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The Ukrainian War, Strategic Interests and Monetary Systems

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Written by Liila Hass, Jyotirmaya Hull-Jurcovic, and Roar Bjonnes

The Russian invasion of Ukraine

On February 24 2022, the Russian Federation invaded Ukraine with devastating consequences for the country and the civilian population. In this David versus Goliath struggle, Russia mobilized over a hundred thousand troops against a much smaller Ukrainian force. Russia has about four times as many soldiers as Ukraine, twice as many tanks and more than six times as many combat aircraft. The huge imbalance in forces is reflected in the defence budgets of the two countries; Russia spends about $78 billion on its armed forces annually and Ukraine $1.6 billion.

Analysts believe that Vladimir Putin had expected a quick victory. However, the Ukrainian forces’ extraordinary resolve and fighting spirit, combined with the massive military aid they have been given from Western countries, have seen Russian troops being bogged down in a protracted war with extensive casualties and loss of military equipment. After a month of fighting, Russia gave up the goal of capturing the capital Kyiv and has since focused its forces in the East of the country.  The hope is to carve out an enclave around the Donbas region and create a land corridor to the Crimea peninsula, which Russia annexed in 2014. Ukraine claims that Russia has lost 20,000 men in the fighting, while Russia acknowledges a much smaller number. The Ukrainian reports of their casualties are conflicting. While President Volodymyr Zelensky claims that in the total war, 2,500 to 3,000 Ukrainian troops have been killed, other reports say that 4,000 have perished in the battle of Mariupol alone.

The toll on the civilian population has been immense. As of April, more than 4.5 million Ukrainian refugees have left the country, the most significant wave of refugees Europe has experienced since World War II. Eleven million, or nearly a quarter of the population, have been displaced from their homes.  The total number of civilian casualties is unclear. The United Nations reported that as of April 22, there had been 2,435 civilian deaths, while President Zelensky claims that 20,000 have been killed in Mariupol alone. Many of the deaths are due to indiscriminate attacks on civilian infrastructure and partly due also to regular execution-style killings of civilians in areas controlled by Russian forces. It is also reported that civilians have been forcefully removed to Russia in the pretext of giving them free passage out of besieged areas.

Military assistance to Ukraine

As Russia is the aggressor, it is legitimate to send weapons and support to Ukraine to help it defend itself. Since the start of the conflict, both the United States and the EU have, as of the time of this writing, contributed 3.2 billion dollars’ worth of military equipment to Ukraine.

A war always ends in one of two ways. Either there is a negotiated end to the war, or one party becomes the loser, incurring a lot of material destruction and many human casualties. No matter how costly the war might be for Russia, the country will not be destroyed. Consequently, we are left with either a negotiated settlement or potentially a near-total destruction of Ukraine. There seems to be no middle way. After all it has invested, it is unlikely Russia will simply withdraw without obtaining at least some of its objectives. At the very minimum, Putin would want to get control over the Donbas region and create a land corridor to Crimea. A guarantee that Ukraine will not join NATO is also presumably an important objective for Russia.

Hence, without strong military support and simultaneous diplomatic efforts to reach a settlement, Ukraine will most likely lose the war and suffer heavy casualties. A protracted war would significantly weaken Russia, and while this might be in the strategic interest of the United States and NATO, it is not in the interest of Ukraine and its people. On a visit to Ukraine on 25 April, Defence Secretary Lloyd Austin confirmed that weakening Russia militarily was indeed the goal of the United States.

While Russia is responsible, Western nations are not innocent

The aggression against Ukraine is inexcusable, and there is nothing that can be said that mitigates the crimes perpetrated by Russia and Vladimir Putin. Even so, Western nations are not innocent and have played a contributing role in creating this tragedy.

All powerful nations have security interests. At the time of the collapse of the Soviet Union, then President Gorbachev asked for security guarantees from NATO that it would not expand eastward to incorporate the former Soviet republics. Both US Secretary of State James Baker and German Chancellor Helmut Kohl assured Gorbachev that NATO would never do such a thing. “Not one inch eastward,” were the words Baker used.

Russia has seen these broken promises as a betrayal. As more and more former parts of the Soviet Union joined NATO, Russia has felt increasingly threatened. Meanwhile, President Barack Obama described Russia as a “regional power”, downgrading it from its former status as a superpower. The response from Vladimir Putin was to invest heavily in the Russian military, developing new sophisticated weapons, including hypersonic missiles.

After Russia’s incursion into Georgia in 2008, and the annexation of Crimea in 2014, Western countries should have realised that if Russia’s security concerns were not addressed, conflicts would increase. When Putin asked for guarantees that Ukraine would be prevented from joining NATO, the United States refused to acknowledge these demands. Instead, the US introduced an enhanced program for Ukraine to join NATO, increased the flow of weapons to the country, and stepped up military cooperation and training.

The Russian foreign minister Sergey Lavrov claimed that Russia had two goals for Ukraine: That it remains neutral and that it be demilitarised, so that no offensive weapons capable of attacking Russia would be placed on its soil. Had the United States been willing to negotiate, war could possibly have been avoided.

If the United States had been faced with a situation like the one Russia found itself in, it would never have backed down. This we can see from the length the Unites States is willing to go to ensure that no potential enemy gets a foothold in neighbouring countries. Let us not forget the Cuban missile crisis when the United States was prepared to go to war to remove Soviet missiles from Cuba.

For Russia, having Ukraine join NATO is, from an American security perspective, as if Russia had put troops and missiles in Mexico, something the United States obviously would never accept.

Ukraine is not unique

 If we compare recent wars, the aggression Russia has released in Ukraine is not an exception.  The main difference this time is that the war is taking place on European soil. When similar or worse atrocities have taken place in other regions, such as the Russian destruction of Aleppo in Syria, the condemnations from the global news organisations and governments were much less pronounced. It seems that Westerners only acknowledge the severity of an atrocity if it is committed close to home, or when it is committed against white Christians.

 Let us also not make the mistake of thinking that only Russia or the Soviet Union is responsible for aggression and war crimes. All superpowers throughout history have committed aggression to reach their strategic objectives.  The invasion of Vietnam, the blanket bombing of Cambodia and the invasions of Iraq and Afghanistan are just a few examples of US aggressions that have killed many more people than the war in Ukraine so far. If we go further back, France’s aggression in Algeria and Vietnam, Great Britain throughout its colonial history and transgressions by Germany, Japan and Italy in the 1930s and ‘40s are just a few of numerous examples. During the World War II, the allies deliberately carpet-bombed cities to destroy the morale of the population.

War Crimes and the International Court of Justice

There have been many calls for Russia to be taken to court for alleged war crimes in Ukraine. These demands are legitimate, and if it is possible to carry them out, it would be a good development. There are precedents for bringing a country to the International Court of Justice for aggression and terrorism.

The country concerned was the United States of America, and the incident was the state-sponsored war against the government of Nicaragua, using ‘Contra’ guerrillas based in Honduras. The court convicted the United States and asked the government to pay USD 17 billion in compensation.

On what basis did the Court rule against the US?[1]. The United States was openly supporting a guerrilla army, which publicly declared its aim to be the overthrow of the government in Nicaragua. President Reagan described the Contras as “freedom fighters” and indicated that the US would continue to support them until the Nicaraguan government changed its policies. The CIA even wrote guerrilla manuals for the Contras, which encouraged the use of assassinations of non-military targets. The US naturally rejected the orders of the World Court and stepped up the violence. Not only that, they gave official orders to the Contras to go after soft targets, meaning undefended civilian targets, and to avoid the Nicaraguan army.[2] Consequently, Russia is not alone in attacking civilian populations. It seems to be a long-established strategy in war.

Putin on trial for war crimes?

 The demands behind bringing Vladimir Putin to trial as a war criminal are also solid. If we applied the same principles that the Allies applied in the Nuremberg trials of Nazis after the Second World War, or the ones applied against Slobodan Milosevic during the Kosovo war, Putin could possibly be convicted for the war crimes committed in Ukraine.

Unfortunately, the United States is in no position to insist on this, as they have deliberately failed to recognise the authority of the International Criminal Court that would have jurisdiction over the case. The reason for this is the fear that the court could be used to prosecute US officials for war crimes. In his book Understanding Power, Noam Chomsky points out that if the principles used in the Nuremberg trials were applied, all US Presidents since Truman would have been hung for war crimes.[3]

In the global power struggle, one thing is constant: Hypocrisy. Politicians often use a different set of standards when judging their enemies than when they judge their own actions.

The Role of the United Nations

Ukraine and the United Nations

Shortly after the invasion of Ukraine, the matter was brought to the United Nations Security Council, where a resolution was put forward demanding Russia to immediately stop the attack on Ukraine. The resolution passed 11 – 1, with China, India and the United Arab Emirates abstaining. The single “no” vote was naturally Russia, one of the five permanent members of the security council with veto powers, the others being the United States, Britain, France and China.

China, Russia, and the United States have all veto powers at the Security Council. This means that none of these military powers can be sanctioned by the United Nations. Ukrainian president Volodymyr Zelensky, in a speech to the United Nations, claimed that Moscow “turns the right of veto in the UN Security Council into a right to kill,” and naturally he has a point.

After failing in the Security Council, the matter moved to the General Assembly, where all United Nations members have a vote, but nobody has veto powers. Here a resolution, entitled Humanitarian consequences of the aggression against Ukraine, which did not mention Russia by name, was passed with 140 votes in favour, five votes against (Russia, Syria, North Korea, Eritrea and Belarus) and with 40 abstentions.

A resolution in the General Assembly might boost morale, but since it has no enforcement powers, it is an empty gesture.

While this is appalling, the trend of superpowers vetoing Security Council resolutions that go against their perceived interests and ignoring whatever the General Assembly says has a long track record. The United States is a primary culprit.

Nicaragua and the United Nations

After winning the case against the United States in the International Court of Justice, Nicaragua went to the UN Security Council, which endorsed the World Court’s decision and tabled a resolution for all states to observe international law. Even though no country was mentioned, everyone knew for whom it was intended. With veto powers in the Security Council, the US vetoed the resolution. The vote was 12-1, with two abstentions: Britain and Zaire.

Nicaragua then went to the United Nations General Assembly, where, as mentioned before, all states can vote, and nobody has veto powers. Here a similar resolution was passed, with only three votes against. These were the United States, Israel, and El Salvador. However, as the General Assembly does not have any power to enforce resolutions, the United States promptly ignored it. The incident was hardly reported or commented on except by political dissidents like Noam Chomsky.

What was the reaction to the open policy of aggression pursued by the United States? Apart from Americas Watch and a few dissidents, this new official terrorist policy of the United States met little criticism. Michael Kinsley of the New Republican wrote that Americans should not be too quick to criticize this policy because “a sensible policy must meet the test of cost-benefit analysis, i.e., an analysis of the amount of blood and misery poured in, and the likelihood that democracy will emerge at the other end.”[4]

The policy did succeed in the end. Before the 1990 elections, the United States made it clear that the attacks would continue unless their favoured candidate won. As a result, the Sandinistas lost, and the candidate supported by the United States won.

Economic sanctions and the global finance system

As a means of putting pressure on Russia, the United States has imposed unprecedented economic sanctions. These include freezing Russian assets worth hundreds of billions of dollars, making it impossible for Russia to repay loans to international lenders or otherwise use their foreign reserves. The sanctions also include preventing any company from doing business in Russia and removing the Russian central bank from the global payment system. Sanctions from the EU and other countries are also important, but as the United States in effect controls the global monetary system, they pale in comparison with those imposed by the United States.

Economic sanctions as a weapon in foreign policy have become an important tool that the United States increasingly uses. Apart from Russia, economic sanctions have been applied to Afghanistan, Belarus, China, Cuba, Iran and North Korea, to mention a few[5].

Since the Second World War, the United States has been in a unique position to impose such sanctions, as the US dollar has been the default global reserve currency which most trade is settled through. The Federal Reserve Bank can effectively restrict or freeze any foreign reserves of US dollars held by anyone anywhere.

The US dollar is the global reserve currency of the world because other countries have agreed that it should be so. Even though it gives the United States unparalleled advantages, such as creating unlimited amounts of US dollars to finance its deficits, other countries have so far considered it in their interest to maintain the status quo and keep trading in US dollars. The United States has also protected this privilege fiercely, and the invasion of Iraq had much less to do with weapons of mass destruction and much more to do with the fact that Iraq started to sell its oil in euro rather than in US dollars.

While sanctions may work against small nations, terrorist organisations and so on, it is a double-edged sword that can cut both ways when applied to major powers like Russia. By freezing its assets and locking it out of the global banking system, Russia has no longer any incentive to stay in a monetary system controlled by the United States. Russia has already taken steps to break away and has announced that all Russian oil and gas purchases will have to be done in Russian roubles. Furthermore, it has already set up an alternative global money system that it claims 13 countries so far have signed up to.

China has for a long time been working on an alternative global reserve currency and has, therefore, an interest in backing Russia in this. As the Chinese economy is far more extensive than Russia’s, it is likely that the Chinese currency, the renminbi, would emerge as a strong contender for an alternative global reserve currency.

The widespread use of economic sanctions by the United States is therefore likely to backfire. As long as the global monetary system, despite the advantage it gave the United States, was considered neutral and functioning for all parties, the benefits of retaining the status quo were much greater than the pain of breaking away. Now that the monetary system is systematically used as a geopolitical tool against anyone the United States disagrees with, the pressure to leave the system increases, especially for major players like China. The massive economic sanctions on Russia are likely to ultimately speed up the collapse of the global financial system, which would hurt the United States more than any other country.

The way forward

The invasion of Ukraine, the indiscriminate destruction of civilian infrastructure, and the killing of innocent people are evil acts deserving of our unreserved condemnation. The fact that other powers, such as the United States, have engaged in similar actions at various times is no mitigating circumstance.

However, we need to accept the current reality to find an optimal way forward. Even if Putin realises that the invasion was a mistake, he cannot afford to back down without having something tangible to show for it. In short, if we are to hope for a diplomatic solution, he must be given a chance to save face and claim he obtained his objectives. His own grip on power depends on being seen as strong and successful, and he would likely rather destroy Ukraine than to be seen as weak.

While it is good to support Ukraine with weapons, equal emphasis must be placed on finding a negotiated settlement that will end the suffering and save Ukraine from destruction. At an earlier stage, President Zelensky indicated his willingness to accept a negotiated peace, but this position was not backed by the United States. The United States’ own interest is now to prolong the war and weaken Russia, just as they funded the opposition in Afghanistan to have the Soviet Union weakened both militarily and financially. This, however, would be devastating for Ukraine and Europe as whole. Ukraine must not become an arena for a proxy war between Russia and the United States.

It is understandable that in the current situation, Finland, and Sweden, who so far have maintained neutrality, are tempted to join NATO. However, this might not be in theirs, nor in Europe’s, best interest. If instead the two nations could remain independent, and come forward as mediators in the conflict, this might ally Russia’s fears and potentially deescalate the conflict.

Possible options for a negotiated settlement could be to agree to an autonomous Donbas region, putting off the final decision on Crimea for ten years, as President Zelensky already suggested, and make provisions for Ukraine to stay neutral and remain outside of NATO, with suitable security guarantees from both Russia and the West.

It is urgent that this path is pursued now, for the longer the conflict continues, the harder it may be to reach a negotiated settlement. The more lives are lost, and the more destruction has taken place, the more inflexible positions on both sides could grow.

Another approach that needs to be supported is the political opposition in Russia. It is important to support credible opposition leaders, such as Alexei Navalny, who was jailed when returning to Russia after being poisoned with the military-grade nerve agent Novichok. Other credible Russian dissidents include the former oligarch Mikhail Khodorkovsky who was in prison for 10 years and now campaigns against Putin from London.

While the terrible events in Ukraine are acute, they are symptomatic of a global systemic problem. To resolve this, something fundamental needs to change in the world order. We need powerful, global institutions willing to condemn war crimes, regardless of who commits them. The hypocrisy of judging one’s enemies with different standards than one is prepared to judge oneself and one’s allies is something we unitedly have to stand up against.

A first step would be to remove the veto rights of the permanent members of the United Nations Security Council so that no superpower could flout UN resolutions with impunity. Furthermore, for a truly democratic global society to function, the powers of the United Nations must be enhanced, so that the organization can genuinely uphold its mandate of preserving peace in the world.

Finally, a reform of the global monetary and financial system is of uttermost importance. We need global, independent bodies working for the benefit of the global community rather than banks and financial systems serving the interest of particular nations, or groups of oligarchs.  

[1] The Court was bound by its rules to apply customary international law only in the manner that it is applied by the country it tries, in this case the US itself. Within this narrow framework, the court ruled that based on the norms of international law the US itself proclaims to adhere to, that the US was guilty of illegal use of force; the unlawful intervention in the affairs of another state; encouraging third parties to commit acts contrary to the general principles of humanitarian law; and finally ordered the US to cease all hostilities and pay around $17 billion in compensation to Nicaragua. It is instructive to read the entire judgment. See http://www.icj-cij.org/icjwww/icases/inus/inus_ijudgment/inus_ijudgment_19860627.pdf.
For the preliminary judgement regarding jurisdiction, see see http://www.icj-cij.org/icjwww/icases/inus/inus_ijudgment/inus_ijudgment_19841126.pdf.

[2] General John Calvin, commander of the US Southern Command, explaining strategy to Congress; see Fred Kaplan, Boston Globe, 20 May 1987.

[3] For details, see the Footnotes for Understanding Power, Chapter Two, Note 42. www.understandingpower.org/files/AllChaps.pdf

[4] Michael Kinsley, Wall Street Journal, 26 March 1987.

[5] For a complete list, see https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information

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Namaskar, interesting and informative article. Just wondering though why there is no mention of nazism and atrocities in Donbass prior to invasion etc..


Ah, still not able to condemn Russian genocide without parroting their fascist talking points, I see. The reassurances you speak of were made orally, before the collapse of the Soviet Union. Plus, all aggression was acted out by Russia, not a single invasion from NATO, because NATO is a defensive pact and would never invade Russia. You know all this, and yet you paint Russia, the repeated aggressor, as the victim. US bad, therefore Russia good, I guess. The brainrot logic of tankies.

Last edited 1 year ago by Tony

“Finally, a reform of the global monetary and financial system is of uttermost importance. We need global, independent bodies working for the benefit of the global community rather than banks and financial systems serving the interest of particular nations, or groups of oligarchs. ” It always comes down to this as this war and all wars basically come down to money grabs, and the power that comes with controlling the monetary system.


Rather than shouting Stand with Ukraine and now Stand with Israel, we need to be standing with the Ukrainian people and the Russian people bearing the brunt of this aggression at the expense of regimes on both sides that care nothing for the people, even their own people.

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