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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

Stem cell research and human cloning: legal and ethical focal points

2004-07-29

(Summary of the inaugural lecture of Prof Hennie Oosthuizen, from the Department of Criminal and Medical Law at the Faculty of Law of the University of the Free State.)

In the light of stem cell research, research on embryo’s and human cloning it will be fatal for legal advisors and researchers in South Africa to ignore the benefits that new bio-medical development, through research, contain for this country.

Legal advisors across the world have various views on stem cell research and human cloning. In the USA there is no legislation that regulates stem cell research but a number of States adopted legislation that approves stem cell research. The British Parlement gave permission for research on embryonic stem cells, but determined that it must be monitored closely and the European Union is of the opinion that it will open a door for race purification and commercial exploitation of human beings.

In South Africa the Bill on National Health makes provision for therapeutical and non therapeutical research. It also makes provision for therapeutical embryonical stem cell research on fetuses, which is not older than 14 days, as well as for therapeutical cloning under certain circumstances subject to the approval of the Minister. The Bill prohibits reproductive cloning.

Research on human embrio’s is a very controversial issue, here and in the rest of the world.

Researchers believe that the use of stem cell therapy could help to side-step the rejection of newly transplanted organs and tissue and if a bank for stem cell could be built, the shortage of organs for transplants would become something of the past. Stem cells could also be used for healing of Alzheimer’s, Parkinson’s and spinal injuries.

Sources from which stem cells are obtained could also lead to further ethical issues. Stem cells are harvested from mature human cells and embryonic stem cells. Another source to be utilised is to take egg cells from the ovaries of aborted fetuses. This will be morally unacceptable for those against abortions. Linking a financial incentive to that could become more of a controversial issue because the woman’s decision to abort could be influenced. The ideal would be to rather use human fetus tissue from spontaneous abortions or extra-uterine pregnancies than induced abortions.

The potential to obtain stem cells from the blood of the umbilical cord, bone-marrow and fetus tissue and for these cells to arrange themselves is known for quite some time. Blood from the umbilical cord contains many stem cells, which is the origin of the body’s immune and blood system. It is beneficial to bank the blood of a newborn baby’s umbilical cord. Through stem cell transplants the baby or another family member’s life could be saved from future illnesses such as anemia, leukemia and metabolic storing disabilities as well as certain generic immuno disabilities.

The possibility to withdraw stem cells from human embrio’s and to grow them is more useable because it has more treatment possibilities.

With the birth of Dolly the sheep, communities strongly expressed their concern about the possibility that a new cloning technique such as the replacement of the core of a cell will be used in human reproduction. Embryonic splitting and core replacement are two well known techniques that are associated with the cloning process.

I differentiate between reproductive cloning – to create a cloned human embryo with the aim to bring about a pregnancy of a child that is identical to another individual – and therapeutically cloning – to create a cloned human embryo for research purposes and for healing human illnesses.

Worldwide people are debating whether to proceed with therapeutical cloning. There are people for and against it. The biggest ethical objection against therapeutical cloning is the termination of the development of a potential human being.

Children born from cloning will differ from each other. Factors such as the uterus environment and the environment in which the child is growing up will play a role. Cloning create unique children that will grow up to be unique individuals, just like me and you that will develop into a person, just like you and me. If we understand this scientific fact, most arguments against human cloning will disappear.

Infertility can be treated through in vitro conception. This process does not work for everyone. For some cloning is a revolutionary treatment method because it is the only method that does not require patients to produce sperm and egg cells. The same arguments that were used against in vitro conception in the past are now being used against cloning. It is years later and in vitro cloning is generally applied and accepted by society. I am of the opinion that the same will happen with regard to human cloning.

There is an argument that cloning must be prohibited because it is unsafe. Distorted ideas in this regard were proven wrong. Are these distorted ideas justified to question the safety of cloning and the cloning process you may ask. The answer, according to me, is a definite no. Human cloning does have many advantages. That includes assistance with infertility, prevention of Down Syndrome and recovery from leukemia.

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