent Maldives faces similar
pressures as Sri Lanka, whereas India and Bangladesh are better
positioned, with considerably higher foreign exchange reserves, more<\/p>\n\n\n\n
54 Palanisamy, \u2015Why South Asia is Divided over Russia-Ukraine,\u2016 Deccan Herald.
55 Palanisamy, \u2015Why South Asia Is Divided over Russia-Ukraine,\u2016 Deccan Herald.
56 Anil Trigunayat, \u2015The War in Ukraine: Impact on South Asia,\u2016 India Foundation,
July 2, 2022, https:\/\/indiafoundation.in\/articles-and-commentaries\/the-war-in\u0002ukraine-impact-on-south-asia\/
50
diverse foreign exchange sources, and lower external debt. We cannot
claim that Maldives can remain safe from the rising challenges
surrounding food security. Being a tourist destination, the heat of food
security will be felt here as well. Which may lead to a decrease in the
tourism industry affecting the economic stability of Maldives.
Sri Lanka
Looks like Russia may not have deep footprints in South Asia but trade and
partnership with South Asian developing countries is evident in the field of
energy and food supply chains such as energy sectors in Nepal and
Bangladesh and Sri Lankan tea, which is a major importer.\u201657 The export
figures highlight that the value of tea exported to Russia in 2020 will
exceed US$142 million. 58 However, Sri Lankan Foreign Secretary
Jayanath Colombage stated that the conflict would have \u2015severe\u2016
economic impact on Sri Lanka, adding that we would have to pay more for
fuel and gas, and our tea market would suffer.59 The economic stability can
be further affected by a decrease in the tourism sector due to both its political
instability at home and the war in Ukraine. It used to remain one of the
favourite tourist destinations for Russian and Ukrainians. But since the war
broke out Sri Lanka is facing the brunt of it. Foreign cash capital flows from
the tourist industry, which was in the range of USD four to seven billion,60
have reduced significantly, adding to financial hardship, joblessness, and
popular discontent. But it still hopes to revive its tourism industry.
Afghanistan
Since the withdrawal of the US forces from Afghanistan in 2020,
leaving the Afghan people at the tender mercies of the Taliban, the
region has remained economically and politically unstable. However,
due to the Russia-Ukraine dispute, Afghanistan\u2019s emergency aid has
been put on hold. The local Afghans complain that there is no longer
any media coverage of Afghan suffering, including issues of human<\/p>\n\n\n\n
58 \u2015Most Sanctioned Countries Worldwide 2022,\u2016 Statista, October 4, 2022,
https:\/\/www.statista.com\/statistics\/1294726\/number-of-global-sanctions-by-target\u0002country\/
59 \u2015Most Sanctioned Countries Worldwide 2022,\u2016 Statista.
60 Anil, \u2015The War in Ukraine: Impact on South Asia,\u2016 India Foundation.
Global Energy and Food Supply Chains
51
rights involving women and children in desperate need of humanitarian
assistance.
Pakistan
Pakistan has maintained bilateral relations with Russia and Ukraine. But
blockage in the global food supply chain will affect Pakistan like many
other countries across the globe and South Asia. Since the war broke
out, trade value with Ukraine reached USD 800 million, including USD
739 million in imports.61 Pakistan and Ukraine\u2019s imports amounted to
$739.51 million USD in 2021. 62 Respectively in July and November
In 2020, Ukraine was Pakistan\u2019s foremost wheat supplier, exporting 1.2
million tonnes (MT). Within the same time period, Russia provided 0.92
MT to Pakistan. Between 2020 and 2021, wheat shipments from both
states surpassed 2.1 MT. The blockade of Ukrainian ports by Russia has
made it even harder for Ukrainian agriculture and other essential export
markets to reach a variety of countries including Pakistan. That may
lead to serious food security issues in Pakistan in times to come.
As a matter of fact, numerous countries already have observed
shortages of food, forcing Pakistan to pursue a substitute wheat supplier.
Pakistan\u2019s staple crop is wheat, but still it requires imports to
supplement domestic production, and Sri Lanka\u2019s ban on fertiliser
imports have harmed the country\u2019s food production.
Another serious issue Pakistan facing is the high rise in global oil
prices. After the Russian-Ukraine war erupted, global oil prices
skyrocketed to more than US$120 per barrel, but have since fallen to
below US$100 per barrel, as supply and development have slowed.
Pakistan\u2019s imports of fossil fuels from Ukraine, including oil, LNG, and
coal, have ceased. As a result, Pakistanis will face frequent and
prolonged power outages, exorbitant utility bills, and impediments to
other services in the coming months. The crisis would also have a direct
impact on Pakistan\u2019s import of wheat because it comes from Ukraine
and made up 39 per cent of the country\u2019s entire import demand for<\/p>\n\n\n\n
Tribune, July 5, 2022, https:\/\/tribune.com.pk\/story\/2364775\/ukraine-russia-war\u0002implications-for-Pakistan
62 Mirza, \u2015Ukraine, Russia War: Implications for Pakistan.\u2016 Express Tribune.
wheat during the previous fiscal year.63 A prolonged period of high fuel
prices combined with lower foreign exchange receipts and wheat
shortages will quickly deplete any reserves and available food
stockpiles. Due to rising prices, Pakistan will have to tighten their
economic belts for an extended period of time which will have spillover
effects on the masses.
Conclusion
It becomes evident from the above discussion that geopolitics is shaping
geo-economics, and its impact on South Asia is clear in the Russia-Ukraine conflict. The war in Ukraine has political and economic
ramifications for South Asia in the short to medium term. Inflationary
concerns may exacerbate developing countries\u2019 concerns following
COVID-19. Furthermore, rising fuel and energy prices can have a
negative impact on their quality of life and ability to cope with a
competitive world. Consumption and manufacturing issues can have
serious ramifications for the countries involved. In this context, it is
critical to comprehend Moscow\u2019s desire to emulate the Soviet Union\u2019s
glorious international position. However, we must not forget that
Ukraine\u2019s historic right to self-determination is a source of concern for
the modern nation-state system. Furthermore, we cannot continue
ignoring China\u2019s stance on the issue.
Indeed, Russia\u2019s relationship with Ukraine becomes a matter of
Russian national interest and a necessary step toward regaining Russia\u2019s
glorious international position, but it also has a direct impact on global
politics, food security, and energy security, notably for the undeveloped
and developing nations. Liberty to decide and prioritise national
interests over foreign interests may pose a threat to South Asian
developing countries. Unfortunately, South Asian countries cannot
source their energy needs directly from Russia for fear of provoking the
world superpower and its allies. Russia, on the other hand, claims that
perhaps the sanctions have had little impact on it, and we have seen it in
the case of Russia-India energy deals post-February 2022.<\/p>\n\n\n\n
Pakistan,\u2016 Global Village Space, 2022,
https:\/\/www.globalvillagespace.com\/ongoing-ukrainian-conflict-inverse-economic\u0002impacts-on-Pakistan\/
Global Energy and Food Supply Chains
The above discussion highlights that Russia has taken advantage of
global higher oil and gas prices. It has increased its sales to China,
Europe, India, and other markets. Russia is using it as a tool to keep
Europe’s dependence on Russian energy is higher. To completely wean off
from Russian oil and gas Europe require alternate means of energy
resources but all these arrangements require time and patience that
European cold weather does not allow it. European increasingly hostile
stance may provide more opportunities for Russian trade deals with
developing countries such as in the South Asia region on a bilateral
basis. Such as allowing those developing nations to improve and expand
their energy needs and food basket. The world has already witnessed the
way India refused to condemn Russia\u2019s aggression in its energy trade. It
does not stop here as India continues to further enhance its trade
relationship with Russia, particularly on imports of oil at lower prices.
On the other hand, it is in the best interest of Russia to continue offering
oil and energy supplies at competitive prices. With this arrangement,
India remained the prime beneficiary of Russian oil buying at cheap
prices, refining it, and selling at higher prices. Despite the fact, the
Europeans wish to avoid Russian gas they still cannot do so.
In terms of the Russian-Ukraine war, respecting International Law,
sovereignty, and territorial integrity becomes critical, but the war is causing
serious disruptions in global energy and food supply chains exacerbating
existing insecurity in developing economies. This disruption is
demanding states, particularly struggling economies like Pakistan to
balance their choices (for or against the war) based on variables such as
national interest and geopolitical arrangement. Freedom to make
decisions on the world stage must be questioned in light of the fact that
independence in the real polity is far more complex. In the context of the
preceding discussion, Pakistan must consider both sides of the Russia-Ukraine conflict and strive to prioritise its national interests above all
else<\/p>\n\n\n\n