29 February 2024

Ukraine: the balance of resources and the balance of resolve

Nigel Gould-Davies

The third year of Russia’s war in Ukraine has begun. What are the results of the first two years, and what lessons follow for the future?

2022 was a year of Russian aggression and failure. Not only was Russia unable to seize Kyiv and install its own regime in the first week of the war, but in the autumn it lost huge swathes of occupied territory around Kharkiv and Kherson. By the end of the year, it held just 17.5% of the country – an area equivalent to 0.6% of its own legally recognised territory.

2023 began with a new Russian offensive that petered out. Ukraine then spent months preparing for a counter-offensive, which, despite expectations, barely shifted the front line – though Kyiv’s ingenious Black Sea campaign continues to inflict losses on Russia’s navy.

It might thus be tempting to say that 2022 and 2023 showed, respectively, the limits of Russian and Ukrainian power, and that 2024 should be a year of compromise and peace-making supported by the West. This would be a grave error for three reasons.

Firstly, neither side is ready to compromise. There is no evidence that Russian President Vladimir Putin has abandoned his initial goal of subordinating Kyiv. Having failed to win a short war, he has formed a theory of victory for a long one: wear down Ukraine militarily and outlast the West politically. As he told senior officers last December, Russia’s military production is increasing while the Ukrainians ‘are running out. … They don’t have their own foundation. When you have no foundation of your own … then there is no future. But we do have one.’

Putin seeks victory, not negotiation, because he sees events moving in his favour. Domestic constraints are looser than he expected. Over 300,000 Russian troops have been killed or wounded in Moscow’s war of aggression, yet this has not sparked major protest. Despite huge losses, Russia now has more forces in Ukraine than at the start of the war. The capture of Avdiivka, civil–military friction in Kyiv and a more anxious mood in Ukraine embolden Russia to push further. Europe’s under-delivery of weapons, the United States’ failure to pass a new Ukraine aid bill and the prospect of Donald Trump’s return to the White House all cast doubt on the future of Western support.

Secondly, the war has not reached a stalemate but remains dynamic and unpredictable. Several narratives have been told regarding its course so far, each persuasive until confounded by events – not least when Ukraine broke the mid-2022 deadlock with dramatic advances. There is no guarantee that the present lack of mobility will endure. The war may turn against a weary Ukraine.

Thirdly, while last year saw little change on the battlefield, the wider geopolitics of the war were transformed. NATO is enlarging and reforming. Several European states have signed bilateral security agreements with Ukraine, and the European Union has begun accession negotiations. Russia has few allies, but its dependence on drones and ballistic missiles from Iran, and ammunition from North Korea, has drawn it closer to both. Since Russia and Ukraine each depend on external support, the capacities and choices of the states that supply them will determine the outcome of the war.

In long wars of vital interests, the richer side usually wins. The sinews of power are fed by plenty, and wealth is turned into weapons. Today, the West is over twelve times richer than Russia (even when calculated by purchasing-power parity, the method of comparison most favourable to Russia). During the Cold War, it was only around three times richer than the Soviet bloc. The margin of superiority is vastly greater now, and the balance of resources decisively favours the West.

But the balance of resolve favours Russia. It now spends around 7.5% of its GDP on defence and security, while only 11 NATO members spent more than 2% last year. By devoting a larger slice of a smaller pie, Russia’s repressive regime may prevail against a prosperous coalition of democracies. It commands fewer resources but possesses a stronger will to use them. As a result, Ukraine is now heavily outgunned and faces growing pressure on the battlefield.

Winning Ukraine

The West urgently needs a geo-economic strategy for the war to harness its superiority in economic power to its security imperatives. This should have three elements.

Firstly, the West should mobilise military-industrial production for Ukraine and for itself. This will match means to security ends. It can easily afford to spend the relatively modest sums – perhaps as little as 0.25% of GDP for military aid to Ukraine – this would require. The decision to do so should have been made in 2022. It should now be done without delay.

Secondly, the West should move towards a general prohibition on trade with Russia. Successive rounds of sanctions have constrained Russia more effectively than headlines suggest, including a 40% fall in the value of global exports of high-priority battle items to Russia. But these measures are reactive and incremental, and they still permit plenty of trade. Since every transaction makes Russia better off, the goal should be to eliminate as many as possible. As with other sanctions regimes, exceptions may be carved out. But the presumption should be that no Western company helps a regime that threatens vital Western security interests.

Thirdly, the West should use the US$300 billion in Russian Central Bank assets that have been frozen for the past two years to provide urgent support for Ukraine and ease the pressure on Western taxpayers. There is now a clear legal path for doing so. Concerns about financial instability voiced by Europeans, among others, are overblown. Freezing the assets was a more decisive step than seizing them, and it caused no market turbulence.

Together these measures could mobilise Western economic strength, constrain Russia, and sustain and arm Ukraine. This would align financial and industrial power with moral and political imperatives. The alternative is a strategic failure to match means with ends that could lead to disaster.

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