Three lessons from two years
Hard new questions for policy makers in a post-ukraine War world
In the two years since the Russian Federation sent tanks into Ukraine, how has the world changed? What are the implications for future national policies, both geopolitical and geo-economic? Is this simply a European war with few implications for the rest of us, as long as we can manage the spillovers into food and fuel supply chains? I think not. There are in fact three trends that will need us to shift how we think about policies at the national level, particularly in India.
First, the world is more — not less — fragmented than earlier. There was a sense in 2021 that the world was moving swiftly towards a new Cold War, with two blocs in competition. The West and the People’s Republic of China were interconnected but seemed to have incompatible systems; and they were drawing to themselves, or seeking out, like-minded countries to create new alliances in opposition to each other.
This process may have broken down. The largest component of any pro-beijing bloc, Russia, may have taken up arms against what it perceives to be the West; but few Russians would agree this means they wish to become dependent upon China. To be anti-west does not mean that you are pro-beijing. Yes, China has become far more important for Russia as an economic and political partner than earlier; but Moscow is also freshly conscious of its status as the centre of an independent sphere of influence. Meanwhile, Beijing — which prizes stability — has been reminded of the unpredictability of its giant northern neighbour.
It is also commonly argued that the transatlantic relationship has grown stronger. The North Atlantic Treaty Organization, for example, has expanded. President Joe Biden of the United States has been careful to ensure Washington’s outreach to its European allies on security matters has expanded. But it is possible that this too misses the longer-term trends. The Russian invasion has reminded Europe of the need for it to develop hard power; and, meanwhile, the act of supporting Ukraine — and thereby underwriting European security — is less and less popular in the United States. The natural endpoint of these processes is a Europe less able to rely on Washington and more incentivised to make its own way in the world. The Americans are helping this process along economically by enhancing their own industrial policy and subsidising their own industry at the expense of European competitors.
Meanwhile, some countries — such as India — which appeared to be slowly shifting into an anti-beijing (and thus pro-west) position in global affairs have had this progress slowed by the success domestically of a promoscow narrative over the past two years. Instead of a consolidation with the West around a defence of sovereignty — such a defence being long the primary pillar of India’s interventions in world affairs — the Indian government has been at pains to demonstrate its independence from Western approaches to the Ukraine war. Policies, in India and beyond, have shifted towards asserting autonomy and independence from both possible poles of a bipolar order — and thus made a bipolar order less likely.
Second, the rules of war-fighting seem to have changed. First the Ukrainians and now the Russians have launched offensives that largely failed thanks to enormous, First World War-style entrenchments. The air war that so determined the victories of Usled coalitions in the past decades was largely absent in terms of deciding outcomes in the battlefield, although missiles continued to rain down on unprotected Ukrainian cities. Instead of air cover, control of the front could be determined by much cheaper unmanned aerial vehicles.
Similar drones have been used to reduce the efficacy of Russia’s Black Sea Fleet. Indeed, cheaper methods of sea denial are also being experimented with by the Houthi rebels in the Red Sea. The broader implications of this are troubling. A reduction in the cost of war-fighting lowers the threshold for military action. It allows for non-state agents and private military companies to become players once again. The difficulty of maintaining secure supply lines will have increased.
Thus, not just the invasion but the actual process of fighting the Ukrainian war may have heralded a new and more disordered world. National policies will have to privilege more basic tasks of security that have been perhaps forgotten during the past decades.
The final implication for policy is that the international financial system, once regarded as a public good or at least one of the global commons, is now viewed as too easily weaponised by the West. The early shutdowns of the SWIFT global banking transmission system played into existing fears, born out of earlier rounds of sanctions on countries like Iran, that the pipelines of global finance were too easily captured by state power. A Rubicon will be crossed if the Russian central bank’s hundreds of billions of dollars of reserves in the West are confiscated. On the one hand this is tempting, especially when the Ukrainian war effort is running out of resources in part thanks to political dysfunction in the United States. On the other hand, it will unquestionably weaken one of the pillars of the global order that the West claims to wish to defend. The policy implications for central banking and financial stability are unclear but could certainly be significant.
The Indian government has been forced to respond rhetorically to the crisis that exploded two years ago. But it has chosen to frame it as a European problem with global spillovers. In fact, the Ukrainian war has exposed some global trends, accelerated others, and slowed yet others. This will need a more considered policy approach from realms from the military to the financial than has so far been on offer in New Delhi. Even if there is a stalemate in Ukraine, or a peace settlement — the latter of which seems unlikely — there is no returning to the status quo ante. The new postukraine normalcy will need a different set of policies if national and economic security is to be maintained.