As Ukraine enters the fourth year of war with Russia, uncertainty looms over its reliance on U.S. military and financial support amid economic struggles and exhausted troops. President Zelenskiy expressed willingness to resign for peace, linking his departure to NATO membership. U.S.-Ukraine relations have strained under President Trump’s emphasis on Ukrainian elections, accusing Zelenskiy of dictatorship. While both economies suffer from inflation, Russia faces signs of economic cooling, whereas Ukraine’s GDP rebounded this year. Despite significant military losses and humanitarian crises, Ukraine’s industrial sector shows resilience, particularly in energy and metal resources.
New Delhi:
As Ukraine embarks on the fourth year of its all-out conflict with Russia on Monday, uncertainty looms over its dependence on the United States for ongoing financial and military support. The Ukrainian economy is beginning to show signs of decline, while its weary troops are fervently striving to maintain their position amid relentless enemy offensives. The war initiated by Russian President Vladimir Putin has also begun to strain Moscow, as evident from the early signs of economic deceleration compounded by rising inflation.
During a press conference on Sunday, Ukraine’s President Volodymyr Zelenskiy stated that he would be willing to resign if it would secure peace for his country, humorously suggesting he could trade his position for Ukraine’s accession to NATO. “If (it means) peace for Ukraine and if you really need me to leave my post, I am ready,” an visibly frustrated Zelenskiy responded when asked if he would step down for peace.
“I can exchange this for NATO (membership), if that condition is met, immediately,” he added.
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US Changing Stance
Since commencing his second term on January 20, US President Donald Trump has advocated for elections in Ukraine, labeling Zelenskiy a “dictator,” an apparent reference to the expiration of his five-year term in 2024. Trump seems to have implied that Ukraine bears some responsibility for the ongoing war, triggered by Russia’s full-scale invasion three years ago.
Relations have markedly soured between Trump and Zelenskiy in recent weeks, with the Ukrainian leader opposing the notion of holding elections while engaged in active conflict, a stance backed by his significant domestic political adversaries.
Zelenskiy has expressed a desire for a partnership with Trump, seeking more than just mediation between Kyiv and Moscow. “I truly wish for it to be more than mere mediation… that’s insufficient,” he remarked in a press briefing in Kyiv.
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Meanwhile, Trump is keen to recoup some of the billions spent supporting Ukraine’s battle against Russia. Negotiations are ongoing between Washington and Kyiv regarding a mineral resources deal, which Trump sees as a form of compensation for the wartime aid provided by his predecessor, Joe Biden.
In return, Ukraine insists that any agreement with the United States must include security guarantees, especially as it continues to contend with Russia’s nearly three-year invasion.
Additionally, the Trump administration has commenced discussions with Moscow to address the war’s conclusion in Ukraine, having restored diplomatic ties. So far, Kyiv has been sidelined from these discussions.
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Economic Strains Of War On Russia And Ukraine
From the outset, it was evident that Putin’s war in Ukraine would result in significant global economic fallout. Inflation reports from both countries reflect the ongoing strain the conflict places on their citizens, with price increases at 9.5 percent in Russia and 12 percent in Ukraine.
According to International Monetary Fund (IMF) data, Russia’s gross domestic product (GDP) declined by 1.3 percent at the war’s commencement but rebounded to show growth of 3.6 percent in the past two years. Nonetheless, the Russian economy is now exhibiting early signs of cooling, with decreasing sales and orders across multiple sectors due to high interest rates and inflation.
“Based on results from November and particularly December, we’ve noted that growth has ceased to be robust… The pace has slowed in various industries, including food production, chemical manufacturing, wood processing, and certain aspects of machine building… Business order volumes are diminishing,” Russian Economy Minister Maxim Reshetnikov recently stated.
He mentioned that his ministry is collaborating with the central bank and finance ministry to align monetary and fiscal strategies. “We are seeking a balance between tackling inflation and fostering economic growth,” Reshetnikov was reported as saying.
Despite extensive US and European sanctions, Russian factories have continued acquiring the essential components and raw materials necessary to sustain their military operations, as highlighted in a report by The Guardian.
The report indicates that the influx of revenue from the illegal sale of oil, along with natural gas, nickel, and platinum, has facilitated an expansion of a state apparatus that appeared close to collapse 18 months prior.
Conversely, Ukraine is demonstrating resilience as an independent nation, with its GDP, which fell by 36 percent by the summer of 2022, rebounding to 5.3 percent in 2023 and 3 percent in 2024. However, forecasts from Ukraine’s economy ministry suggest that GDP growth may decelerate to 2.7 percent this year, below the 3-4 percent that most analysts and economists had anticipated.
Ukraine’s electricity sector and metal resources are also performing well. According to The Guardian, electricity imports have surged by 50 percent from 123GWh to 183GWh from January 2024 to the previous month, with exports increasing from a mere 5GWh to 85GWh in the same timeframe.
Looking ahead to the next decade, Ukraine possesses a wealth of metal deposits, many of which are rare, with some estimates placing their value at $11 trillion.
Losses On Ground
Since Russian President Vladimir Putin mandated the invasion via land, sea, and air, thousands of Ukrainian citizens have lost their lives, with over 6 million displaced as refugees abroad.
Military losses have been staggering, although they remain closely guarded secrets. Public Western estimates based on intelligence reports vary widely, but most assessments suggest that hundreds of thousands have been either killed or wounded on both sides.