Belarus, Russia and Ukraine: Russia’s full-scale invasion of Ukraine

Event

Since Russia has amassed troops at the border with Ukraine, tensions between Ukraine and Russia have become very high. Intense diplomatic negotiations have failed to defuse the tensions so far. On Sunday 20 February, Belarus announced that Russian troops would remain in Belarus whereas they were supposed to leave the territory after the joint military exercises that ended on that day. On Monday 21 February, tensions were further exacerbated by Russia’s recognition of the independence of the republics of Donetsk and Lugansk and the decision to send “peacekeeping” forces in the separatist territory. The recognition violates the Minsk Agreements – that both parties have failed to implement so far – and reduces hope for a diplomatic solution to the conflict. Moreover, Putin’s non-ambivalent speech to the nation and well-prepared media campaign can be interpreted as a way to prepare Russia for a war. On Thursday 24 February, Russia launched a full-scale invasion of Ukraine and demanded Ukraine’s army to lay down its weapons.

Impact

This could be the beginning of the largest armed conflict in Europe since the Second World War. No short-term resolution is expected. In this context, Credendo decided to downgrade Ukraine’s short-term political risk rating to category 7/7. Moreover, given the heightened risk that severe sanctions be imposed on Russia, Russia’s short-term political risk rating was downgraded to category 5/7. Last but not least, given that a part of the Russian troops launched Ukraine’s invasion from Belarus, and taking into account Belarus’ location – Belarus is a key ally of Russia –, the country is likely to suffer from the ripple effects of the conflict. Hence, Belarus’ short-term political risk rating was downgraded to category 6/7.

Analyst: Pascaline della Faille - P.dellaFaille@credendo.com