On 24 February 2023, a year has passed since Russia launched what it calls a special military operation in Ukraine. For its part, the Western side claims that it is an unjustified armed invasion. The main question that arises is: has anything changed in the world?
Personally, I agree with the view that the hysteria – characteristic of liberals in Western societies – is exaggerated. This is because in their framework, they considered this war (or rather the escalation of a war, because the war in Ukraine has been going on since 2014, which the West has been ignoring all these years) to be the destruction of the international “rules-based” order. That latter phrase is little more than a justifcation for US domination over the world order.
If we look at the facts, Ukraine is not a breakthrough, nor merely a subversion of the international order. And it is not the beginning of the end of the unipolar world. We were already past the breakthrough stage.
In fact, the first such breakthrough event was actually the war in Syria – specifically 30 September 2015. The Syrian government had asked for help from Russia, and the latter provided it on that date. This move by Moscow saved the legitimate government of Syria and thwarted what were widely seen as Western plans to change the regime in a sovereign state. The war in Ukraine is, therefore, just another element of the erosion of the global unipolar world order and it is bringing us – probably, because we are unable to predict the future – to a multipolar order. This process has accelerated significantly over the past year.
Significantly, de-dollarisation has accelerated. Since the 1990s, it has been common worldwide to use the US dollar in international trade (i.e. countries bought the US dollar and settled with other countries in this currency, not in their own currencies). As a result of the huge sanctions imposed on Russia by the countries of the West, the countries of the Global South began to look for alternative routes and construct new trade agreements that would allow them to settle in local currencies, bypassing the US dollar (which Russia is currently practically unable to purchase). However, it is important to note that de-dollarisation is a gradual process that is not happening overnight and that the US dollar remains the dominant global reserve currency.
After World War 2, the West avoided direct control (which mean having colonies) over the rest of the world, by using more sublime methods of oppression. In the first instance, this involved the use of financial mechanisms, such as sanctions aimed at destroying the economy of a ‘rebellious’ country that was trying to break free from Western hegemony. However, sanctions rarely bring the intended effect – they ruin the economy, but do not achieve political goals. Quite often, even in a country on which the West imposes sanctions, nationalist and pro-government sentiments increase, which is an understandable reaction in the case of hostile actions by foreign forces. However, usually, the consequences of sanctions are truly terrible for the lives of ordinary people in a given country – just look at Cuba, the DPRK, Iran, Syria, or Venezuela.
However, after a year of constantly expanding sanctions, the Russian economy is still in a workable situation. Despite the sanctions and the war, the Russian economy shrank by only 2.1% in 2022 (the World Bank forecast a decrease of 3.3%). Sanctions against Russia are among the harshest imposed in the last century by Western countries in such a short time.
So why didn’t the Russian economy collapse completely as the West expected? It was mainly through the rapid diversification of its economic contacts – by importing consumer goods mainly from China, Kazakhstan and Turkey, or through them. In addition, since 2014 (i.e. since the annexation of Crimea), when relations between Russia and the West began to deteriorate, the country began to significantly reduce its foreign debt (significantly reducing its dependence on the West), accumulated foreign exchange reserves – over $600 billion in gold, US dollars and other currencies, mainly earned on oil and gas exports. Also in 2014, Russia began developing an alternative to SWIFT, the communications network that underpins global financial transactions.
Moscow has also found an alternative to selling its fuels, oil, or gas – e.g. alternative customers in India and China). The jump in the prices of energy resources in 2022 additionally inflated the Russian budget. Europe, despite the imposition of further sanctions, was still forced to pay for Russian gas (they could not cut off from it overnight). As a result, in 2022 oil and gas revenues as a contribution to the Russian budget actually increased by 28%. Through the year, Russia’s current account surplus—the difference between money entering and money leaving the country—hit a record high of $227 billion. Sanctions and military spending notwithstanding, Russia grew flush with cash.
Of course, this does not mean that Russia is in a good economic situation – it just did not experience the catastrophe that the West hoped for. Inflation and the crisis are taking their toll in Russia, though much less than in Western countries. Cutting off from trade with the West also caused significant problems for Russia in obtaining modern technology, which resulted in a decrease in car production by 60% compared to 2021. In addition, the development prospects for 2023 are not optimistic – if only because during the war, people in Russia now spend much less on consumption, which may lead to economic stagnation.
Over the past year, apart from the surprising strength of the Russian economy, we have also witnessed a festival of Western hypocrisy and ugly moves by the Ukrainian side. President Zelensky used the war to deal with his political opponents – he banned many opposition parties and trade unions (officially claiming that they were “pro-Russian”), and also took control of the media. This is all the more shocking because Western propaganda presents this war as a struggle between “democracy” as symbolised by Ukraine – which in 2021 was described by the same media as the most corrupt country in Europe – and “authoritarianism” as symbolised by Russia. Speaking of almost comical moves by the Ukrainian side, it is worth mentioning that the Central Bank of Ukraine issued. a commemorative banknote on the occasion of the first anniversary of what it describes as the “Russian invasion.” Throughout the last year, Zelensky also became a Western celebrity, addressing his speeches and gestures mainly to a Western audience.
Undoubtedly, this ongoing full-scale war – although to be precise, military operations take place almost exclusively in eastern Ukraine, while the western part of the country functions practically normally – is a tragedy for ordinary people. The World Bank estimates that Ukraine’s GDP has shrunk by 35% in 2022. It was forecast in October that the share of the population with incomes below the national poverty line would increase to almost 60% by the end of last year. According to recent estimates by the Kiev School of Economics, the total damage to Ukraine’s infrastructure was $138 billion, while President Zelensky estimated that rebuilding the country could cost more than $1 trillion.
In addition, the huge “help” from the West to Ukraine over the past year is largely not a donation, but loans. Thus, Ukraine’s economy and its sovereignty is already completely seized by Western capital. In July 2022 in Switzerland at the so-called “Conference on the Reconstruction of Ukraine,” Western states planned a series of harsh neoliberal policies to be imposed on post-war Ukraine, calling for restrictions on labour laws, “opening of markets,” removal of tariffs, deregulation of industry and “sale of state enterprises” to private investors.
Despite being in such a tragic situation of conflict, the Ukrainian authorities are gradually meeting the policy expectations of the West. In 2022, the parliament of Ukraine adopted several extremely anti-worker laws. Of course, due to the ongoing war, no one expects the work system to remain unchanged, but these moves have pushed the situation of Ukrainian workers almost to the situation of the 19th century, where the employee was nothing compared to the employer. It can be argued that this whole war has become a pretext for implementing really brutal neoliberal measures. As stated in an article in The American Prospect: Ukrainian government announced a streamlined process for privatisation, which has limited the conditions that the state can place on the buyers of public assets. Some 420 state-owned enterprises have so far been identified for sale. The first of the privatisation auctions took place last September with some property of the state brewery company UKRSPYRT sold off. “The state should not manage businesses—a private owner will do it much more efficiently,” said Yuliia Svyrydenko, Ukraine’s minister of economy, in a press release entitled “Privatisation Has Been Restored.”
The government of Ukraine also has plans to further reduce taxes (i.e. to make life easier for businessmen by reducing their budget revenues). Therefore, in my opinion, the economic actions of the Ukrainian authorities can even be treated as a class war against their own people. Instead of trying to relieve their citizens from the suffering of war, they prefer to satisfy the expectations of Western creditors.
A few days before the anniversary, Russian President Vladimir Putin gave a State of the Union speech, and a few hours later US President Joe Biden also gave his speech during his visit to Poland. Analysts expected some breakthroughs – perhaps an announcement of a new initiative from the Russian side (due to the lack of clear progress on the front), and from the American side, perhaps a firm declaration of continued military support for Ukraine.
However, both speeches were completely bland. Both Biden and Putin did not say anything new, they did not make any specific declarations, and they just repeated the rhetoric that both sides had been uttering for a year. Also, both the West and Russia have entrenched themselves in their positions, pushing away the prospects of a quick end to this conflict.
So has the last year brought us into a multipolar world order? Arguably, not at the moment.
Of course, the change is visible, but one ought to be cautious before describing it as multipolar yet. Many countries in the world have realised that they must look for alternatives, rather than economic reliance on relations with the West. Even countries as close to the West as India and Saudi Arabia have significantly diversified their trade relations.
Regardless of how we characterise the current world order, a distinct process of the decline of Western domination has begun. The world is moving towards multipolarity, but it is a process much more complex, slow and difficult – each change of the world order brings much chaos – than we could expect in our idealised, theoretical constructions.