Many people assumed that when Russia’s president, Vladimir Putin, began sending thousands of soldiers and tanks to Ukraine’s border, he was simply making a show of force. The two countries share many similarities and were once very close. In addition, Ukraine is a massive country, nearly twice the size of Germany.
However, on February 24, the Russian army began to enter and bomb Ukraine. Relations between the two countries had been deteriorating for at least eight years prior to these actions. In 2014, people in Kyiv, Ukraine’s capital, began to demand greater freedom and closer ties with the European Union. Even the Ukrainian president, a friend of Russia at the time, was forced to flee.
Shortly after, Russia invaded Crimea, a part of Ukraine that it claimed as its own. War erupted in another region of Ukraine’s east, the Donbass, between those who wanted to move closer to Russia and those who feared that Ukraine would be divided. For eight years, several countries attempted to mediate peace between Ukrainian citizens. They were not, however, successful.
Vladimir Putin has now stated that he wants to defend Ukrainians who identify more as Russian. They were “threatened,” he said, and needed Russia’s help. He has, however, provided a slew of other justifications that obscure his true intentions. For example, Russia’s president does not appear to fully recognize Ukraine’s right to independence from Russia. He also believes that if Ukraine moves closer to Western Europe, especially if it joins NATO, Russia will be surrounded by foes.
Russia used to be a vast empire that extended far beyond its current borders. Putin believes that he must always maintain special ties with the other countries that comprised this empire, according to his statements. However, the vast majority of Ukrainians disagree and are prepared to defend their country.
The Russian army’s “military operation” in Ukraine is in its fourth week. How might the conflict develop? Here are four of the most likely scenarios, along with their economic implications.
Scenario 1: A Russian Military Victory – But at What Price?
Military experts believe that a Russian victory is still the most likely outcome. Despite the stubborn resistance of the Ukrainians, the now noticeable limitations of the invading forces, and flaws in the Kremlin’s original plan, the balance of power remains overwhelmingly in favor of Vladimir Putin’s army. Following the failure of their gamble on Kyiv at the end of February, as well as the very slow advance of a massive military convoy north of the capital, Russian forces have continued to advance on other, less publicized fronts, particularly in southern Ukraine.
By way of comparison, after a week of war, the United States had not yet taken the southern cities of Basra and Nasiriyah when it invaded Iraq in 2003. The U.S. army was still a long way from Baghdad, which was eventually taken less than a month after the offensive began.
The Kremlin claims that the operation aims for the “demilitarization and denazification of Ukraine,” in the image of the Americans, who were talking about “de-Baathifying” Iraq at the time, referring to Saddam Hussein’s Baath party. The Russian war objectives appear to be maximalist, but they are vague enough to raise questions about the true intentions of the Kremlin’s master. The crushing of the Ukrainian army raises concerns about long weeks of intense warfare and tens of thousands of civilian casualties. This scenario will put Western leaders under tremendous strain. They will be called upon to intervene further in order to avoid a full-fledged war with Russia.
In the context of a weakened and decapitated Ukraine, the question of what will happen to Vladimir Putin and his troops arises. When launching the invasion, Russian President Putin stated that he had no intention of “occupying Ukrainian territory.” If he is successful in deposing Volodymyr Zelensky, he will replace him with a leader who will be at his beck and call. Only pro-Russian countries such as Belarus, Venezuela, Nicaragua, and Cuba would recognize such a regime. This is the scenario that would most isolate Putin on the international stage.
Would the war in Ukraine be over? The Iraqi experience is unequivocal, as is any military occupation by a foreign army. Confrontations always end in favor of the insurgents, who have the backing of the local population. In this regard, the Russian army’s initial occupations in the localities are concerning. The population, brought together by the invasion, is protesting against the occupiers. The repression, already underway, will swell the ranks of growing guerrilla groups. Vladimir Putin may hope that a new pro-Russian regime will do the dirty work against the Ukrainian resistance, but it is difficult to imagine that it will be able to do so without Russian troops.
The guerrillas will be fueled by European arms shipments. Even if the Russian army invades western Ukraine, which it has not yet done, the Ukrainian borders are vast and difficult to control. European countries’ portable anti-tank and anti-aircraft missiles are already designed for guerrilla warfare. Russia will also have to stop the influx of foreign fighters, as Volodymyr Zelensky’s “foreign legion” claimed 16,000 fighters only one week after the invasion began.
If Russia ends up winning, Western sanctions would be maintained, if not strengthened. Russian banks would be cut off from the Swift international payment system entirely. The European Union (EU), a long-time client of Russian gas and oil, would no longer import it, depriving Russia of its primary revenue source. Russia and “annexed” Ukraine would also be unable to export mining and agricultural raw materials to Europe. Some of these resources would be absorbed by China, but this would not prevent the two economies from collapsing into hyperinflation. The ruble would collapse, and the purchasing power of both countries would plummet.
In economic terms, the best-case scenario
By agreeing to buy oil and gas from alternative suppliers (the U.S., Norway, and Algeria), often of lower quality but at a higher price due to increased global demand, the EU would face inflation, which was already high prior to the invasion of Ukraine. Furthermore, due to a lack of raw materials imported from Russia, such as aluminum, iron, and nickel, European firms would slow production. The unemployment rate would soar.
Scenario 2: The Instability of a Negotiated Solution
Since the beginning of the invasion, Russian and Ukrainian negotiators have met a few times in Belarus. As a result, a diplomatic channel between the two parties has been established. However, there isn’t much to look forward to from these discussions for the time being. Vladimir Putin and his army remain intent on annihilating the Ukrainian army.
Recognition of Crimea’s annexation
Following a phone call with Putin, French President Emmanuel Macron concluded that the worst was “yet to come” if Ukraine did not accept the Kremlin’s terms. Macron is one of Vladimir Putin’s last Western interlocutors. On March 3, Ukrainian President Zelensky reiterated his desire to negotiate directly with Vladimir Putin. “This is the only way to bring the war to an end,” he warned.
The Ukrainians’ resistance is encouraging the Kyiv government. President Zelensky has made the end of the invasion and the withdrawal of Russian troops a precondition for any future talks. Only a ceasefire could create the bare minimum of conditions for substantive talks. On January 31, during a phone call with Emmanuel Macron, the Russian President mentioned international recognition of Russia’s annexation of Crimea as a prerequisite for beginning negotiations. At this point, these are just words as long as the fighting continues to escalate and Russian bombing intensifies in order to break the Ukrainians. We’ll probably have to wait for the fighting to stop before taking the diplomatic route.
The southern front, strategic for the Russians
Until then, Russian forces are primarily advancing in southern Ukraine. Kherson, a port city with a population of 300,000 people before the war, fell on March 2. It was the first city of this size conquered by Russian forces. The latter have also joined forces with the separatist republics of the Donbass in the east, first encircling and then taking control of the strategic port of Mariupol. As a result, the Russian army is consolidating a territorial corridor across the Crimean Peninsula, which it annexed in 2014.
The southern front is strategically important for Moscow. Russia had already constructed a bridge connecting the Russian Federation to the landlocked peninsula. However, the latter, where the Russian fleet is anchored, is still vulnerable. The Russian army took control of a canal to restore Crimea’s water supply on the first day of the invasion.
What’s left of Ukraine pushed toward NATO
Can Vladimir Putin be satisfied with these limited territorial gains if he fails to unseat President Zelensky? The Kremlin’s intentions will be revealed by the Russian offensive’s next moves. A landing attempt has already been made to take the city of Odessa, which is located further west. After losing control of Crimea, Ukraine would be completely cut off from the Black Sea.
This is the scenario for Ukraine’s partition. The Dnieper River in this vast country could also serve as a new border between the Russian-controlled east and the western part of Ukraine, from which the Ukrainian government would withdraw. In this case, however, Putin will only push what remains of Ukraine westward. Could this configuration be stable? Or will it be just another step in Russia’s dismemberment of its neighbor, to be continued at a later date?
Economically, the best-case scenario
We would return to the situation before February 24 because this would be a negotiated solution accepted by all parties involved. Sanctions would be repealed. Russia and Ukraine would resume energy and other raw material production and exports. Russian banks would re-join the Swift international payment system. Foreign investors would return as well. Commodity prices would fall, the ruble would strengthen, the Russian stock exchange would reopen, and inflation would level off.
This geopolitical ‘détente’ scenario is politically debatable, but it would have the least impact on the global economy. Prices, beginning with energy, would level off. Economic activity would pick up, as would consumption and, eventually, growth.
Scenario 3: Russia Decides to Expand the Conflict to the Western Ukraine
This is one of NATO’s most feared scenarios: an armored assault supported by Su-25SM3 ground attack aircraft based at the Belarusian airport of Brest (the former Brest-Litovsk) to cut off the resistance’s communication and supply routes in western Ukraine and catch Kyiv off guard. This is a feared scenario because it would result in the withdrawal of Ukrainian forces to the Polish border and the interception of European arms convoys by the Russian army. As long as Russia focuses its offensive on eastern Ukraine, the risk of contagion to neighboring European countries remains low. However, if Russian troops approach Lviv, which is 70 kilometers from Poland, the slightest misstep could have disastrous consequences.
The west of the country is spared
This threat, in which Russian forces would destroy cities and infrastructure near the EU, is unlikely. Western Ukraine has been spared because Moscow would rather not open a new front or even allow civilians to flee while its troops face unexpected resistance. Kyiv appears to be the top priority, and the western bypass to secure the capital could take place between Zhytomyr and the Dnieper River.
Three other risks of conflict extension are being considered. The first is Russian artillery shelling towards the west, in an attempt to dissuade Ukrainian forces stationed in this area from assisting Kyiv. If a misguided missile detonates in Poland, Slovakia, Hungary, or Romania – all NATO members – the question of retaliation arises. This would be the beginning of a difficult-to-control spiral.
Nuclear weapons: an irrational threat
The second risk, which is being discussed more and more in Warsaw and Budapest, is Putin’s irrational decision to use tactical nuclear weapons to force Ukraine to surrender. Russian nuclear doctrine isn’t just defensive. The use of nuclear weapons has a broader range and could target key military assets of the enemy. The Iskander SRBM (Short-Range Ballistic Missile) with a range of 500 kilometers and a payload of 480 to 700 kilograms of High Explosive (HE) or a tactical nuclear warhead could then be used as the delivery vehicle. Such a military move by Russia would immediately plunge the parties into a conflict on a completely different scale.
Is a regionalization of the conflict on the horizon?
The third risk is the occurrence of an air incident. Air superiority appears to be a given for the Russians in the Ukrainian sky, as nothing has been attempted – via drones or planes – to strike the Kremlin-assembled column of armored vehicles north of Kyiv in several days. The idea of “lending” European or American aircraft to Ukrainian pilots was floated, but it appears to have been abandoned.
The arrival of foreign brigades in Ukraine could ultimately lead to an extension of the conflict. In recent days, minibuses have begun to transport young Europeans from Warsaw’s central station who are eager to fight but lack the necessary equipment. The internationalization of the troops involved raises the risk of the conflict becoming regionalized. The capture of these recruits by the Russian army would provide Moscow with a superb propaganda tool at a time when Putin is losing the war of words and images. It could also be used as a bargaining chip with European countries, as the Bosnian Serbs did with the capture of two French pilots during the Balkan war in August 1995. There remains the triggering by Russia of widespread cyberattacks. However, this conflict, which is likely to be limited to computer servers, is probably already in progress.
Economic consequences of prolonged sanctions
Sanctions will be tightened in this third scenario. Oil, gas, and other commodity production will come to a halt, causing global prices to skyrocket due to a lack of supply. The EU will gradually enter into stagflation, putting growth at risk. Investor and consumer confidence will suffer as a result of uncertainty.
Central banks will be reluctant to raise interest rates in order to avoid dampening economic activity. This is a repeat of the 1970s when unemployment was at an all-time high. The world economy is just recovering from the effects of the coronavirus pandemic, which lasted two years. The stagnation will also harm a large number of countries, particularly those in the Middle East and Africa, which are traditional consumers of Russian and Ukrainian cereals. Both account for 30% of global production.
China could help Russia by importing its oil and gas, but it cannot replace the EU, which consumes up to 40% of Russian output. The Russian people’s descent into hell will only be accelerated.
Scenario 4: One War Too Many for Vladimir Putin
Vladimir Putin’s defeat could take many forms. Even the greatest military victories, however, will leave a bitter taste in the Russians’ mouths. Whatever the outcome, the fighting will be extremely expensive for Russia and its leaders.
According to some testimonies of Russian soldiers taken prisoner, the first two weeks of the invasion revealed that morale among Russian troops was low. Few were aware of the scope of the invasion. However, it is difficult to fight a war with soldiers who are dragging their boots.
The Russian general staff needed a short and clean war to try to minimize the Russian population’s dissatisfaction with the attack on the Ukrainian people. But, of course, it will not be.
Furthermore, even though it is difficult to estimate, the number of soldiers killed could already be in the thousands. Svetlana Alexievitch detailed the horror and desolation caused by the Soviet war in Afghanistan in her 1989 book Boys in Zinc. The consequences were such that this war became known as “the tomb of the Soviet Union,” to use a well-known phrase.
Despite the heavy burden on Russia, particularly in terms of press freedom, the pressure on the Kremlin’s leadership will increase as the bodies of the soldiers line up in coffins once more. Faced with a recalcitrant Ukrainian population and an organized guerrilla movement, the Russian occupation forces may find themselves in a quagmire, subject to constant threats, regardless of the military balance of power. Russia had to crush Chechnya for a decade before submitting the entire territory to its will. Kyiv is four times the size of Grozny, the Caucasian republic’s capital.
Officially, Vladimir Putin can hope to remain president of the Russian Federation until 2036, thanks to a constitutional amendment passed in 2020. In the event of defeat, he would attempt to save face. However, with the Internet, social networks, and the close ties that still exist between some Russian and Ukrainian populations, the wall of silence that Svetlana Alexievitch managed to breakthrough at the time will be even more difficult to maintain.
Despite some 6,000 arrests, Russia is already facing opposition in the country’s major cities. Russian oligarchs and other members of the elite will live in a country that has become isolated and a pariah to much of the rest of the world, at least for the time being.
The sanctions will have an impact on the population’s standard of living, most likely resulting in a long-term decline in social benefits, medical care, and access to services and technology. Vladimir Putin declared a few years ago that Russia intends to catch the Chinese winds in the Russian economy’s sails. However, if Russia continues to have the support of the world’s wealthiest countries, this will be insufficient.
Is it possible that the “Putin system” will come to an end? Is a palace rebellion on the horizon? Some Westerners are betting on it. However, it will undoubtedly come at the end of a particularly difficult road for the Russians. Already, former Russian President Dmitry Medvedev, has rejoiced at the idea that, suspended from the Council of Europe, Russia could introduce the death penalty for “dangerous criminals”. “We don’t need diplomatic ties with the West,” he swaggered, “we will look at each other with binoculars.”
Salvation through Failure
Even if the invasion of Ukraine proves disastrous for Moscow, the countries allied with Ukraine are banding together to find a way out that ensures long-term stability. China, as it proposed on March 2, could then act as a mediator. In this scenario of a Russian defeat, Vladimir Putin’s successor would seek to re-establish Russia and move closer to the EU and the U.S.
The sanctions would then be gradually reduced. Investors would return to Russia and Ukraine, and business would resume as usual. Once more, Russia would become an important partner for the EU once more. Russian oil and gas would be exported and shipped to long-standing customers. Multinational energy firms would return to Russia, production would resume, and prices would fall.
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