Akinterinwa: Russian-Ukrainian war has created scarcity in various domains
Prof. Bola Akinterinwa is the President/Director-General of the Bolytag Centre for International Diplomacy and Strategic Studies (BOCIDASS). A former Director General of the Nigerian Institute of International Affairs (NIIA), he spoke with DEBO OLADIMEJI on the impact of the Russian-Ukrainian war on the global economy, pointing out in details how the war has particularly affected Nigeria and what her citizens should expect as long as the conflict persists.
Countries, including Nigeria, are witnessing rising inflation. What has it to do with the Russian-Ukrainian war?
Rising inflation in Nigeria and elsewhere has much to do with the Russian-Ukrainian war in several ways. First, when an event takes place in any given place, there is always the domino effect, no matter how minute. When a statement is made by an important public figure in a country, it is internationally reported. People in other countries can listen to the statement in the comfort of their homes. Based on that statement, new opinions are formed: there can be agreement or disagreement with and even condemnation. This is a permissible interference. If the statement is about a government’s intention to raise taxes or nationalise some businesses, international stakeholders cannot but be so concerned.
The issue of the rising inflation is not different because it is not limited by territorial boundaries. Goods are manufactured in one country. The buyers are in another country. The instruments of payment are administered elsewhere. This is a message that the Russo-Ukrainian war has communicated to the world: messages of disruption in the domestic and global order with all their attendant implications in Ukraine; disruption of demand and supply in European Union (EU) countries; disruption of import and export, disruption in international communications, disruption in social services, in other countries of the world, etc. The domino effects can largely explain the inflationary trend you raised.
Secondly, Russia and Ukraine are Nigeria’s neighbours by the rule of geopolitical propinquity, that is, by shared political values, by rules of interdependence and by obligations of peaceful coexistence with one another. Without any whiff of doubt, the Russo-Ukrainian war is a breach of the rule of living in peace with one another. All signatories to the UN Charter are obligated to always sustain the spirit and objectives of the UN Charter. This simply means that whatever obtains in Russia and Ukraine necessarily concerns all the other members of the international community. The Russian special military intervention in Ukraine cannot therefore be considered as falling within the purview of domestic competence of Russia or Ukraine going by Article 2(7) of the United Nations Charter. Consequently, by living peacefully and because all the countries of the world are also interdependent and are compelled to offer what they have in exchange for what they do not have for survival, inflation as an issue cannot but be of general concern. In fact, Nigeria is a trading partner of both Russia and Ukraine.
Since the inception of the United Nations in 1945, international efforts have been made to prevent a new scourge of world war. By so doing, any threats of inter-state war are always quickly nipped in the bud because of the implications for instability in various ramifications. However, the Russo-Ukrainian war has not been prevented. It is also deepening to the extent that fears of a nuclear war are no longer ruled out. All the efforts being deployed are very costly. And, in fact, the Russian-Ukrainian war has created sub-regional insecurity, reduced economic productivity, some Principal Representatives accredited to Kiev have been recalled for briefing; students studying in Ukraine have returned to their home countries. Russia’s relationships with some countries have either been strained or strengthened, etc. Consequently, resources that should have been diverted to economic development purposes are unnecessarily earmarked for conflict prevention, and by so doing raising the issue of inflation.
The EU and the United States have taken economic sanctions against Russia. The sanctions cannot but generate inflation. Russia supplies a lot of gas to the EU. Russia was compelled to introduce the use of its own national currency as an international money as a result of the sanctions. The BRICS (Brazil, Russia, India, China, and South Africa) is also preparing to introduce a new convertible currency as an alternative to the pound sterling and the U.S. dollar. All these measures go beyond micro and macro-economic considerations. In fact, aviation costs, as well as wheat and other cereals that Ukraine normally export to the world, including to Africa, have been adversely affected.
True enough, the war has created scarcity in various domains. The scarcity generates inflation and the inflation is spreading worldwide because the international community lives interdependently and based on demand and supply. When there is scarcity, inflation follows. Nigeria cannot be an exception in terms of impact, especially because, as I have said, the war creates different problems ranging from politico-diplomatic to economico-cultural and military for other members of the international community.
It is agreed that the effect of the war is being felt globally but Nigeria seems to be heavily impacted. Why?
Nigeria cannot but be heavily impacted by the war, again for various reasons. First, Nigeria maintains diplomatic ties with both Ukraine and Russia and the relationships are both warm. Nigeria’s diplomacy should, under normal circumstance, be to avoid being the friend of one and enemy of the other. But because of the misapplication of Nigeria’s policy of non-alignment, and particularly by carelessly aligning with Ukraine, by asking Russia to withdraw its troops from Ukraine, it is now on record that Nigeria has taken side, which is apparently not in Nigeria’s national interest. Nigeria has become the enemy of Russia and the friend of Ukraine. The friendship with Ukraine is not really a big deal when compared to the implications for Nigeria’s industrial development for which Russia stands on a higher pedestal than Ukraine.
While it is true that thousands of Nigerians are studying in Ukraine and other thousands are doing same in Russia, Nigeria’s ties with Russia are more notable because of the Ajaokuta Steel project. Former Soviet Union took side with Nigeria during her civil war. Based on the Russo-Nigerian agreement of 2019, by which Russia agreed to help complete the Ajaokuta project, and in light of the pledges made at the Russia-African Summit held in Sochi, Russia in 2019 to bring development assistance to African countries, there is no way Nigeria will not be heavily impacted upon by the war, especially in terms of future punitive measures from the side of Russia.
The United States announced about a week ago a new foreign policy strategy that will be applicable to sub-Saharan Africa, meaning that it will not be applicable to the Maghrebin North Africa. Another element of the new foreign policy is the intention of the U.S. government to sanction countries that do not go along with the U.S. position on condemnation of Russian invasion. If the bill seeking to sanction anti-U.S. policies and countries that maintain a neutralist posture at international instances has gone through the first reading in the U.S. Congress, there is no way Nigeria will not continue to be impacted upon, particularly that Nigeria is a regional influential whose opinions are generally sought.
Russia says its occupation of Ukraine is a special military intervention while the NATO countries call it an invasion. Either as a special military intervention or as an invasion, there is no disputing the fact of illegality of the Russian action and the issue of its legitimate self-defence against NATO initiatives. Nigeria will need to have an official stand and this cannot but also impact on Nigeria’s foreign policy-making process.
Are there immediate measures to cushion the effects of the conflict or the Nigerian economy?
The political will to bring the war to an end is yet to exist. It must exist before any mitigation of the effects can take place. Let me note here that the war in Ukraine is not really a war between Russia and Ukraine but truly a war between Russia and the United States. It is a war between the adherents of the Warsaw Pact and proponents of the NATO. It is basically a resuscitation of the East-West Cold War. The war in Ukraine is a hot war and simply a manifestation of a cold war. The Cold War has been carefully and consciously prepared. Consequently, for as long as an ideological rivalry is being sustained, political will is required to douse the tension.
For the purpose of maintaining global peace and security, a principle of international law is adopted for general application in the conduct and management of international relations, and that is the principle of pacta sunt servanda. An agreement that is freely or voluntarily signed must also be voluntarily, without any jot of pressure, respected. Explained differently, many were the agreements done, be they MoU, Gentlemen Agreement, protocol, treaty, convention, pact, etc., by the United States and Russia, especially in terms of non-expansion of the NATO membership to the neighbourhood of Russia. The U.S. and its allies are on record to have breached such understanding.
It is also on record that if and when the Warsaw Pact was dismantled, so should the NATO. The Warsaw Pact now belongs to history but the NATO is yet to be done away with. While the likelihood of the dismantlement of the NATO appears to be more of a dream, peace can only return to Ukraine if the idea of membership of Ukraine of the NATO is completely set aside.
True, Russia has embarked on a war of no looking backward and a war in which the United States and its allies are not prepared to confront Russia directly. In fact, the United States and its allies are strengthening Ukrainians to do more battles but not enough to enable it to win. It is a military stalemate and a political lull. Only sincerity of purpose, non-partisan mediation and recognition of Russian right to a secure neighbourhood can lead to an enduring peace in the region.
What should Nigerians expect as long as the conflict persists?
When a conflict persists without any quick end in sight, the worst scenarios must be expected. First, further hardship in lifestyle must be expected. Increasing loss of lives, rising inflation, deepening animosity, not only vis-à-vis the invader but also towards the Ukrainian leader who paved the way for the war. War weariness cannot but become a fresh factor. Costs of prosecuting the war will not only increase but will not be available for any development purposes. In other words, it can be argued that security takes priority and that no development can take place in an environment of inclemency. Coups d’état cannot be ruled out as well as animosity towards those aiding and abetting the prolongation of the war.
The prolongation of any conflict cannot but be the delight of weapons manufacturers for various reasons. Room is always given for experimentation of new weapons. Findings on precision, efficiency and effectiveness of new weapons help in their further improvement. When new military equipment and weapons are found to be good, a good business market naturally emerges.
Recall the case of the Anglo-Argentinian conflict, I mean the Falkland crisis. Argentina had just purchased the French Exocet Missiles with which the British vessel, hitherto believed to be untouchable or invincible, was completely neutralised. Immediately thereafter, many countries, including Nigeria, made efforts to acquire the French missiles. It was an Exocet fever scramble that largely promoted France’s global image by that time. The Russo-Ukrainian war is therefore an opportunity for a great power like Russia and also Ukraine with nuclear capability to test their new weapons.
Without doubt, manufacturers of arms, weapons, military equipment, etc., cannot be happy when there is tranquillity in a region. It is when there is belligerence, especially one that endures, that there will be more productivity, more revenue generation and investors are also economically happy about their investments. The truth remains that the joy of someone can also the bitterness of another.
Consequently, by way of summary, the problems involved in the Russo-Ukrainian war are not simply about economic inflation or deflation. They are surely not simply about the extent of impact of the war and how to cushion the devastating effect of the war, but primarily about what people should expect if the conflict becomes recidivist. In this case, I foresee a Russian-Ukrainian scenario in Nigeria in the near future.