A war is not just an armed conflict. It comes with multidimensional aspects. One of them is business dynamics. Here’s how.
The last 15 days have been very eventful for the Ukraine War, which is already in its second year. On the 4th of April came a report called “Rapid Damage and Needs Assessment”, jointly released by the government of Ukraine, the World Bank Group, the European Commission, and the United Nations. Acronymised into RDNA2, it estimates that the cost of reconstruction and recovery in Ukraine is around $411 billion, covering the period 2023 to 2033! And the war is not yet over.
The World Bank press release says, “The RDNA2 provides a comprehensive evaluation of war impacts across twenty different sectors. It quantifies the direct physical damage to infrastructure and buildings and describes the impact on people’s lives and livelihoods.” The areas with the largest spending are transport ($92 billion), housing ($69 billion) and energy ($47 billion). Almost $40 billion is estimated for ‘explosive hazard management’.
On the 14th of April came a news item that is quite a shocker, though not covered far and wide.
This came from the website of celebrated US journalist Seymour Hersh. The news item goes on to say…
“On his website, Hersh, citing sources, claimed, “The Ukrainian president and many in his entourage have been skimming untold millions from the American dollars earmarked for diesel fuel payments. One estimate by analysts from the Central Intelligence Agency put the embezzled funds at USD 400 million last year, at least.”
The level of corruption in Kyiv is “approaching that of the Afghan war, although there will be no professional audit reports emerging from Ukraine,” according to Hersh’s sources.”
The same day, another event happened back in the US that got a large part of the world glued to its screens for more updates.
The news report goes on to say…
“According to The New York Times, a “trail of digital evidence” pointed to Teixeira as the leader of the private group on Discord called Thug Shaker Central, where the documents surfaced.
The embarrassing security breach — which included top secret documents — has revealed US unease over the viability of a coming counteroffensive by Kyiv’s forces against Russian troops as well as concerns about Ukrainian air defences and pointed to US spying on allies, including Israel and South Korea.
President Joe Biden addressed the leak during a visit to Ireland, saying he was “concerned” but that the intelligence community and Justice Department were “getting close” to identifying the source of the leak.”
And then, on the 18th of April, came another interesting infographic from Statista about how the rampant inflow of wheat from Ukraine into certain Eastern European countries is destroying the domestic farmer income due to the rock bottom prices the imported wheat is going for. The locals are almost up in arms about an impending economic conflagration!
Pink Floyd once sang,
“Dogs of war and men of hate,
With no cause, we don’t discriminate.
Discovery is to be disowned,
Our currency is flesh and bone.”
Connect the dots, and you once again prove to yourself that war is a terrific business for those in the shadows.
The data chart by the Council on Foreign Relations released on the 1st anniversary of the war shows that just the US itself has provided military “aid” worth US46.6 billion to Ukraine. Obviously, this is not a donation but a sale.
Even if some portion, if at all, were not to be charged, the government back home would obviously compensate the organisations who have been made to show this altruism. “Security Assistance” itself is more than US18 billion, ensuring the much-needed employment and engagement of companies like Defion, Aegis and Constellis. Remember Blackwater in the Iraq War? Well, these are the big daddies of Blackwater and a counterforce to the Wagner Group that Russia is using in the war in Ukraine.
Just have a look at the sheer range and depth of the US arsenal that Ukraine seems to have “tapped” into in the chart below, courtesy of the US Department of Defence. This is a roaring business for the likes of Lockheed Martin, Raytheon, Boeing, Northrop Grumman and General Dynamics. They are all back in the pink of health after a lull in big military engagements across the world, except for that in Yemen. War has definitely been good for them!
A research briefing by Claire Mills to the UK House of Commons dated 30th March states that the UK had started selling weapons and tanks to Ukraine in December 2021, almost 3 months before Russia made its first move. So, the sleepy arms industry in the Western world cranked up on the meticulously created threat perception on both sides of the border for months before Russia took the bait.
Russia literally took the bait, hook, line and sinker, as they say. The business of war in the European sector will always be better than any in the Middle East or Africa, or South America. The opposition in those parts of the world is so rudimentarily armed that serious weaponization is not required by the aggrieved nation that needs to be ‘protected’ or ‘liberated’. And that means low billing.
In a looming economic downturn, when all economists and analysts are predicting a recession, something substantial is required to move the economy into a higher gear. A high-tech war is the best solution. And for it to be high-tech, it has to happen in Europe. And for Western Europe to benefit from it, it has to be in Eastern Europe. A simmering issue of NATO membership and an unsure nation like Ukraine with a new leadership keen to prove a point was a wonderful convergence of anxiety and threat.
Russia was being pushed to the wall gradually on the issue of NATO flexing its muscles, and a leader like Putin could easily be put on the ego trip of establishing who the boss is! On the east, China under Xi was stealing a march when it came to ‘preserving national security’ and had become a bigger counterforce to the US. Russia had to take the bull by its horns and establish authority once again as China was taking a beating post-Covid. It all added up very well for the floundering Western economies.
Just imagine the rewards of the war for the Western world – almost USD 60 billion worth of arms and security services and a whopping USD 400+ billion of reconstruction of a devastated Ukraine. China, too, must be calculating how much business it can do in Russia after this is over.
The longer this goes, the bigger the ‘billing’ for all the big US, UK, German and French corporations. This is why the very thought of a ceasefire or a sudden truce is thrown out of the window. Russia has uttered a few feeble words on a possible truce, but the West will not have it. And Ukraine has been adequately doped into refusing to at least start talking. The UN, like all times, continues with its posturing and pleading for peace and humanity to prevail.
The IMF released an outlook for 2023 in mid-April. The projections for UK, Germany and France do not look good at all, in spite of the spoils of the Ukraine war kicking in. Imagine if there were no war at all. These economies would be in serious trouble with the prospect of some more corporate acquisitions inevitable by China and India.
War is certainly good business.
First, the weapons makers.
Then the security companies.
Then billions of dollars of reconstruction loans.
And the re-entry of brands to sell you almost everything, from toilet paper to tuxedos.
All in the name of being one with the civilised world, finally.
I end with the opening lyrics of a Roger Waters song,
Miraculous you call it babe,
You ain’t seen nothing yet!
They’ve got Pepsi in the Andes,
They’ve McDonald’s in Tibet,
Yosemite’s been turned into
a golf course for the Japs,
And the Dead Sea is alive with rap.
It’s a miracle, another miracle!
By the grace of god almighty,
And the pressures of the marketplace,
The human race
Has civilized itself!
Also Read: Crony capitalism: Electorally savvy but disastrous for economy