STEVEN KUO: How SA can protect itself from the war in Ukraine

The war in Ukraine has upended the security policies of major powers worldwide. Sweden and Finland, both of which followed a security policy of neutrality throughout the Cold War and maintained this posture when it ended, filed applications to join Nato on Wednesday.

The announcement that they had applied to join Nato, a 30-member military alliance led by the US, is significant. It reverses a policy of neutrality maintained by the two countries for seven decades since the end of World War 2.

The move by Swedish Prime Minister Magdalena Andersson and Finnish President Sauli Niinistö also highlights the extent of Russian President Vladimir Putin’s miscalculation in invading Ukraine. If his objective was to stop Nato expansion and demonstrate Russian dominance in Eastern Europe, he has failed, achieving precisely the opposite.

Russia’s war in Ukraine was supposed to be lightning fast, installing a Kremlin-friendly regime in Kyiv at the cost of nonconsequential Western protests and superficial sanctions. But not only have Russian forces failed to take Kyiv, their campaign in eastern Ukraine has now ground to a halt thanks to valiant Ukrainian defence.

Led by Germany, EU member countries have begun a serious programme of embargoes against Russian oil and gas, designed to hurt the world’s third-largest oil producer and main supplier of gas to the EU. Just as the global economy was about to emerge from Covid-induced paralysis, the energy embargo against Russia has pushed energy prices sky high, with the knock-on effect of inflation and increased risk of a global recession.

Instead of a lightning attack of shock and awe along the lines of Russia’s attack on Georgia in 2008, all the indications are that the Ukraine war will drag on for years, bringing misery in Europe and rest of the world. Putin has not only failed to revive the great Russian empire, he has managed to galvanise Western opposition to his ambitions.

Higher energy and food prices will affect the poor first. We can expect more rioting and protests

For SA and the Southern African Development Community (Sadc) region, the fallout from the conflict in Ukraine will be mixed. However, it is important that the region responds appropriately. Higher oil and gas prices caused by the embargo on Russia will stimulate the renewable energy industry. This is positive for Sadc, whose members are leading producers of copper, nickel, lithium and associated metals that are essential for the production of batteries and electric motors.

Higher energy and food prices will affect the poor first. We can expect more rioting and protests. Former president Jacob Zuma’s arrest in 2021 was only the spark that led to the July riots; the dry tinder box was a dissatisfied population suffering from poverty and unemployment.

As the Zondo state capture commission has shown, years of corruption and rent-seeking behaviour by ANC-appointed cadres at SAA, Transnet and Eskom have led to the degeneration of vital infrastructure. Without reliable transport between SA’s mines and the ports, and without a reliable supply of energy, SA will suffer from the ill effects of the war in Europe and be unable to take advantage of higher commodity prices.

From an SA perspective, the following should be done to counter the shifting winds caused by the war in Ukraine:

• The long-promised large infrastructure construction programmes should be implemented without delay.
• The mining sector should be freed from political interference so it can thrive again and be the main driver of SA and the region’s economy.

President Cyril Ramaphosa should ensure these long overdue major infrastructure projects are expedited, especially in the transport and renewable energy sectors.

The lesson across the developing world is that only once basic infrastructure such as transport networks function properly and electricity supplies are in good nick can the rest of the economy thrive. The problems of unemployment, inequality, poverty and related social ills cannot be tackled without a well-functioning and thriving economy.

• Dr Kuo, a former lecturer at the Shanghai International Studies University in China, is adjunct senior lecturer in the University of Cape Town’s Graduate School of Business.