2022 Yearender: The world after Ukraine

Abdel-Moneim Said
Thursday 22 Dec 2022

In a few days, the war in Ukraine will have entered 2023, with no victory or defeat in sight for either side, and no negotiations to offer or eliminate hope of an end to the fighting.


The war is unfolding like every war since the end of World War II: without an off-ramp for either side and, therefore, doomed to drag on or to remain without a stable conclusion.

The Korean war divided that peninsula into a capitalist south and communist north, both armed to the teeth, with nuclear weapons or a nuclear shield among others.

The Vietnamese war created another country divided into north and south. The US took over where the French left off until the US-Russian and US-China accord brought those hostilities to a close, leaving Vietnam to fight a war with China.

The wars in Iraq and Afghanistan, not to mention the Arab-Israeli wars in the Middle East, remain unresolved by war or peace agreements. 

It looks like the war in Ukraine will be no exception to this rule. This is not due to a shortage of ways to prevent or stop a war. The most recent forfeited opportunity occurred when Russia backed out of attending strategic nuclear arms reduction talks that were set to be held in Cairo in late November.

Moscow’s excuse was that the US was bent on harming Russia and that the meeting would be a trap. But then why had Russia originally agreed to attend? Surely the meeting would have at least initiated a process that – who knows? – might have led to meaningful negotiations and a settlement that reflected the weariness of the belligerents and the rest of the world which had thought that 2022 would be a happy year.

When the war began, people had predicted it would last for days. These turned into weeks and then months, once again confirming the adage that, while it is easy to start wars, ending them is another matter. We might hear of diplomatic movements, such as backchannel talks, mediators stepping in or international envoys shuttling here and there, but the result, to judge by fragments of news, has been zilch – despite the occasional nod to the need to be realistic, which means to accept the previously unacceptable. Again it appears that the laws of war are eternal and the world will not go back to how it was before. 

Russia may have come out the worst. It is said to have lost more than 100,000 soldiers and we know nothing about the number of wounded.

The Russians have also lost large quantities of military hardware. The amount is difficult to calculate, but we have seen the images of machinery stranded on the roads or destroyed in the fields of battle.

In purely military terms, Moscow was not up to par for a great power. Its army had not been prepared for this war and its military command did not have a strategy worthy of their name. This applies to both direct engagements with the adversary and preparations of logistics and supply lines. Russia lost the battle for Kyiv, and although it won the battle for the Donbas, where it had been before the war, it quickly lost ground there due to the Ukrainian counteroffensive in the northeast and in Kherson.

Russia’s only recourse was to declare a general mobilisation and to bombard the whole of Ukraine, one town or city after another, and one piece of infrastructure after another, leaving the country without electricity or gas. Russia, in the 21st century, has resorted to scorched earth tactics. 

Russia forfeited strategic ends that it had when it began the war. Those were epitomised in a joint declaration with China on 4 February 2022, challenging the post-Cold War order and American-led globalisation through a number of international organisations and the universal dominance of the dollar. In the UN General Assembly, the world sided with Ukraine in the war. Only a handful of countries, including India and China, abstained, while the only countries that stood with Russia were Syria, North Korea, Iran and Salvador. Russia is isolated to the point that its president did not attend COP27 or the G20.

Ukraine has also lost a lot. It has become a country of refugees with some eight million Ukrainians scattered across Europe and North America. Ukrainian cities have undergone heavy destruction. True, there are pledges for reconstruction as well as accession to the EU, to be paid for confiscated Russian assets in the West, including $300 billion in Russian hard currency reserves as well as billions in assets held by Russian companies and individuals in Western banks. But this will be a major blow to the US and the very globalisation it brought the world. The American and European response to the Russian invasion of Ukraine was economic boycott: withdrawing US capital and firms from Russia, from McDonalds to Apple. 

More importantly, globalisation and the international capitalist order were built on trust in the banking system, the world trade order, the international patent registration system, and internationally recognised investment, bankruptcy and commercial arbitration mechanisms. All that toppled due to US-led actions and then Russian responses, as Moscow used the few economic cards available to it – oil, gas and the ruble – to strangle European countries which had believed that entering into a form of intensive mutual dependency with Russia would prevent war, ensure European security and economic stability, and bring prosperity to the world.

The war in Ukraine destroyed all that in just a few months. It brought nothing but food and energy crises, chaos in the global financial and currency systems, and alarming rates of inflation. Moreover, some countries have reverted to burning coal and Germany has reactivated its nuclear plants to cover its energy deficiency.

The shock of war has also sent political tremors across the globe. Far-right and fascist movements have come to power in Italy and Sweden, following Poland and Hungary’s lead. Trump has returned from “Mar-a-Lago” to announce his bid for the US presidency. Governments are reverting to protectionist measures, aggravating the supply chain blockages that followed the pandemic.

 In a recent article in Foreign Affairs, the eminent economist of Egyptian origin Mohamed Al-Erian discussed three main developments that will combine to make the global economy topsy-turvy and usher in something unfamiliar, taking the place of the usual bouts of inflation (which we are experiencing now) and recession (which economists predict), both of which can be remedied in the short turn. 

The first is the product of the economic impact of the pandemic. The cash grants that were dispersed to keep national economies going generated levels of demand greater than supply. The war in Ukraine effectively poured oil onto this fire due to the economic sanctions and energy war.

The two combined to disrupt supply chains, precipitating a rapid “nearshoring,” the process of transferring production and other economic operations once conducted on distant shores closer to home.  Al-Erian predicts that supply crises will supersede crises in demand, generating higher degrees of uncertainty.

 Secondly, the confusion central banks caused through their fluctuations between interest rate hikes and reductions have propelled the world’s major economies into structural changes such as the unexpected protectionist policies in countries that were the foremost advocates of free trade, most notably the US and the UK. Meanwhile, the war in Ukraine has stymied the G20, the international organisation tasked with overseeing globalised trade and remedying major glitches in the system, and China has spearheaded a trend to disengage economically from the US.

The third development was also a product of the pandemic and the war. The former forced workers and staff to stay at home, while the latter generated widespread lack of confidence in the global economic order. Thus, coming on the heels of the pandemic era disruptions in the labour market, international companies have altered their outlooks and behaviours, shifting from growth strategies, such as technological renewal and sourcing new markets, to the focus on merely staying in the market.

Under such conditions, it is hard to inject fresh blood into globalisation in order to revive the global economy. Ironically, although all this is occurring in a world that is more interconnected than ever, the effects are propelling things in the opposite direction.

*A version of this article appears in print in the 22 December, 2022 edition of Al-Ahram Weekly

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