Why Ukraine matters to the ordinary Filipino-A A +A
Sunday, March 9, 2014
UNTIL recently, my knowledge of Ukraine (Crimea in particular) was limited to what I picked up in high school. My English teacher, who also happened to be my mother, Sofia Rivera Bunye, asked her class to memorize "Charge of the Light Brigade" by Alfred Lord Tennyson. At about the same time, we also got to learn about Florence Nightingale.
The "Charge of the Light Brigade" was about one of the most famous battles of the Crimean War. The battle took place in Balaclava in the Crimean Peninsula, the southeastern part of present-day Ukraine.
Florence Nightingale, universally acknowledged as the founder of modern nursing, distinguished herself while nursing the wounded British soldiers who came back from the Crimean War.
The Crimean War (1853-1856) was originally fought between Russia and the Ottoman Empire. Later, England, France and the Kingdom of Sardinia, fearful of the growing influence of Russia, joined the war on the side of the Ottoman Empire. Russia lost to the coalition.
Historians now rank the "Charge of the Light Brigade" as one of the worst military debacles. Because of miscommunications, the British Light Brigade consisting of around 670 officers and men frontally attacked a well fortified position defended by a superior force of Russians and Cossacks.
As a result of a murderous barrage of "cannon to right of them, cannon to left of them, cannon in front of them", nearly half of the attackers were either killed or wounded.
Thanks to Tennyson, however, the military blunder, which nearly annihilated the "noble 600" as they "rode into the valley of death," is now immortalized.
In the Philippines, the surviving commanding officers of the ill-fated unit would have been raked over the coal in endless Congressional investigations.
Fast forward to the present.
Ukraine used to be part of the Soviet Union. When the USSR disintegrated, Ukraine declared its independence from the Soviets in 1991.
But Russia considers Ukraine very strategic. Russia pays a huge sum yearly to Ukraine to base the Russian Black Sea Fleet in the port of Sevastopol, which is located in the Crimean Peninsula.
Ironically, the Ukrainian population is sharply divided among those who are pro-West (Western Ukraine) and those who are pro-Russia. (Eastern and Southern Ukraine)
Until recently, Ukraine was ruled by a pro-Russia government under Viktor Yanukovych. The political crisis commenced in November when the pro-Russia government rejected a trade deal with the European Union only to enter into a similar agreement with Russia.
Thousands of angry Western-leaning protesters took to the streets and eventually deposed the pro-Moscow Yanukovych.
On the pretext of protecting ethnic Russians, who comprise the majority of the population in Crimea, Russian President Vladimir Putin sent in troops to the Crimean Peninsula.
Putin's incursion drew immediate condemnation from the US, Canada, France, Germany, Italy, Japan and the United Kingdom. While military hostilities between the West and Russia may not be an immediate possibility, diplomatic and trade sanctions are now being readied against Russia by the Group of Seven.
How does the current instability in Ukraine concern us?
Because of globalization, it is now a given that any instability in other parts of the world will somehow someway affect the Philippines. The impact on the Philippines, of course, will be a function of the extent, duration and timeliness of the resolution of the crisis.
On the positive side, the ongoing crisis could spur gold prices higher as investors seek a safe-haven asset. I say positive because the Philippines maintains a substantial portion of its international reserves in gold.
Expected to exert negative impact are a possible spike in oil prices and possible holdback of foreign portfolio investments from the local stock market due to risk aversion.
A possible further weakening of the peso against the dollar will be neutral over-all. Depreciation will be bad for importers and borrowers in foreign currency. On the other hand, peso depreciation will be good for dollar earners such as OFWs and the BPO sector. It will also be good for the BSP when it revalues its dollar-denominated assets.