The ripple effects of Russia's audacious invasion of Ukraine will wipe out 15 years of economic gains by the end of 2023, a global banking trade group reported Wednesday.
The Institute of International Finance estimated the Russian economy will shrink by 15% this year and another 3% in 2023. Historically high oil and and natural gas prices have provided some protection from global sanctions, and the Russian central bank has raised interest rates and imposed capital controls to keep money from fleeing the country.
But the institute said the sanctions, partly by encouraging foreign companies to abandon Russia, “are unraveling its economy, wiping out more than a decade of economic growth, and some of the most meaningful consequences have yet to be felt.’’
Ukraine President Volodymyr Zelenskyy said this week that sanctions have failed to deter Russia's military ambitions in his country. But sanctions have yet to reach the "top rung of the escalation ladder," the report says.
"Western allies could take additional steps in coming weeks and months to keep up pressure on the Russian government," the report says.
USA TODAY ON TELEGRAM: Join our Russia-Ukraine war channel to receive updates straight to your phone
►President Joe Biden plans to visit European allies Germany and Spain in late June as he tries to hold together the coalition opposing Russia’s invasion of Ukraine. The White House said Biden will attend a Group of Seven summit June 25 in the Bavarian Alps and a meeting of NATO countries June 28 in Madrid.
►Russia has restored fresh-water supply from southern Ukraine to Crimea through the North Crimean Canal, Defense Minister Sergei Shoigu said in a statement, a significant step toward Moscow's goal of connecting territory it controls to the peninsula it annexed in 2014.
►Almost 30% of Poles favor allowing Ukrainians fleeing the war to settle in Poland permanently and another 64% support providing protection until they can return home, according to a University of Warsaw survey.
►Slovakia’s government has approved a long-term plan to modernize and to increase the number of troops in its armed forces. The NATO member with a population of 5.5 million people should have 22,000 service members by 2035, up from 14,100 this year.
War curtails efforts to end extreme poverty as prices of food, energy soar
The U.N.'s goal of ending extreme poverty globally by 2030 is taking a major hit from the war in Ukraine, which has contributed to a steep rise in food and energy prices, according to a report the organization released Wednesday.
The report by the U.N. Global Crisis Response Group says the war “has exacerbated a global cost-of-living crisis unseen in at least a generation.” With much of the world still dealing with the impacts of the coronavirus pandemic and climate change, the war has made conditions nearly untenable for millions of people not directly involved in it.
“The war’s impact on food security, energy and finance is systemic, severe and speeding up,” U.N. Secretary-General Antonio Guterres said.
The U.N. is trying to arrange a deal that would allow grain exports from Ukraine through the Black Sea and unimpeded access to world markets for Russian food and fertilizers. Guterres said hundreds of millions of people in developing countries could face severe hunger without such an agreement.
European Commission chief Ursula von der Leyen on Wednesday accused Russian President Vladimir Putin of weaponizing food supplies by preventing Ukraine from exporting more than 22 million tons of grain. “This is a cold, callous and calculated siege by Putin on some of the most vulnerable countries and people in the world,” she said.
'Elite' Russian regiment routed, but Ukraine struggles in Donbas
The Ukraine military claims it routed an elite Russian regiment in the Donbas region amid conflicting reports on the fate of the crucial city of Sievierodonetsk. The "invaders" were trying to cut through a strategically important highway in eastern Ukraine when paratroopers from Ukraine's 80th Brigade halted the advance, the brigade said in a Facebook post.
"The enemy has not gotten through! Units of the 80th separate paratrooping brigade of the Armed Forces of Ukraine continue to inflict losses on Russian occupants," the post claimed. "This 'striped elite' retreated, leaving in the forest the bodies of their dead."
The Russians made their own claims of success, saying they have restored railways, roads and a canal to connect territory they control in southern Ukraine with the Crimean Peninsula, which they illegally annexed in 2014.
The focus of the war has turned to the eastern Donbas, which includes the Luhansk and Donetsk territories. Russia claims to control 97% of Luhansk. Sievierodonetsk is one of just two Luhansk cities not yet completely under Russian control. Luhansk Gov. Serhiy Haidai told the Associated Press that “maybe we will have to retreat, but right now battles are ongoing in the city.” Haidai suggested that positions across the river, in Lysychansk, could be easier to defend.
But in a social media post, Haidai wrote that "nobody is going to surrender Sievierodonetsk!"
In Mariupol, an 'endless caravan of death'
A search of the bombed-out high-rises in the port city of Mariupol has yielded between 50 and 100 bodies in each, prompting workers to carry them to morgues and landfills in what a mayoral aide called an “endless caravan of death.”
Petro Andryushchenko said on the Telegram app that about two-fifths of the damaged buildings in the heavily shelled city have been searched.
Ukrainian authorities estimate at least 21,000 civilians were killed and hundreds of buildings destroyed during a weekslong Russian siege of Mariupol. Reports have surfaced of mass graves holding thousands of bodies.
Mariupol fell to the Russians in May, but not before several weeks of dogged resistance from fighters holed up in a sprawling steel mill that came to symbolize the Ukrainian spirit of defiance against a larger foe.
British soldiers held by Russian separatists could face death penalty
The families of two British soldiers held captive and possibly facing execution at the hands of Russian separatists in Ukraine say the men are not mercenaries and should be treated as prisoners of war.
Aiden Aslin, 28, and Shaun Pinner, 24, had brief court appearances this week in the self-proclaimed Donetsk People's Republic. They could face the death penalty if convicted on charges of commission of crime by a group, violent seizure of power or retention of power by force, mercenarism and training for terrorist activity. Both families say they are working with the British and Ukraine governments in hopes of winning release.
Denis Pushilin, president of the Donetsk People's Republic, told Russian TV “the crimes they committed were monstrous."
"Aiden is a much-loved man and very much missed," his family statement said. "We hope that he will be released very soon."
Sides clash over efforts to begin shipping Ukraine grain
Turkish Foreign Minister Mevlut Cavusoglu said Wednesday that his nation was willing to provide security for a shipping corridor for Ukrainian agricultural products. An estimated 22 million tons of grains are sitting in silos in Ukraine, aggravating food shortages across much of the developing world.
Russia says commercial shipping could resume in the Black Sea if Ukraine removes mines from the area near the port of Odesa – and pledged not to use any cleared corridor to attack Ukraine. Kyiv has voiced doubt about that promise. Ukrainian Grain Union chief Serhiy Ivashchenko said Wednesday it was the Russians who mined the area and that it would take 3 to 4 months to remove sea mines.
“Turkey doesn’t have enough power in the Black Sea to guarantee security of cargo and Ukrainian ports,” he said.
Russia suspends fishing deal with Japan as their relations turn sour
Russia's relationship with Japan continues to deteriorate because of the war in Ukraine. A day after Japan agreed to increased military cooperation with NATO, Russia said it would suspend a deal that allowed Japanese boats to fish in waters near disputed islands in exchange for payment.
The fishing agreement in place since 1998 permits Japanese fishing around the Russian-held Kurils, which Japan also claims and calls the Northern Territories. Japan has joined the U.S., the European Union and others in imposing sanctions over the invasion of Ukraine, and the deal's suspension appears to be retribution for that and the closer military ties with NATO.
Chief Cabinet Secretary Hirokazu Matsuno said it was “regrettable that Russia one-sidedly announced it is suspending the cooperation in this manner.”
WNBA star Griner's freedom could be linked to another American
WNBA star Brittney Griner remains locked in a Russian prison, her case tangled up with that of lesser-known American Paul Whelan. He has been held in Russia since his December 2018 arrest on espionage charges he and the U.S. government say are false. Whelan was left out of a prisoner exchange in April that brought home yet another detainee, Marine veteran Trevor Reed. That has escalated pressure on the Biden administration to avoid another one-for-one swap that does not include Whelan in favor of Griner, an Olympic gold medalist whose case has drawn global attention.
“It's still very raw,” Whelan's sister, Elizabeth Whelan, said of her brother being excluded from the Reed deal. “And to think we might have to go through that again if Brittney is brought home first is just terrible.”
Contributing: The Associated Press
This article originally appeared on USA TODAY: Ukraine live updates: War will cost Russia 15 years of economic gains