EASTERN TENSION

Case Study

Submitted by:

GRACEL ANN MANOREÑA

RACHEL DULCE

AUBREY QUINN DELOS SANTOS

EV MHALEN OLIVAR

YUCIAN GONZAGA

GERARD TAGALOG

12 ABM A-FAITH

MAY 12,2023

Applied Economics 8:40-10:00 AM

Introduction
The persistent conflict between Ukraine and Russia, situated in
Eastern Europe, commonly referred to as the "Eastern Tension," has
emerged as a significant concern for the international community due
to its extensive impact on global stability and economic development.
Ukraine, nestled in the eastern part of Central Europe, shares its
eastern and northeastern borders with Russia. In contrast, Russia, the
largest country globally, spans Eastern Europe and northern Asia,
sharing its borders with numerous nations, including Ukraine.
This case study aims to investigate the intricate dynamics
underpinning the conflict between these two nations, with a primary
focus on the economic repercussions for the countries directly involved
and the broader global context. The origins of the conflict can be traced
back to the intricate historical, cultural, and political connections
between Ukraine and Russia, which have experienced increasing strain
over the years. This tension reached a critical juncture in 2014 when
Russia annexed Crimea, and military confrontations subsequently
erupted in eastern Ukraine's Donbas region.
The prolonged instability in this region has resulted in substantial
economic challenges for both Ukraine and Russia, as well as indirect
effects on the global economy. Economic sanctions imposed by the
United States and the European Union against Russia have disrupted
trade, investment, and diplomatic relations, exacerbating the situation
further. Additionally, the ongoing conflict has led to concerns regarding
energy security in Europe, given the crucial roles both Russia and
Ukraine occupy in the European energy market—Russia being a primary
supplier of natural gas and Ukraine acting as a vital transit corridor.
 As the conflict continues to unfold, the potential for further
escalation and its subsequent ramifications on the global economy
underscore the importance of a comprehensive understanding of the
various economic dimensions of this geopolitical dispute. Through this
case study, our goal is to provide a thorough examination of the origins
and progression of the Ukraine-Russia conflict, its impact on the
economies of the involved nations and the global community, and
potential approaches for conflict resolution and risk management.

Objectives:
1. To explore the historical background of the Ukraine-Russia
conflict, taking into account the cultural, political, and economic
factors that have led to the existing tensions.
2. To assess the immediate and long-lasting economic ramifications
of Russia's annexation of Crimea and the ongoing conflict in the
Donbas region between Ukraine and Russia.
3. To examine the effects of economic sanctions on Russia's
economy, including their influence on trade relations and foreign
direct investment.
4. To appraise the impact of the conflict on Europe's energy security,
considering the vital roles that Russia and Ukraine play in the
European energy market.
5. To investigate the potential economic hazards linked to the
continued conflict and the possibility of further escalation,
focusing on their implications for global markets and trade.
6. To identify viable diplomatic and economic approaches for
resolving the conflict and reducing its adverse economic
consequences.
Background
Both Russia and Ukraine assert that Kievan Rus, a government
that unified the majority of East Slavic tribes and some Finnic tribes and
adopted Byzantine Orthodoxy in the ninth to eleventh centuries, is
where they derive their ancestry. The capital of contemporary Ukraine,
Kyiv (Kiev), was dubbed the Mother of Rus Cities because it served as
the seat of the mighty late-medieval state of Rus, according to ancient
Rus chronicles.

The histories of the people living in the lands of Russia and

Ukraine diverged after the Mongol invasion of Kievan Rus'. The
remaining northern provinces of Rus were merged under the Grand
Duchy of Moscow, which later became the Russian state. The Grand
Duchy of Lithuania eventually overcame the Kingdom of
Galicia-Volhynia, which was then ruled by the Commonwealth of Poland
and Lithuania. The fierce Zaporozhian Cossacks opposed Polonization
inside the Commonwealth and frequently engaged in conflict with a
Commonwealth administration led by the Polish aristocracy.

The Cossacks experienced unrest, which led them to rebel against

the Commonwealth and seek unification with Russia, with whom they
shared a common language, culture, and religion. Through the 1654
Treaty of Pereiaslav, this became official. By the time of the late
18th-century partition of Poland, much of Ukraine's territory had been
gradually absorbed by the Russian Empire beginning in the mid-17th
century, and its autonomy had been taken away. The majority of the
Cossacks were then transported to the Kuban region on the southern
limit of the Russian Empire shortly after the Cossack host was forcibly
disbanded by the Russian Empire.
 The Russian Empire referred to Ukrainians (as well as Belarusians)
as "Little Russians" because they were seen as having Russian ancestry
Russian Empire had gradually absorbed much of Ukraine's territory by
the end of World War I. However, a series of actions intended at
Russifying the "Little Russians" were put in motion due to a perceived
threat of "Ukrainian separatism". The teaching of the Ukrainian
language in schools as a subject and as a medium of instruction was
outlawed in 1804. The majority of Ukrainian language literature, public
lectures and performances, and even the printing of Ukrainian texts
alongside musical scores were all outlawed in 1876 by Ems Ukaz,
Alexander II's secretary.

Ukraine and Russia do not have any diplomatic or bilateral ties.

Since Russia invaded the Crimean Peninsula in February 2014 and
Russian-controlled armed groups seized government facilities in Donbas
in May 2014, there has been an international military confrontation
between the two governments. The Russo-Ukrainian War began in 2014
after the Ukrainian Revolution of Dignity when unmarked Russian forces
invaded Ukraine's Crimean Peninsula and later illegally annexed it. At
the same time, pro-Russian separatists engaged the Ukrainian military
in an armed conflict for control of eastern Ukraine. On February 24,
2022, Russia launched a full-scale invasion of the Ukrainian mainland
across a wide front, further escalating the conflict and forcing Ukraine
to terminate all formal diplomatic ties with Russia. The bilateral
relations between the successor states have seen periods of ties,
tensions, and outright hostility since the fall of the Soviet Union in 1991.
Early in the 1990s, Ukraine's foreign policy was primarily focused on
securing its sovereignty and independence, and it was balanced in its
collaboration with the European Union (EU), Russia, and other strong
polities.

After the 2014 Ukrainian Revolution, which was followed by

Russia's annexation of Crimea from Ukraine, and the Donbas War, in
which Russia backed the separatist rebels of the Donetsk People's
Republic and the Luhansk People's Republic, relations between the two
nations deteriorated. By the beginning of 2020, the hostilities had
claimed more than 13,000 lives and resulted in Western sanctions
against Russia. Economic relations have been cut, and many bilateral
agreements have been canceled.

A Russian military build-up on Ukraine's border over the years

2021 and 2022 heightened tensions and deteriorated bilateral ties
between the two nations, eventually culminating in Russia starting a
full-scale invasion of the nation. In 2022, Ukraine severed diplomatic
ties with Russia in response to Russia's invasion of that country. In
numerous areas across Ukraine, streets with Russian historical figures'
names and monuments signifying the goodwill between Russia and
Ukraine have been taken down. The Ukrainian parliament outlawed
toponymy using names connected to Russia in March 2023.
Situation Analysis:
The ongoing conflict between Ukraine and Russia led by
Volodymyr Zelensky and Vladimir Putin respectively has had
far-reaching and devastating impacts, affecting millions of people and
causing significant disruption across various sectors. The statistical data
provided paints a grim picture of the human cost and the broader
socio-economic effects of this crisis.

Table 1: Shows The Western Tension’s Humanitarian Impact.

Category Value Date Source

People Affected 21M Dec 31, 2023 OCHA & Humanitarian Partners

People in Need 18M Dec 31, 2023 OCHA & Humanitarian Partners

Refugees from Ukraine across Europe 8.2M May 11, 2023 UNHCR

Internally Displaced People (estimated) 5.4M Jan 23, 2023 IOM

Civilian Casualties - Killed 8,791 May 11, 2023 OHCHR

Civilian Casualties - Injured 14,815 May 11, 2023 OHCHR

People reached within Ukraine 14M Jan 16, 2023 Humanitarian partners

Humanitarian orgs within Ukraine 750 Dec 31, 2022 Humanitarian partners

Attacks on Health Care 959 Apr 27, 2023 WHO

 The Ukraine-Russia conflict has had wide-ranging and devastating
consequences, affecting approximately 21 million people by the end of
2023. According to data, 18 million people are in need of humanitarian
aid, encompassing necessities like food, water, medical care, education,
and mental health support. The crisis has resulted in significant
displacement, with an estimated 8.2 million people seeking refuge
outside Ukraine and 5.4 million displaced within the country. Civilian
casualties have been tragically high, with 8,791 reported deaths and
14,815 injuries. Despite the efforts of 750 humanitarian organizations
within Ukraine, the conflict has seen numerous attacks on healthcare
and education facilities, further exacerbating the crisis. The situation
underscores the urgent need for international cooperation and
adherence to international humanitarian law.
On the financial side, the ongoing war in Ukraine has inflicted
damages exceeding $60 billion (€55 billion), specifically to buildings and
infrastructure, as stated by World Bank President David Malpass.
However, the total financial toll is likely to be far greater when we
consider other economic impacts, such as trade disruptions,
productivity losses, and the costs tied to population displacement,
among other things. Adding to this, the International Monetary Fund
(IMF) has projected a substantial contraction in Ukraine's economy,
expecting it to shrink by 35% both this year and the next. It's important
to note, though, that these financial damage estimates are fluid and
expected to escalate as the conflict continues.
Furthermore, the conflict between Ukraine and Russia has
significantly influenced several markets and industries. The
implementation of economic sanctions on Russia by the United States,
European Union, and other countries has altered trade relations and
investment opportunities. These sanctions have targeted Russia's
energy, financial, and defense sectors, leading to reduced exports and a
decline in foreign direct investment. Additionally, the sanctions have
resulted in the depreciation of the Russian ruble, contributing to
economic instability.
The conflict has caused significant disruptions to the European
energy market due to Russia's central role as a primary supplier of
natural gas to the continent, and Ukraine's critical position as a transit
country for gas pipelines. Further adding to the crisis, Russia, which is
the world's second-largest oil exporter next to Saudi Arabia, has cut
production by 500,000 barrels per day. This cut, representing a hefty 5%
reduction in their output, has the potential to upset global oil markets
by shrinking the overall supply.
In addition, the conflict has gravely impacted Ukraine's agricultural
sector. The production of key crops like wheat and corn has fallen
drastically, by 28% (to 9.24 million metric tons) and 25% (to 10.25
million metric tons) respectively. These declines are likely to have
substantial implications, potentially exacerbating global food security
issues. The ongoing strife has raised concerns about the stability and
security of energy supplies, prompting European nations to search for
alternative sources and diversify their energy strategies.

Key Stakeholders:
The main parties involved in the Eastern Tension are the
governments of Ukraine and Russia. The Ukrainian government is
focused on preserving its territorial integrity and sovereignty while
addressing the challenges posed by the conflict. Conversely, the Russian
government has been backing pro-Russian separatist movements in
eastern Ukraine, further exacerbating the situation.
Numerous international organizations and governments have also
participated in this conflict. The United States and the European Union
have imposed economic sanctions on Russia and provided support to
Ukraine in various forms, such as financial aid, military assistance, and
diplomatic backing. The Organization for Security and Co-operation in
Europe (OSCE) has taken part in mediating the conflict and monitoring
the enforcement of ceasefire agreements.

Reasons for Involvement:

The motivations for involvement in the Eastern Tension are

diverse. The conflict symbolizes a fight for sovereignty, territorial
integrity, and political stability in Ukraine. For Russia, the motives are
more intricate, encompassing a wish to maintain regional influence,
safeguard the interests of the Russian-speaking population in Ukraine,
and counter perceived Western expansion. The participation of other
countries and international organizations can be ascribed to the
strategic significance of Ukraine and Russia in a global context. Ensuring
stability in the region is vital for maintaining international peace and
security. Furthermore, the potential disruption to energy supplies and
trade relations presents a considerable concern for European countries
and the global economy.
In summary, the Eastern Tension has far-reaching consequences
for the global market and numerous industries, particularly the energy
sector. Resolving the conflict is crucial for reestablishing stability in the
region, guaranteeing the security of energy supplies, and mitigating the
negative economic effects. The situation calls for ongoing diplomatic
efforts and collaboration among the involved parties to attain a
peaceful and sustainable solution.
Problem Identification
The ongoing conflict between the two nations - Russia and
Ukraine brought forth challenges and issues that are experienced across
nations. These issues aforementioned are the following:

● Global Trade Disruption

● Surging Prices of Resources
● Massive Investment in Ukraine
● Russian Recession
Analysis
This part of the case study focuses on the in-depth explanation of
the different problems given. It is to justify the cause of the issue and its
impact on the people and the economy.

● Global Trade Disruption

Causes:

- The Russian-Ukraine war impacted the global supply chain

massively, impeding the flow of goods, the cost of resources,
and product shortages around the world.
- The United States of America forbade Russian Airlines in
their territory, and Russia also issued a ban on European
airlines on their own.
- Closure of commercial shipping ports in the Azov Sea and
the Black Sea.

Effects:

- Many countries suffered its backlash as they are dependent

on the now scarce supplies from Ukraine and Russia.
- The continuous attack impedes Russia’s exports as they are
the world’s second-largest natural gas producer, third on oil,
and among the top five producers of steel, nickel, and
aluminum as well as a major exporter of lumber particularly
softwood, accumulating 16% of the global exports in 2019.
- Meanwhile, the production of the commodity by Ukraine
has fallen significantly impacting exports of sunflower oil,
corn, and wheat as well as the production of sugar beet,
barley, soya, and rapeseed.
- As a result, many sectors have been highly affected
especially the automotive sector because of the shortages,
high commodity and raw material prices such as oil and
metals.
- Airlines and maritime companies will have to take longer
routes that cost higher because of the surging freight and
fuel prices.
- Shipments between Asia and Europe transiting through
Russia are hindered. Specifically the supply distributions in
countries like Egypt and Turkey (the two largest buyers of
Russian wheat and major importers of Ukrainian grain) as
well as Cyprus, Italy, and Lebanon.
- Some Ukrainian automotive factories announced a stoppage
of production due to chip shortages. Major companies like
Porsche and BMW operating in Eastern Europe announced
closure.
- The escalation of the war will likely increase commodity
prices and shortages and will intensify much higher inflation.
Other countries may divert or find alternative suppliers,
forging a public-private partnership that can start
de-globalization.
● Surging Prices of Resources
Cause:

- As the global supply chain was disrupted, financial markets

fell sharply leading to a surge of materials such as oil, natural
gas, and metals; as well as food products like wheat and
corn.

Effects:

- The rise of oil rose quickly to $100 per barrel while natural
gas rose by almost 70% (Cifuentes-Faura, 2020). This
increasing price of natural gas and petrochemicals impacted
the fertilizer market hence the whole agri-food industry.
- According to an analysis by Coface in March 2022, a barrel of
Brent oil trades for more than $125, while natural gas
markets for more than €150 Mw/h. At least 1.5% of
additional inflation in 2022 would erode household
consumption and, together with the expected fall in business
investment and exports, lower GDP growth by approximately
1%.
- The double blow of rising food prices and decreased wheat
exports raises the specter of food shortages and political
instability in poor countries such as Egypt, Lebanon,
Pakistan, Iran, and Ethiopia. Lebanon, which has the world’s
 highest rate of food inflation — at 122%, struggles to keep
up with the threatened food supply.
- 20 million tons of grain were stranded in storage silos on the
Black Sea coast due to Russia's blockade of Ukraine's ports
from the beginning of the war.
- In Africa, remote countries like Chad experienced a rise of
40% in their local crop (World Food Program, 2022). Their
food supplies were already low since 2010 but the Kremlin’s
Black Sea blockades made it worse.
- In Asian countries, the most impact of the energy prices was
felt mostly through higher import prices, particularly in many
economies in the region as they are net energy importers,
led by China, Japan, and South Korea.
- As the commodity prices increase, net importers of food &
energy products will also be particularly affected. With the
continuance of the conflict, an even greater escalation of
prices might be considered that can result in hunger or even
famine for the vulnerable people.

● Massive Investment in Ukraine

Cause:

- As the Russians continue to evade Ukraine, its attack

reenergized most members of the North Atlantic Treaty
Organization (NATO), the European Union, the United States
of America, and other member states to spend a huge
amount of assets in Ukraine.
 Effects:

- The United States as well as other forty-two countries

invested in military and humanitarian aid while the European
institutions provided the largest financial assistance.
- Heavy weaponry, missile air defense systems, armored
vehicles, and tanks are rapidly being pledged to provide aid
to Ukraine against the war as well as humanitarian support
for refugees, food and healthcare assistance, and other
humanitarian aid.
- As security tightens, the defense budgets around the world
are likely to increase, wherein the budget allocated to items
such as education or healthcare will likely be reallocated or
lessened.
- The cost of rebuilding Ukraine will be financially difficult as
the country already suffered serious damages up until today.
The World Bank predicted that the cost of restoring Ukraine
would be over $349 billion in September 2022; this figure is
higher than the GDP of Ukraine before the invasion as well
as all military, humanitarian, and financial pledges made to
Ukraine since the start of the war.

● The Russian Recession

Causes:

- The European market became Russia's biggest customer: in

2022. Before the invasion, 60% of its oil exports went to
Europe, and 74% of its dry natural gas, according to the
 International Energy Agency. However, in March 2022, 27
leaders of the European Union decided to reduce the EU's
reliance on Russian fossil resources as quickly as possible.
- EU sanctions notably target major Russian banks, the
Russian central bank, the Russian sovereign debt, selected
Russian public officials & oligarchs, and the export control of
high-tech components to Russia.

Effects:

- An updated GDP forecast of Coface on Russia for 2022

stands at -7.5% after last year with an increased number of
risks.
- EU sanctions will be implemented for vessels flying the
Russian flag to enter EU ports starting in April 2022. This also
be applied to vessels that have re-registered from the flag of
Russia to the flag of another state.
- On May 2022, the European Council agreed on a ban on
almost 90% of all Russian oil imports by the end of 2022 -
with a temporary exception for crude oil delivered by
pipeline (European Council, 2023).
- These actions further weaken the Russian currency, which
has already in decline and will cause a spike in consumer
price inflation. The Russian central bank is unable to use
them due to the freeze imposed by Western nations, which
lessens the impact of the Russian response.
- A significant decline in the export of Russian natural gas and
other commodities to Europe reduces Russian state revenue,
 which also disrupts the cash flow that supports Russian
financial leverage.
- Companies and/or businesses affected by the war suffered a
temporary decline in their business which can cause growing
uncertainty to establish a business on Russian soil, especially
those Western companies.
- As some nations were deeply affected by EU sanctions, they
continue to seek an alternative source of oil and natural gas
to reduce their dependence on Russia.
Recommendation
● The implementation of another Minsk Agreement
● The Findlandization of Ukraine
● Russia’s victory over Ukraine
● Ukraine’s victory over Russia
● Permanent Division of Ukraine
● Velvet Divorce of Ukraine and Russia
Implementation
● The implementation of another Minsk Agreement
1. Leaders of both Russia and Ukraine will negotiate the
points of the agreement. The points or conditions in the
negotiation are made to favor both countries. Since it is
made to favor both countries, this means that no other
demands must be demanded from each side.
2. When both points are finalized, these points will be
implemented in both countries not only aiming ceasefire
but ensuring peace in both nations.
3. To ensure that this agreement is effective, both nations
must strictly abide by the agreement without doing actions
that could potentially break the agreement.
4. This time, the OSCE or the Organization for Security and
Co-operation in Europe must strictly monitor if the troops
abide by the accord.
● The Findlandization of Ukraine
1. The Finlandization of Ukraine means that Ukraine will
adopt the policy of neutrality.
2. The beginning of this neutrality is that Ukraine will keep its
relations distant from military powers including the
European Union and most especially NATO.
3. NATO will refrain from deploying forces to, and remove
forces from, eastern European states that joined NATO
after 1997, a group that includes Poland, the Baltic states,
and the Balkan states.
4. Russia would have a significant impact on Ukraine’s political
choices.
● Russia’s victory over Ukraine
1. Ukraine will give up its sovereignty in Ukraine.
2. Ukrainian President Volodymyr Zelensky will resign.
3. Russia will occupy Ukraine.
4. There might be a unification of Russia and Ukraine and the
rise of the Russian Federation.
● Ukraine’s victory over Russia
1. Ukraine will gain its sovereignty.
2. Russian forces will leave Ukraine.
3. Russia will be sanctioned by the United Nations and will
suffer exemptions from other Western countries.
● Permanent Division of Ukraine
1. Ukraine will gain power in specific regions where it won the
war against Russia.
2. Ukraine will give up the Donbas region.
3. Russia will gain power in the Donbas region.
4. Ukraine will be permanently divided but will still gain its
sovereignty.
● Velvet Divorce of Russia and Ukraine
1. Both countries will have a ceasefire.
2. Russia and Ukraine will negotiate which parts or regions
they should divide equally.
3. Finalization of the division and strict implementation of the
said agreement.
Evaluation
● Minsk Agreement
The implementation of the Minsk Agreement is one of the
closest ways to end the never-ending chaos between Russia and
Ukraine. However, the implementation of this agreement will only be
possible if Russia will keep its promise and return its end of the
bargain. However, I don’t think it is possible. In the past years, both
countries have already made an agreement, thus, making Minsk 1 and
Minsk 2. Even though these agreements are made for the second time
around, the implementation of the agreement is not strict and is only
extremely shallow because both countries continue to violate the
points created in the agreement. Minsk 1 was unsuccessful since
Russia violated it and continued to invade Ukraine in 2014. Another
Minsk Agreement, hence, Minsk 2 was made in 2015 which was not
properly implemented as both countries continue to violate the
points. Aside from that, Minsk 2 aims only to have a temporary
ceasefire on the conflict and is not treated as an official resolution of
peace in both states (Yilmaz, 2022). Moreover, the last Minsk
Agreement in 2015, only included talks about the rebels excluding
Russia in the agreement (Lister, 2022). To make the new Minsk
Agreement successful, both sides must make a new set of points
favoring both countries that are not completely biased toward the
other stronger side which has a lot of influence in terms of military
and political power. The implementation of another Minsk Agreement
might be a successful way of preceding peace in both nations but
considering the situation now with Ukraine and Russia, I don’t think
Russia would take any agreements to accord since it shows persistence
in invading Ukraine.

● Finlandization of Ukraine
The phrase "Finlandization" describes a scenario in which a
smaller state preserves its independence while taking a neutral stance
in its interactions with a larger, more powerful neighbor. Some pundits
have proposed Finlandization as a potential resolution to the
Russia/Ukraine conflict, whereby Ukraine would keep its
independence while closely aligning with Russia and pursuing a
neutral foreign policy.

However, it is extremely doubtful that such a solution will be put

into practice given the current situation. First off, it is highly
improbable that any Ukrainian government would consent to such an
arrangement since many Ukrainians consider the idea of
Finlandization as a betrayal of their sovereignty and independence.

Second, because it wants to keep control over Ukraine and stop

it from siding more with the West, Russia hasn't shown much interest
in a Finlandization-style solution. A Finlandization-style solution would
not grant Russia the level of authority it seeks because it has already
invaded Crimea and supported separatists in eastern Ukraine.

And last, the situation in Ukraine is considerably more

complicated than in the historical setting of Finlandization. Because
the conflict in Ukraine is founded in regionally specific historical,
cultural, and political circumstances, a one-size-fits-all solution, like
Finlandization, is unlikely to be successful.
 In conclusion, the lack of political will and practical reasons on
both sides, as well as the particular difficulties of the war, make it
improbable that the notion of Finlandization will be applied to the
Russia/Ukraine conflict.

● Russia’s victory over Ukraine

Given that the Russia/Ukraine conflict is rooted in more
extensive political, economic, and historical issues that go beyond the
actions of any one man. Russian victory over the Ukrainian powers is
also possible to happen since Russia is stronger than Ukraine in terms
of military power and without the help of the United Nations and the
United States of America, Russian forces could’ve occupied the region
long overdue. So, if Ukraine gives up its sovereignty to Russia, Russian
occupation in the region will mostly occur and a possible unification of
the two countries might happen as well. If this happens, the current
Ukrainian president is most likely to resign and let the new leader
which is the Russian president, Vladimir Putin, lead the state. Russia’s
victory over Ukraine might be the only way to end the war. However, I
don’t think it is only possible when Ukrainian forces continue to fight
for their independence and gives no sign of discouragement in fighting
against the Russian powers.

● Ukraine’s victory over Russia

Ukraine’s victory in the Ukrainian war can also be a solution to
end the war. If Ukraine has finally gained its sovereignty, Russian
forces will leave the country and are going to be sanctioned by the
United Nations. Although the chances of Ukraine winning over Russia
is lesser, with the help of the other states and allies of Ukraine, this
could be possible. However, since Ukraine is a weaker country than
Russia, a move from the external force could lead to another big war
outside these two regions. The involvement of other nations in the
conflict may provoke another World War which the United Nations
prevents to happen (Ensor et al., 2022). So victory against Russia is
more unlikely to happen considering the situation Ukraine is currently
experiencing.

● Permanent Division Ukraine

Because of the intense tension in the Donetsk and Luhansk
regions, known collectively as Donbas, which was seen as one of the
causes of the start of the Ukraine-Russia war. Since these territories
are deemed significant because of Russia’s economic ambitions in the
region. If Ukraine gives up the region to Russia, Donetsk, and Luhansk,
will be recognized independently and will have a strong Russian
influence. The permanent division of Ukraine might be a solution to
peace but considering that Ukraine is persistent in taking full
autonomy in these regions, I don’t think the permanent division of
Ukraine would be possible at this point in time.

● Velvet Divorce of Ukraine and Russia

Just like Russia and Ukraine, there are many countries not just in
Europe but also in other parts of the world that have settled their
conflicts through mutual acceptance and respect towards each other.
Countries like the Czech Republic and the Slovak Republic were once a
part of Czechoslovakia and have peacefully made an agreement to
dissolute the country. This peaceful dissolution is called the “velvet
divorce” in which the two countries have decided to split their
resources in a two-to-one ratio based on the respective two nation’s
respective populations and to split towns through borders
(KAFKADESK PRAGUE OFFICE, 2018). The war between Russia and
Ukraine dated back to when Ukraine was still once a part of the Soviet
Union. The separation of Ukraine from Russia was not a peaceful
separation since the Russian Federation still has a lingering connection
with Ukraine. Russian President Vladimir Putin still acts like Ukraine is
a part of Russia since it demands control over Ukrainian politics. The
heights of the war are still intense and continue to intensify day by
day. A peaceful dissolution cannot be made as both countries would
want to impose their conditions strongly.
CONCLUSION
The conflict between Ukraine and Russia affects economic
development and people globally, it also raises problems like Global
Trade Disruption, Surging Prices of Resources, Massive Investment in
Ukraine, and the Russian Recession. Additionally, the war caused an
energy disruption to the European market as Russia is the primary
supplier of natural gas in Europe, and Ukraine is a vital transit corridor.
This resulted in Europe finding alternative sources and diversifying
their energy strategies. Economic sanctions imposed on Russia by the
United States and the European Union disrupted trade, investment,
and diplomatic connections, worsening the crisis. With this,
Recommendations and Implementations were appointed in the hope
of stopping the war.
In this case study, six (6) agreements were recommended in
order to stop the war. Accords such as the Minsk Agreement,
Findlandization, Russia’s victory over Ukraine, Ukraine’s victory over
Russia, the Permanent division of Ukraine, and the Velvet Divorce of
Russia and Ukraine. Minsk Agreement seeks a permanent ceasefire
between the two countries. At the same time, Finlandization reduces
Ukraine's sovereignty by making it a neutral country with limited
military forces, the right to vote, close trade relations, and ignorance
of any ruling foreign power. Other ways such as Russia’s victory and
Ukraine’s victory determine which side of the war wins and lose.
Russia’s victory is a sign of Russian occupation in Ukraine while
Ukraine’s victory is a sign of Ukraine’s independence as a country
ousting Russian invaders in the mainland. Meanwhile, the other two
recommendation aims for peace where both nations benefit through
the equal division of power between the nations.
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