The new normal?

Raging for almost 150 days now, the Russian war in Ukraine is stubbornly moving ahead, occupying more territory in a gradual manner. After capturing much of Ukraine’s eastern region, Russia has been consolidating in Ukraine’s south in recent weeks. In the war’s first days came the shock to oil prices; now the global food security is under increasing danger as Russia blocks grain shipments from Ukraine’s southern ports. The world outside, especially the poor and low-income countries, are mere bystanders.

There is no sign yet of any peace talks heading to a meaningful breakthrough. On the contrary, both sides are digging in further. Having weathered the barrage of Western sanctions, Russia and its ruthless President Putin have not yet become the pariah that America and Europe had earlier hoped. Meanwhile, Ukraine still has its spirits high, raising a million-strong army backed by Western weapons and cash.

Facing further Russian aggression, the Baltic states are in the process of effectively becoming security states. NATO members are ramping up fiscal spending and operational footprint, too. Global arms dealers should rejoice. But the world is going to be poorer, especially among the developing countries. Rich countries are not only able to withstand the surging commodity prices, they are also able to elbow out the developing world when it comes to accessing energy shipments and grain cargoes.

Soon the war will be six months old, and considering the current hopeless situation where Ukrainian forces cannot realistically be expected to retake all the captured territory, the war is likely to carry on for much longer than that. Learning to live with this war’s consequences, therefore, seems about the only option that the outside world has right now. Putin won’t back down, and West won’t intervene militarily.

The current situation has many observers wonder about the long-term consequences. For instance, considering how authoritarian states’ decisions impact global oil trade and resulting prices, what will the current shortages and rising prices of hydrocarbons mean for renewables? Renewables are the future, but getting there requires speed and investment. Considering the fiscal drain among the governments amid the private balance sheets being affected, those investments and timelines will be delayed.

Then there is the issue of rising prices impacting political stability in developing countries and how the geopolitics plays into it. Episodes like Sri Lanka may be more frequent if availability of basic foods, petrol and power is threatened in developing countries facing balance-of-payment issues. Widespread business failures may occur and fuel further social unrest. There is already a propaganda war going on where the rising global prices and shortages are being blamed on each other by global powers.

As for the West, it is also a few electoral cycles away from instability. In the US where rising prices are also a hot political issue, the Biden presidency has the slimmest majority in recent years; losses in the upcoming mid-term elections may further erode his authority. The British government is already in turmoil. The German ruling coalition is having difficulties governing. In France, the far-right has made strong gains in the legislature, having come close to winning the presidency. In such circumstances of surging inflation and domestic political calculations, can the Western unity against the Russian aggression last?