Editor’s note: On Wednesday, Quito radio station La Voz de los Andes hosted three political experts in a discussion of what Russia’s invasion of the Ukraine means for Ecuador and world. They were Carlos Pereira, a retired history professor from San Francisco University in Quito; Gustavo Yépez, former Deputy Minister for Foreign Affairs, and Cristian Miller, former ambassador to Ukraine and Belgium. The following is a shortened transcript of their discussion.
What are you biggest concerns about Russia’s invasion of the Ukraine?
Carlos Pereira: First, we must acknowledge that there is much we do not know about the situation since it continues to develop. On the one side, we hear that the invasion is going badly for Russia and that they have encountered unexpected resistance from the Ukrainian military and ordinary citizens. On the other side, we know that Russia has seized several cities, inflicted serious damage to military bases, airports, fuel depots and other infrastructure and this could affect Ukraine for years. And, of course, the invasion is continuing so the news is changing by the hour.
In terms of what it means for Ecuador, first, we are concerned for our citizens living in Ukraine and we must do everything to assure their safety. After that, there is concern for geopolitical stability in Europe and beyond. Then, there is the issue of business relations with both Russia and Ukraine. Trade between Russia, Ukraine and Ecuador amounts to almost $2 billion annually and this will certainly be disrupted, at least for several months, and could be a very serious implications for our economic recovery from the pandemic. Some of the trade losses will be made up by income from higher oil prices but this inflation is not something we should count or long-term.
Gustavo Yépez: I am very worried that this confrontation will result in nuclear war. On Sunday, Vladimir Putin announced he is preparing his nuclear weapons for possible use. This threat came with no direct provocation as far as I can determine. Neither the U.S. or the European countries has said anything about nuclear war. However, some EU countries have announced they will supply arms to the Ukraine military and Russia could consider this a provocation.
What happens if Putin’s invasion goes badly? What happens if it stalls and suffers embarrassing loses? And then, there is impact that the economic sanctions will have on Russia. What if the run on Russian banks continue and the value of the ruble continues to drop? What will be the impact of the ban on Russian banks from international financial systems? What if their oil and gas exports are reduced?
I worry that if Putin is pushed into a corner, if he fears humiliation and even a revolt from his own people who suffer from his adventurism, he may use his nuclear bombs. As a devoted student of history, I see parallels between Putin, Mussolini and Napoleon. He is a small man, hyper-conscious of his diminished physical stature, but he has a massive ego. As I say, I hope my fears are unjustified about nuclear war but if that happens, the implications for world – and Ecuador – are too horrible to contemplate.
Cristian Miller: I agree nuclear confrontation would be horrible and that’s probably why I don’t think about it. As an optimist, I believe solutions will be found for the crisis although I don’t know when. Beyond that, I suggest we consider the invasion from Putin’s perspective.
In many respects, Russia has been in decline for years in terms of military and economic power and Putin is aware of this. He sees a once-great empire being reduced to a second-rate state.
The biggest source of Russia’s economic power is oil and gas. It is a major player in the energy markets but it has little else to offer and is painfully aware of the world’s move away from petroleum. I read an excellent assessment last week of Russia’s predicament by a U.S. economist. He said Russia is like a big gas station with nuclear bombs.
It is also important to understand Putin’s fear of Ukraine joining NATO – and also of Finland and Sweden joining. If this were to happen, he would be bordered not only on the west but on the south and north by NATO members.
The media in the west, and in Ecuador, is portraying the invasion in black and white terms of good people against bad people and this is a mistake. It is much more than a fight between totalitarianism and democracy, capitalism and communism, a madman’s adventure against innocent people. It is none of these things.
We must look at a thousand years of history to understand the connections and conflicts between Russia and Ukraine. We must be honest that Ukraine, like Russia, is still controlled by oligarchs, many of them very corrupt. Most people do not understand that the massive amount of money laudering occurring in Ukraine is a threat to the Russian economy.
What does the invasion mean for Ecuador
Yépez: If this continues for a long period, there will be serious pain for Ecuador’s economy, not just because of losing Russian business but because there will be a ripple effect throughout the world economy. There are already economic sanctions on China imposed by Europe and the U.S. and now we have them on Russia too. As a developing nation, Ecuador will suffer much more than the more prosperous countries that have imposed these penalties if a resolution is not reached soon.
The world is in a dangerous place today. So is Ecuador, and I fear we will soon realize this is many painful ways.
Miller: I am concerned we could see a realignment of geopolitics, which involves a new arms race and a new economic order. And China, is a major player in all of this, a much bigger one than Russia. What happens, for instance, if China is emboldened by the Russian invasion and attacks Taiwan? This is not out of the question.
Pereira: There is one huge benefit for Ecuador from this crisis, and that’s the rising price of oil. Prices are already above $100 and are headed higher. Despite the fact that a significant part of a windfall will go to pay off the debt to China, there will be more money for other projects, including neglected infrastructure. And it is not insignificant that the country might pay off the Chinese debt at a faster rate.
It would be foolish to celebrate the windfall under the circumstances and it is possible that it could end as quickly as it is beginning. On the other hand, I see this crisis continuing for months, possibly for years.
Yépez: Back to my original question, I think we will remain spectators of events for the next few weeks or even months and there will ongoing pressures long beyond the invasion. We simply do not know where this will lead and the damage it will ultimately inflict .
For now, let’s do everything we can to take care of our people in Ukraine, especially the students. Otherwise, we should all pray for peace.