Russia war on Ukraine, a year later: Will Kenya rethink policies?

Oleg Kotenko, the Commissioner for Issues of Missing Persons under Special Circumstances uses his smartphone to film the unidentified graves of civilians and Ukrainian soldiers in the recently retaken area of Izium, Ukraine, Thursday, Sept. 15, 2022. [AP Photo] A year ago today, the first battalion of the Russian army stormed into Ukraine. In ten hours, they were to infiltrate Kyiv, the capital and most populous city of Ukraine. Backed by additional troops, they were to seize Kyiv and ultimately whip Ukraine into submission. It was not to be. Ukraine resisted, battling to safeguard its cities and people. Satellite images appearing within a week showed a 56-kilometre stretch of Russia's armoured vehicles headed into Ukraine. They soon retreated. It seemed in the initial steps, the Russians had miscalculated, and probably underestimated their target. The Office of the United Nation's High Commissioner for Human Rights (OHCHR) has recorded 18,955 civilian casualties since the fighting begun: 7,199 killed and 11,756 injured. This data was posted on February 12. More than half of those who had lost their lives- 4,189- had been killed in Donetsk and Luhansk regions, where most of the fighting had happened. Unofficial statistics put military casualties at tens of thousands. Some sources even suggest these numbers exceed 200,000. "The most senior US general estimates that around 100,000 Russian and 100,000 Ukrainian soldiers have been killed or injured in the war in Ukraine," BBC wrote in November 2022, quoting Gen Mark Milley, chairman of the US Joint Chiefs of Staff, who also suggested that around 40,000 civilians had been killed in the conflict. Soon after the war began, the whole world felt the effects of these tensions. The US and EU slapped sanctions on Russia. Some Russian banks were ousted from the SWIFT international payments system. Russia's allies seemed to discreetly snuggle closer to the alienated giant as Ukraine reveled in the sympathy of the rest of the world. The Russo-Ukrainian conflict of 2014, which then included annexation of Crimea and capture of Donbas by Russians, had come full-circle. Russia is a global powerhouse in production and exportation of fuels and energy products (63 per cent of total shipments). It also exports metals (10 per cent), machinery and equipment (7.4 per cent), chemical products (7.4 per cent) and foodstuffs and agricultural products (5 per cent). Ukraine is also a top exporter of iron ore, sunflower oils, corn and wheat. From Russia, which is one of Kenya's largest export destinations for tea, Kenya imports iron and steel, wheat, fertilisers, paper and board, copper and oil. From Ukraine, it imports fuel, wheat, crude edible oil, corn and fertiliser. When they spoke, Kenyan delegates asked for the de-escalation of the war. In some instances, they were bold enough to back the sanctions. Former Prime Minister Raila Odinga said, "Even though the sanctions imposed on Russia will harm the economic interests of Kenya and Africa, they are actions that I support. Rather than beat the drums of war let us ring the bells of peace," according to African Business. The war came at a time when the world was still reeling from the effects of Covid-19, which had shocked economies for nearly two years. For Kenya, and many other countries especially in the global south, rising prices of goods battered the economy hard. Kenya sought alternative import destinations for wheat, fertiliser and steel, which were more expensive. This partly exacerbated the already rising inflation. Economist Wahoro Ndohho, the Chief Executive Officer of SNDBX Capital, says that international markets were already disrupted when the war began, and "it looked like it could be fatal to some countries such as China, which had changed drastically with a lot of productive capacity already shut down". The rising prices of food- which the two warring countries have plenty of among their exports- affected many countries. "Prices for every one of these products was bid completely out of reach for most of the third world. Some countries even started hoarding. Ships with goods were commandeered and amid all problems, cost multiplied significantly," says Mr Ndohho. It was a watershed moment for both the global and local economy, says Ken Gichinga, the Chief Economist at Mentoria Economics. "It led to a rise in fuel prices and dislocated food supply chains, thus contributing to a soaring inflation," he says. Dwindling foreign exchange reserves in some countries, such as Kenya, alongside depreciating local currency, nearly shut such countries out of the markets as imports became more expensive. Governments had to rethink their policies. Kenya insisted on subsidies for products such as fuel, whose prices had once again gone up during the post-pandemic recovery period. An explosion is seen in an apartment building after Russian's army tank fires in Mariupol, Ukraine, Friday, March 11, 2022. [AP Photo] He faults the idea of subsidies as a medium-term to long-term solution. "The price of fuel and fertiliser have gone up and that has had a ripple effect through the economy through inflation," says X N Iraki, an economist who teaches at The University of Nairobi. "The government has used subsidies to moderate the prices of food and fuel. Such subsidies are not very effective. They distort the market and do not solve the real problem. They are just first aid." With the conflict having no end in sight, a succession of global problems may just have been what the world, and especially the developing world, needed to come up with a formula that helps them survive this, and future, tempests. "Most countries have made a decision to be independent. They are attempting a re-onboarding of supply chains so they can be self-reliant," says Mr Ndohho. "We will also see more regional integration. The situation is forcing African governments to source raw materials from the region- inside Africa." He says that the first countries to adapt will be the ones to leap ahead of the pack as the world changes for good. "This is about policy agility, and the need for rigorous capacity building." Mr Gichinga says that there will be "a new geopolitical equilibrium" in the case of failed de-escalation. "If there is no clear outline of a solution, markets will begin to price-in the conflict and a new geopolitical equilibrium will begin to form. This will lead to a creation of a new market structure," he says. Prof Iraki also believes that the shift has already happened and the world has to adapt to the new reality. "Prices will adjust and we shall learn to live with high costs. Who thought we could one day pay Sh178 for fuel?" he says. Since the 2014 friction between the two countries, right to the build-up of tensions shortly ahead of the invasion in February last year, there was every indicator a time-bomb was ticking. Did the world ignore the warning signs? "The world was greatly invested in understanding the US-China relationship, which is often referred to as the bilateral relationship of our lifetime. Possibly this is why the Russian- Ukraine war came as a surprise to many, despite the many red flags that had been there for several years," says Mr Gichinga. Prof Iraki says that the world might have dismissed Russian threats as normal sabre-rattling. In this age and era, a plethora of countries are displaying their military might, including North Korea's regular flaunting of new intercontinental ballistic missiles and China's recent performing of military drills in the Taiwanese Strait. As the war threatens to continue into the future, Ndoho says it is time Kenya, and Africa, developed systems that make the continent self-sufficient, in food production. "Many times people have gone all the way to the edge and then it explodes. We should take it seriously. In which case everyone should learn to grow their own food. Food logistics is the reason Africa starves. We can feed ourselves and even support the whole world," he says. Jeopardised globalisation, which experts say was good for price stabilisation but also created unnecessary dependence on some countries, could birth new ways of thinking and doing things in Africa.

Russia war on Ukraine, a year later: Will Kenya rethink policies?

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