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The invasion of Ukraine by Russia has sparked the most threatening conflict between Russia and NATO partners since the end of the Cold War. Russia and Ukraine were both members of the Soviet Union till 1991 when the Soviet Union disintegrated, and Ukraine proclaimed independence. The dispute stems from Ukraine's choice to strengthen connections with the European Union and NATO, steering clear of Russia, with whom it shares strong social and cultural ties dating back to the Middle Ages. Ukraine is at a critical geographical location, right in the middle of Europe's power struggle. Moreover, Russia and Ukraine have repeatedly accused each other of violating the Minsk agreements, which Germany and France mediated and aimed to cease the conflict and secure a peaceful resolution. Fulfilling Minsk would have given decentralized control to Russian-speaking breakaway provinces, perhaps providing the Kremlin veto power over state policy shifts like joining the EU or NATO.

In 2014, the military conflict in Eastern Ukraine began. According to the International Crisis Group, the conflict killed around 14,000 people between 2014 and early 2022. For over eight years, Ukrainian government forces fought separatists backed by Russia for the administration of parts of Donetsk and Luhansk, also referred to as Donbas. Between September 2014 and February 2015, Russia, France, Ukraine, and Germany signed various iterations of the Minsk agreements, which halted advance force movement and significantly reduced violence. However, the agreements were never executed, and the combat became a trench war, with 75,000 troops fighting along a 420-kilometer front line. The war destroyed the region's economy and major industries, forcing millions of people to relocate, and making the combat zone one of the world's most mine-infested locations.

The Russian government's decision to determine the two separatist republics' independence in February 2022 effectively ended discussions for Minsk compliance. Three days later, Russia launched a military invasion of Ukraine on numerous fronts. As Western nations criticized Moscow's actions, Ukraine's President proclaimed martial law and promised retaliation. In addition, the Russian President clearly stated in a speech days before ordering the attack, that he considers Ukraine to be in Russia's fold, a position it has held since the days of the Russian Empire in the 18th century and throughout the nations' shared heritage in the Soviet Union.

Economic Consequences of the Conflict

The war between Russia and Ukraine is aggravating supply and demand conflicts, negatively affecting consumer sentiment, and affecting global economic growth against a volatile backdrop of rising global inflation owing to increased food and energy prices and interrupted supply chains following the COVID-19 outbreak. In April 2022, the IMF lowered its global growth forecasts for 2022 and 2023, claiming that the economic fallout from Russia's attack on Ukraine will proliferate widely, adding to inflationary pressure and intensifying key policy concerns. Similarly, the World Bank dropped its global growth prediction for 2022 by almost a whole percentage, from 4.1 percent to 3.2 percent.