The ongoing Russian aggression in Ukraine has influenced the economies of the three countries engaged in the conflict. While the similarities in the institutional setups of these economies have resulted in some resemblances regarding the results of this impact, there are also notable differences in what has happened in them.

Russia’s brutal war against Ukraine has dramatically exacerbated Kyiv’s dependence on the West to keep the economy afloat. Ukraine’s finance ministry estimates that in 2022, 38.6 per cent of the country’s budget came from external donors in grants and credits while Ukraine’s GDP, according to the International Monetary Fund, contracted by a third.

As Russia continues to bomb Ukraine’s power grid and destroy its infrastructure, the country’s economic projections for 2023 are devoid of optimism. For the country to survive, it needs economic assistance from abroad – and this is where matters get complicated. While Brussels recently gave the green light to the long-awaited macro-aid package worth 18 billion euros, the latest economic forecasts also spell trouble for EU economies, with the eurozone’s GDP growth expected to slow to 0.3 per cent.

Since February 24th 2022, Georgia’s economic ties and dependence regarding Russia have markedly increased, leading to heavy criticism of the Georgian Dream-led government about its lack of transparency around ties to Russian business interests. Most obvious among these concerns are those centred on the party’s founder, Bidzina Ivanishvili, the billionaire and former prime minister who made his fortune in Russia before entering Georgian politics.

Nearly one year on from Russia’s invasion of Ukraine, a stroll through the streets of Tbilisi provides a visual reminder of both the ongoing conflict and the Georgian population’s prodigious support for the Ukrainian people. With billboards flashing blue and yellow and Ukrainian flags nearly matching their Georgian counterparts in representation, it is unsurprising that a March 2022 poll commissioned by the National Democratic Institute (NDI) showed that 98 per cent of Georgians support the Ukrainian people.

The nature of the crisis in Belarus is the same as in other countries of the region, with the collapse of old Soviet structures in the economy, society, politics and ideology. Alyaksandr Lukashenka does not understand the urbanised modern society he is trying to rule. In order to re-establish control, his regime is trying to move the society backwards. Repressions will be extremely costly for Belarusian society, but Lukashenka’s goal is unlikely to be achieved.

The past two years saw growing pressure from western sanctions on the Belarusian regime. Each move Alyaksandr Lukashenka took since 2020 has further limited his room for manoeuvre. After each of his decisions – the brutal crackdown of the 2020 protests; the repressions that followed; the grounding of the Ryanair plane; and finally, the support for the Russian invasion of Ukraine – a new wave of sanctions was introduced.

Given the systemic difficulties of the Russian army, the mobilisation announced by Vladimir Putin on September 21st may not change the situation on the front very much at all. And when considering the economic and social costs of the war for Russia internally, which are growing at an alarming rate, Putin may have gained some time, but he has not solved the problem.

Armenian economists, entrepreneurs and private business owners are warning about hardships that have arisen due to sanctions against Russia following its invasion of Ukraine. The risks and consequences for Armenia’s economy are severe.

Russia’s war against Ukraine has gone beyond the borders of the conflict between the two states and has knocked on the doors of all countries, targeting their economies first. The invasion of Ukraine by Russian troops led to a global economic backlash against Russia in the form of additional economic sanctions. These complement the package of sanctions initiated in 2014 following the annexation of Crimea and the war in Eastern Ukraine. These restrictions are still valid and have already had significant negative impacts on the Russian economy.

Last year, COVID-related shortages of everything from hand sanitiser to canned tomatoes reminded the world that, for all their depth and sophistication, supply chains are fragile things. As economic uncertainty lingers and global food prices continue to rise, Russia may be on the cusp of restoring its 19th century legacy as the world’s breadbasket, particularly for the commodity-strapped developing world. But how much is all that wheat actually worth in this day and age? And can an agricultural boom really reshape the Russian economy?

A combination of socio-economic factors observed in Russia not only indicates that the impact of the coronavirus crisis on the country's economy will be profound, but that the recovery might take longer than it appears today. Much will depend on the authorities’ readiness to support household incomes and business activity through accumulated reserves and borrowings.

Russia has approached the beginning of the coronavirus pandemic with the economy not in great condition. Back in 2010-2012 the Russian economy was growing faster than the world economy. Yet since then, its global share has fallen by about one-fifth. In 2014, following the events in Ukraine, the Russian economy suffered a double blow as a result of lower oil prices and the impact of sanctions imposed on it by the United States, the European Union and a number of other countries.

Most countries of Central and Eastern Europe that are now members of the EU developed impressively since the collapse of the centrally planned economy. Yet, Poland and other countries in the region still lack their own capital to compete on a global scale. The merger of Poland’s two state-owned refineries, Orlen and LOTOS, could illustrate a solution – selective state-ownership in crucial sectors.

Economic power is not shared equally across the European Union. Only one out of all EU companies in the Global Fortune 500 ranking is based in one of the new member states that joined the union after 2004. The remaining 112 companies are based in the “old” EU. Yet, as the case of a merger of two state-owned Polish oil companies shows, this unparalleled level of inequality is not being addressed by Brussels.

While both in the United States and Europe, the Federal Reserve, European Central Bank, and Bank of England all rushed to help their ailing economies during the pandemic, the Central Bank in Russia has done nothing except organise small currency interventions supporting the rouble.

The economic diversification and growing relations with actors other than Russia presents both great opportunities and challenges to the Eastern Partnership states. This includes deepening economic ties with the European Union, but also with China and Turkey. Meanwhile, the outlook for Russia regaining its influence in the region, or at least halting this trend, looks bleak.
In the last few years, several countries participating in the European Union’s Eastern Partnership programme have been working to deepen their economic relationship with the EU, as well as with Turkey and, to a lesser extent, China. These changes in economics will have long term geopolitical consequences. Overall, they come at the expense of Russia’s interest, which remains influential but will be unable to halt the changes with its own economic tools. This is why the Kremlin will try to promote its interests by any means necessary, including force.

Despite some initial disruption, the Kremlin’s efforts to counteract and mitigate the impact of sanctions have been quite successful. The state-led redistributive model has ensured that the authorities are well placed to respond to any disruption caused by the sanctions. In essence, the effect of the sanctions has reinforced a highly interventionist economic policy and a dominant role of the state in driving economic growth.

Is Russia’s economic policy a success or failure? The answer may strike many as self-evident. By most conventional measures, the economy has performed poorly in recent years. Between 2000 and 2008, Russia’s economy grew by an impressive seven per cent per year, driven by both rising oil prices and substantial productivity gains. Over the past ten years, however, Russia’s real GDP has risen, on average, by just one per cent per year.