Share Prices & Company Research


27 April 2022

Kyiv or Kiev: A History of Ukraine and Russia

To say that Ukraine and Russia have endured turbulent pasts would be a dramatic understatement. From two World Wars, civil wars, the Cold War, the dissolution of the Soviet Union and now the invasion of the former by the latter, Ukraine and Russia have known conflict for much of the past century and far beyond.

This latest conflict, which began in the early hours of 24th February, has brought the two countries’ shared histories and divided futures into the global spotlight. The war has also, perhaps ironically, popularised the Ukrainian spelling of the country’s capital city, Kyiv, over the previously common Soviet-era spelling, Kiev.

Since the collapse of the Soviet Union in 1991, Ukraine has followed its own path. The country stepped out from behind the Iron Curtain and became a sovereign, democratic nation. However, that path has been far from smooth. Under Ukraine’s first democratically-elected President, Leonid Kravchuk, the economy shrunk by 9.7%-22.7% per year between 1991 and 1996 due to hyperinflation and production decline, while GDP almost halved between 1990 and 1994; it wasn’t until 2000 that Ukraine saw its first year of economic growth. Kravchuk’s successor, Leonid Kuchma, became embroiled in a number of corruption scandals, while Viktor Yanukovych, President from February 2010, stood accused of abandoning ties with the West and the European Union in favour of pursuing closer relations with Russia. More recently, tensions have escalated after Russia’s annexation of Crimea in 2014 and its alleged role in backing pro-Russian separatists in the conflict in the Donbas and Luhansk regions of Ukraine, which the Kremlin now recognise as independent states.

The threat of the current war has been growing since that annexation and the subsequent conflict in eastern Ukraine. However, President Putin’s suggested motive for invading Ukraine goes back nearly three decades. Ukraine has openly expressed its desire to align itself more closely with its western neighbours since the 1990s. Its aspirations of joining the European Union (EU) and the North Atlantic Treaty Organisation (NATO) would increase the country’s security in the face of external threats and allow it to join a host of EU programmes.

However, Ukraine’s membership of NATO and the EU would mean concrete ties with many of its western neighbours, including the US, something which the Kremlin sees as a considerable threat to its national security, sphere of influence and its borders. In December, President Putin said Russia would seek “reliable and strong long-term security guarantees” from the US and its allies “that would exclude any further NATO move eastward.” Ukrainian President Volodymyr Zelensky has now said that the country’s citizens should accept that it will not join NATO. However, some commentators and news outlets have suggested that the origins of Russia’s invasion of Ukraine goes back further, with President Putin previously describing the collapse of the Soviet Union as the “disintegration of historical Russia.”

Putin, a former KGB operative, said in a television address earlier this year that “Ukraine is an inalienable part of our own history, culture and spiritual space. These are our comrades, those dearest to us,” while Vladislav Surkov, Mr Putin’s righthand man, said in a 2020 interview that “there is no Ukraine.” There are, then, multiple ways in which the Kremlin seeks to justify its “special operation” in Ukraine to the Russian people. Although the West, most notably NATO, is unable to put boots on the ground without causing a further escalation of tensions, a host of countries, alongside the EU, have imposed a number of economic sanctions on Russia. Seeking to cripple the Russian economy, measures from the West include sanctions on political individuals and wealthy oligarchs including Vladimir Putin himself and Foreign Minister Sergei Lavrov, as well as the high-profile sanctions imposed on Chelsea Football Club owner Roman Abramovich which have put the club’s future in serious doubt. Sanctions have also hit the heart of the Russian economy, with imports of Russian gas and oil being banned by a number of countries; some nations have frozen the assets of Russia’s central bank, freezing its £470bn of foreign currency reserves, while some Russian banks are being removed from the Swift international payment system which is used to transfer money across borders.

A growing number of international companies have suspended their operations in Russia, including McDonalds, Coca-Cola and Starbucks. As the West seeks to strangle the Russian economy in a bid to convince President Putin to lay down his arms, President Zelensky has become a household name for his unwavering commitment to his country and its people in the hardest of times.

This latest conflict has been branded by many as a personal crusade by President Putin, one born out of bitterness with the aim of reclaiming territory his predecessors lost in the dissolution of the Soviet Union. Of course, this is just one way of looking at this war, with Putin seeking to halt the eastward expansion of the NATO bloc being another.

Whatever his reason for invading Ukraine, a sovereign, democratic nation, the true economic, social and, most importantly, human impact of this war is yet to be fully felt.

Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned. The value of investments and any income derived from them may go down as well as up and you could get back less than you invested.
Kyiv or Kiev: A History of Ukraine and Russia
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