Where will the Russia-Ukraine war go?

The fighting between Russia and Ukraine has entered its eighth week. But the war situation is still very vague. The two sides maintain the strategy of fighting and talking and still cannot come to an agreement on a peaceful solution.

As the hostilities continued, the losses on both sides continued to increase day by day.

Economic decline

In a speech to the Russian State Duma last week, Russian Prime Minister Mikhail Mishustin admitted that the country is facing the most difficult situation in 30 years due to unprecedented sanctions by the West.

“Undoubtedly, the current situation can be considered the most difficult in the last 30 years for Russia. Such sanctions were not used even in the darkest period of the War. Cold Painting”, Mr. Mishustin said.

After Russia launched a military campaign in Ukraine, the US and its allies imposed a series of sanctions on Moscow with three main prongs.

The first sanction is to remove Russia from international systems, typically by blocking the connection of some Russian banks from the SWIFT international payment system. The United States, Europe and Japan have also frozen more than half of Russia’s $630 billion in foreign exchange reserves, leaving Moscow with few safe places to turn oil and gas revenues into dollars and rubles.

The second round of sanctions is to cut ties with certain Russian businesses and industries.

In March, the US announced a ban on all oil and gas imports from Russia into the US. The move affects Russian imports of oil, liquefied natural gas and coal. A few days later, the US also banned the import of seafood, vodka and diamonds from Russia.

Following in the footsteps of the US, the UK announced that by the end of the year it would stop importing oil from Russia. Germany meanwhile confirmed it will cut energy imports from Aries.

High-end exports to Russia, including luxury watches, cars and alcohol, are also on the US and European allies’ ban lists. The White House estimates these exports can bring Russia $ 550 million a year. This is the second direction of punishment.

The third direction of sanctions is to target the Russian elite through individual sanctions. The West has put a series of tycoons and billionaires believed to have close ties to President Putin on the sanctions list.

The US, UK, EU and Canada freeze the assets of Russian billionaires, banning them from conducting business activities in their countries. Several US lawmakers recently called for legislation that would allow the federal government to seize assets worth more than $5 million from Russian oligarchs, such as real estate and yachts.

This measure was applied by a series of Germany, Italy, and France with the seizure of a series of expensive super boats of the Russian oligarchs.

After this unprecedented series of sanctions, the value of the Russian ruble plummeted.

At one point, the exchange rate of the ruble against the dollar jumped to 136.5 to 1. This rate before Russia launched the campaign in Ukraine was 80 rubles to 1 USD.

However, after a series of corrective measures by the Central Bank of Russia, the ruble has begun to recover. The turmoil in the market also gradually subsided. Despite a series of harsh sanctions, Russia’s revenue from gas and oil has not been significantly restricted.

However, the World Bank (WB) still forecasts that Russia’s economy in 2022 will shrink by 11% this year.

Meanwhile, the World Bank estimates that Ukraine’s economy has shrunk by nearly half due to the war.

“Ukraine’s economy is forecast to shrink by about 45.1% this year. The actual extent of the decline will depend on how long and how severe the war situation is.” The World Bank wrote in its report on April 10.

Ukrainian media in early April quoted data from the Ukrainian Economy Ministry as saying that the total direct damage to Kiev so far due to the conflict with Russia amounted to 565 billion USD.

“According to our latest estimates, direct damage now amounts to $565 billion, including $119 billion in infrastructure and $91 billion in civilian damage. Due to conflict, Ukraine has lost 54 billion USD of investment capital. Deputy Economy Minister of Ukraine Ihor Diadiura said.

According to calculations by the Ministry of Economy of Ukraine, this year’s loss to the country’s GDP will amount to at least 112 billion USD, down more than 55% compared to last year.

The Ukrainian government is also likely to lose $48 billion in tax revenue, or nearly all of it, this year. Meanwhile, $ 54 billion in foreign direct investment has not been able to reach Ukraine since the conflict with Russia broke out.

“It’s important to note that the numbers change from day to day and unfortunately they are increasing,” he said. Ukraine’s Economy Minister Yulia Svyrydenko admitted.

In a statement on April 18, Ukraine’s Infrastructure Minister Oleksander Kubrakov said that Russia’s special operation damaged or destroyed 30% of Ukraine’s infrastructure with losses of up to 100 billion USD.

Accordingly, more than 300 bridges on roads in Ukraine were destroyed or damaged, more than 8,000km of roads needed to be repaired or rebuilt, dozens of railway bridges were destroyed.

Mr. Kubrakov hopes Western countries will support Ukraine’s reconstruction with funding that can be obtained from many sources and the first source is Russian assets that are frozen in almost all major countries. .

Many EU politicians are now calling on the bloc to use Russian assets frozen by the West, including $300 billion in reserves of the Russian central bank, to help rebuild Ukraine.

When will the war end?

Experts assess the economic future of both Ukraine and Russia is still very unclear, as the end of the Russia-Ukraine conflict is still a question mark. Not to mention Russia recently announced the start of the second phase of its special military operation in Ukraine.

If the war continues, the infrastructure system in Ukraine will suffer further damage while the Russian economy is likely to sink into recession due to the tightening of already harsh Western sanctions.

Both sides have recently downplayed the prospect of a peace deal. President Putin said on April 12 that negotiations between the two sides had once again reached a dead end while his Ukrainian counterpart Volodymyr Zelensky even threatened to cancel all negotiations with Moscow.

In recent weeks, Russia’s demands on the negotiating table appear to have shifted. Moscow no longer talks too much about the possibility of Ukraine joining NATO or Kiev allowing foreign countries to deploy military bases or weapons systems. Russia’s priorities now focus on Ukraine’s denuclearization and neutrality.

According to experts, the current goals of Russia in Ukraine are to control the city of Mariupol, expand the self-proclaimed republics in the Donbass region to the limits of their administrative borders, maintain a military presence permanent residence in Kherson to ensure an adequate supply of fresh water to Crimea, to protect the bridge connecting the separatist-controlled territories in the Donbass with the Crimean peninsula along the Azov and Kherson coast lines. These are necessary and sufficient conditions for Russia to declare victory and end the campaign.

For its part, Ukraine wants to return to its pre-war status, which means that Russian troops will withdraw from their positions. In particular, Kiev wants Russia to withdraw its troops from the self-proclaimed republics in the Donbass that Moscow has recognized as independent. In return, it appears to accept concessions on joining NATO and is ready to negotiate neutrality with foreign guarantors, including Russia.

On April 19, Russia announced that its military operation in Ukraine had entered a new phase with the goal of liberating Donetsk and Lugansk, two breakaway territories in the Donbass.

“A new phase of the operation (in eastern Ukraine) has begun and I am sure it will be a very important moment in this entire special military operation.”Russian Foreign Minister Sergei Lavrov affirmed.

President Zelensky also confirmed that Russian troops had started the battle in Donbas, and affirmed that Ukraine would resist and defend itself.

Experts say that what happens in Donbass in the coming days will determine the current battle situation. It is not excluded that this will be the fiercest battle since Russia launched its military in Ukraine.