Economic realities of the Russian-Ukraine conflict

Economic realities of the Russian-Ukraine conflict

Getting into the Crimea, Russia did settle not only “va-bank” in the geopolitical relations with The West but also tried to create new game rules on the economic plane in the region. Of course, Moscow was warned beforehand it would face economic and as well as political sanctions. Though the West repeatedly informed Russia about such issues before the conflict even started Moscow initiated such a risky game because of strategic economic calculations made on Crimea. Understandably, Moscow failed to concede the economic loss of Ukraine. Kiev’s absence in such projects led by Moscow, would be only informal meaning. Ukraine’s participation has kept Moscow’s plans centered on the Customs Union.

It was crystal clear that, the Customs Union formulated to be a substantial institution couldn’t possibly be so with only countries such as Armenia, Belarus, and Kyrgyzstan highly intending to become member countries. The GDP of Ukraine is around 176,4 billion USD which is more than double the combined GDPs of Armenia (9,9 billion USD), Belarus (63,3 billion USD), and Kyrgyzstan (6,5 billion USD) totaled together. Moscow also knew well that, as the largest country in terms of its territory in Europe, Ukraine should play a significant role in the projects of the Customs Union. On the other hand, Russia losing control of Ukraine would have a domino effect on the other Eastern Partnership Countries, as the control on those countries would be lost as well. So, as not to lose out on the game gradually, Moldova, Georgia, Azerbaijan, and later Belarus, and Armenia would be included in the West. For that reason, while also busy with Sochi Olympic Games, Russia engaged in order not being knocked out of the game completely.

According to the International Transparency report, Russia scored only 28 out 100 points and ranked 127 among 175 countries. Under these conditions, Russia places high importance on the sanctions of the West, but a reasonable question is, why did Moscow raise Russia’s flag in Crimea despite the menace of the West?

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