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Opinion: The economic impact of the Russia-Ukraine crisis

07 March 2022 | Story Sanet Madonsela | Photo supplied

SanetMadonsela_web read more — Sanet Madonsela is a PhD Candidate in the Centre for Gender and Africa Studies. She is also the Chairperson of the South African Association of Political Science's Emerging Scholars Research Committee and the Projects and Events Coordinator for the International Association for Political Science Students

Opinion article by Sanet Madonsela, PhD Candidate in the Centre for Gender and Africa Studies, University of the Free State.

On the 24 February 2022 the world woke up to the news of Russia announcing its’ “special military operation” to “demilitarise” and “deNazify” Ukraine. This announcement was followed by a sophisticated, all-out attack by land and air. As Russia began its invasion, the rest of the world watched in anguish, contemplating the unavoidable international political and economic implications.

There are competing views as to why Russia invaded Ukraine. Some argue that the attacks were based on Ukraine’s desire to join NATO, while others link the invasion to the Minsk agreements. The Minsk agreements are two treaties signed in 2014 and 2015 aimed at ending the war in Donbass. To provide a bit of context one needs to go back to 2014.

Resolution to recognise Donetsk and Lugansk

Moscow was angered that its candidate lost Ukraine’s presidential mantle in elections in 2014. This resulted in Donetsk and Luhansk announcing their autonomy from Kiev. In September of that year the government of Kiev and the separatist leaders agreed to a 12-point ceasefire called Minsk I. Despite the signing of the agreement, the fighting continued resulting in Russia, Ukraine and the Special Monitoring Mission of the Organisation for Security and Co-operation in Europe (OSCE) signing Minsk II. The agreement called on Ukraine to control the state border, constitutional reform and decentralisation. Despite an election held in 2018 in the eastern regions, the US and the EU have refused to recognise the legitimacy of the vote, thus, violating the agreement. The OSCE has reported significant daily increases in ceasefire violations in the affected areas since February 2014. While the US is not a signatory, it has expressed the importance of implementing the agreement. Instead of accepting the existing agreement, Ukraine allegedly never implemented its provision thereby incensing Moscow as well as ethnic Russians in Ukraine.

On 16 February 2022, the Russian parliament adopted a resolution requesting Putin to recognise Donetsk and Lugansk. This agreement was signed on 21 February 2022 and followed by a request to deploy armed forces. Inevitably the conflict dynamics have escalated.

While some believe themselves to be immune to the conflict, economists warn that it will have far-reaching global consequences as armed conflict tends to disrupt supply chains and increase the price of food and gas. They predict a further increase in oil prices per barrel as Russia is the world’s largest natural gas exporter and the second largest exporter of crude oil. This is important as oil prices directly impact transportation, logistics, and air freights. On Thursday, 24 February, global oil prices past $105 per barrel warranting these predictions. In addition, Russia is the world’s largest supplier of palladium, a material used by automakers for catalytic converters and to clean car exhaust fumes, a delay which would affect auto production. It is worth noting that Ukraine is a major provider of wheat, corn, and barley. A lack of yellow maize, or even a slowdown in production, could result in an increase of meat prices.

Exports and sanctions

Combined, Russia and Ukraine export more than a third of the world’s wheat and 20% of its maize. They also account for 80% of global sunflower oil exports. They supply all major international buyers, as well as many emerging markets. In 2020, 90% of the African continent’s $4 billion agricultural imports from Russia were wheat and 6% sunflower oil. South Africa does not produce enough wheat and is heavily reliant on imports from these countries. It imported more than 30% of its wheat from these two countries over the past five years.

Western states have announced a coordinated series of sanctions aimed at Russian elites; however, critics warn that they may be ineffective as the country’s economy is large enough to absorb even the most severe sanctions. Its central bank has more than $630 billon in foreign reserves and gold. Its sovereign wealth accounts for an additional $190 billion. Russian debt accounts for a mere 20% of its gross domestic product (GDP).

The European Commission’s president, Ursula Von der Leyen, states that the bloc would target Russia’s energy sector by preventing European companies from providing Russia with the technology needed to upgrade its refineries. The US Department of Treasury has committed itself to prevent Russia’s state-owned Gazprom from raising money to fund its projects in the US. It is worth noting that Russia and Ukraine’s imports and exports to the US account for less than 1%, while Europe and Russia are interdependent. The EU needs Russian gas, while Russia needs the EU’s money. Some warn that the EU’s decision could be detrimental as it receives over a third of its natural gas from Russia. This is used for home heating and energy generation. These fears were intensified when the natural gas price in Europe increased by 62% on 24 February. It is believed that Russia has been preparing for economic isolation for years and that it could better absorb the sanctions than Europe’s ability to reduce its dependence on Russia’s oil, gas, and coal. Despite all these, Gazprom announced that its gas exports to Europe were continuing as normal.

While the world watches with bated breath as the conflict rages there are some promising signs. Russian and Ukrainian delegates are currently meeting on the border with Belarus to start a dialogue and Ukraine’s President Volodymyr Zelenskyy has called on Israel to serve as a mediator between himself and Russian President Vladimir Putin. Let us pray that reason prevails.

News Archive

B. Iur. programme in Occupational Risk Law first of its kind in the country

2010-11-26

The University of the Free State (UFS) will offer a B.Iur. degree programme in Occupational Risk Law from 2011.

This programme of the Faculty of Law is the first of its kind to be offered in South Africa and positions the UFS in the forefront of this field of study.

The programme is designed to develop and qualify professionals, knowledgeable in the field of occupational risk law as prescribed by South African legislation and international best practices. It further offers a qualification based on a well-researched basis of applicable legal principles, combined with safety, health, environmental and quality risk management principles applicable to employers and employees in a specialised industry.

The B.Iur. (Occupational Risk Law) has been developed by experts within the parameters of international comparability, according to research-based identification of career demands and requirements in the fields mentioned.

By introducing this programmesignificant progress will be made towards achieving the nationally stated objective of legal safety, health and environmental quality assurance in the workplace and within the broader community. The programme will also encompass the values and standards prescribed by the Institute of Safety Managers. This will provide them with a further step towards the regulation of the professional en ethical standards in the field of legal safety, health and environmental quality assurance.

With the programme, the UFS not only creates a unique opportunity for stakeholders and learners to add meaningful value to their careers, but also exerts a meaningful influence on the industry and society in terms of the acquisition of a most appropriate type of qualification. The B.Iur. (Occupational Risk Law)degree therefore offers a meaningful contribution towards the industry through addressing the increasing demand for career opportunities in the field of legal safety, health and environmental quality compliance.

The new programme is the result of an agreement between the faculty and its partner, IRCA Global. The university officially launched its partnership with IRCA Global, an international supplier of risk management solutions pertaining to safety, health, the environment and quality in 2008. As part of the agreement, the UFS will offer short learning programme, a diploma and a degree in Risk Management.

IRCA Global is a South African company in the international risk control and SHEQ environments with filials in Africa, Australia, India, Eastern Europe, and South America.

In the interim IRCA Global has continued with the marketing of the programme, with the result that hundreds of potential students are waiting for the launching of the programme. The faculty is geared towards offering the programme in e-learning. New modules will also be offered with the help of IRCA’s trained and skilled facilitators. The faculty also utilises the partnerships entered into with IRCA to appoint practising specialists as part-time lecturers for the occupational risk law component of the programme as well as to develop a new specialist component amongst the permanent staff.

The programme is already active and students can register for the first semester 2011 (study code 3324, programme code M3000). Direct your enquiries to Cora-Mari de Vos at 051 401 3532 or devosc@ufs.ac.za.

The programme consists of fundamental modules of the LL.B. and B.Iur., as well as short learning programmes in the Faculty of Law and specially developed core modules in occupational risk law. The B.Iur.in Occupational Risk Law enables successful candidates to enrol for applicable Post Graduate Diplomas or a cognate Honours Degree. Obtaining one of these qualifications provides the platform to articulate to Magister degrees. Horizontal articulation possibilities exist with the accredited Baccalaureus of Law (LL.B.) which is presented by several institutions in the country.

Media Release
Issued by: Lacea Loader
Director: Strategic Communication (actg)
Tel: 051 401 2584
Cell: 083 645 2454
E-mail: loaderl@ufs.ac.za
26 November 2010

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