The Black Sea is not only the great exit door for ukrainian exports or one of the main tourist claims of the country, is also a huge hydrocarbon deposit. According to some estimates, Ukraine’s exclusive economic zone alone could contain two trillion cubic meters in gas reserves. Almost all of them are yet to be developed, a project that had begun to take off when Russia illegally annexed the peninsula of crimea in 2014, depriving its neighbor of “80% of its gas and oil deposits in the Dead Sea & rdquor ;, according to the Ukrainian Ministry of Energy. Moscow soon took control of the swag. His forces on the peninsula expropriated the subsidiaries of the Ukrainian state conglomerate Naftogazassets worth billions of euros that were eventually transferred to Gazpromthe Russian gas giant controlled by the Kremlin.
Much has been said about the reasons that led to Vladimir Putin to order the invasion of Ukraine on February 24. From NATO’s approach to its borders to the fanciful “denazification” of the Ukrainian leadership, from the imperial vagaries that hides its revisionist discourse from its obsession with preventing Ukraine from leaving the Russian sphere of influence. But very little has been analyzed economic component of the Russian offensivedespite the vast ukrainian resourcess, that make the country a agricultural and mineral superpoweras well as a lucrative gold mine for energy exploration.
lithium and other minerals
Ukraine produces 12% of the wheat consumed in the world, 16% of its corn18% of the barley global or almost half of the sunflower oill. But at the same time it has some of the largest world reserves from uranium, iron, titanium, mercury or magnesium. Something similar to what happens with the rare minerals that lie in its subsoil and that put it in direct competition with ChinaAustralia and the Democratic Republic of Congo, its main producers. The best known is the lithium, a fundamental element for the production of batteries used by electric cars. Last year, just a few months before the war began, kyiv began auction licenses to exploit its reserves of lithium, cobalt and nickel. Australian and Chinese companies won the first contracts, concentrated in Donetsk (this) and Kirovograd (center) and now stranded by war.
The bulk of so much wealth is found in the East and the south of the country, precisely the areas occupied by Russian troops. “I don’t think economic resources were part of Putin’s calculation to invade Ukraine. They weighed more geopolitical reasonsbut it is clear that the economic benefit is an important incentive for the Russians & rdquor ;, Olha Pindyuk, a Ukrainian economist at the Vienna Institute for International Economic Studies, believes in an interview.
“Judging by the course of the war so far, it does not seem that Russia is seeking to seize Ukrainian industry, but destroy your economy. There is no other way to explain why they are bombing grain warehouses and metallurgical plants or blocking ports to stop exports & rdquor ;. According to World Bank projections, the Ukrainian economy will shrink by 45% this year, or what is the same, it will lose almost half its size. That idea is reinforced by what Russia and its Ukrainian allies have done in the occupied areas of Donbas since 2014, a third of its territory until the start of this latest invasion.
Destruction of the Ukrainian economy
Unlike what happened in crimeawhere Moscow launched a development strategy with investments in new roads, power plants, transmission lines or a bridge of 3,500 million euros to connect the peninsula with the Russian territory, in Lugansk Y Donetsk abandonment has been the norm. “None of the factories and companies in the region operate at full capacity. Most are unemployed or have been vandalized or looted & rdquor ;, says Ukrainian liberal politician and blogger, Anton Shvets. “It must be emphasized that these factories have not been destroyed by the war, but by the bad management Y lack of investment. They have basically let the factories die & rdquor ;.
However, the industry of a country is not the same as the economic potential hidden in its resources. And in the case of Ukraine only the farming has been fully developed, something that has not happened with the mining and the energy sector. Indeed, Ukraine remains a net energy importerdespite having the second largest gas reserves in Europe and the octaves of coal in the world.
Related news
A circumstance that the experts explain by the priority that the Soviet Union granted to the extraction of gas in the deposits of western siberia in the last third of the last century, in which the Ukrainian specialists in the field also overturned. “As a consequence of this brain transfer, Ukraine’s gas resources were left underdeveloped, largely unused and partially unexplored,” political scientist Robert Muggah writes in ‘Foreign Policy’.
All this means that the war in Ukraine hides a juicy booty for Putin, no matter how much your country is a raw materials superpower. At a minimum, it will be able to neutralize a tough competitor, which had begun the privatization of its energy sector and opened the door to foreign exploitation of its minerals, projects now stopped by the bombs.