• Global financial services community can help stop Russia’s war in Ukraine.
• Immediate ban on oil and gas may stop Russia.
• Protracted war will have global ramifications.

The global financial services community can and must contribute to helping stop Russia’s war in Ukraine said Kateryna Zelenko, ambassador of Ukraine to Singapore.

Global financial services community can help stop Russia’s war in Ukraine

In an exclusive interview with Emmanuel Daniel, founder of The Asian Banker and its international resource director, Mathew Welch, to discuss the implications of the war on the financial services industry, ambassador Zelenko remarked, “Every community, including financial services, can contribute to finding a peaceful solution and to stopping this senseless war.”

While she expressed her government’s appreciation to the international community for the sanctions targeting Russia's financial, energy and transport sectors, the ambassador asserted that more active measures must be taken to stop the funding of Russia’s military capabilities and prevent further casualties.

“These sanctions are not sufficient to stop further bloodshed. That is why active measures have to be taken in order to achieve more progress. We see that only seven out of the top 50 Russian banks have been disengaged from SWIFT. We see that a large number of international companies keep working in Russia, paying taxes, it means that they keep funding this terrible military machine,” said the ambassador.

Immediate ban on oil and gas may stop Russia

She also cited the continuing import of Russian oil and gas as an important enabler of its military actions in Ukraine. “A big issue here is oil and natural gas exports, which make up about 45% of revenues of the Russian federal budget. We believe that imposing an immediate ban on Russian oil and other energy imports may stop Russia”.

The ambassador is hopeful that more countries will be willing to contribute to the peaceful solution and to stopping Russia's aggression by banning energy imports from the aggressor country. She added that the business community too needs a predictable and secure environment to move forward and for the planet to be a safer. To this end, countries and their people must be willing to suffer “short-term pain for the long-term gain”.

Recounting the costs of the war so far that has seen the loss of thousands of Ukrainian lives, including hundreds of children, she said that the “financial pain is nothing compared to the pain and losses we are suffering”.

Protracted war will have global ramifications

She warned that a protracted war will have ramifications for the entire world, especially with Russia’s threat to provoke spikes in global food and energy prices, and is one that no country can sit out.

“It is now clear to everyone that no one will be able to sit out this terrible war. We already see implications for many countries across the globe, as we need to keep in mind that Ukraine is one of the major exporters of essential food products globally. It is crucial for every country, not only in Europe, but also in Asia, Africa, and the Middle East, to think about those hundreds of millions of people across the globe who are now at risk of unstable access to food, malnutrition, and even famine”.

Here is the edited transcript:

Emmanuel Daniel (ED): Thank you very much ambassador Zelenko for joining us this morning. What is your most important key message to the financial services industry?

Ambassador Kateryna Zelenko (AKZ): The most important message is that we are now dealing with the full-fledged war in the very heart of Europe, and every community, including financial services can contribute to finding a peaceful solution and to stopping this senseless war. We are not only speaking about the huge plight of the people on the ground in Ukraine, of many deaths and destructions, but we're also speaking about the future of the business community which needs a predictable and secure environment to strike deals, to move forward, and to make this planet a safer place to be.

ED: Of all the sanctions that have been done so far and all of the measures being taken in the financial industry. Do you think that it's enough? There are two sides to the response of the finance industry, one is to stop the aggressor and the other is to help the defence of Ukraine. So, what do you think is missing? What do you think needs to be done?

AKZ: To begin with, we are grateful to the international community for the sanctions hitting Russia's financial, energy and transport sectors. And, of course, we can see that more than 400 companies have already left Russian market. However, as we can see, these sanctions imposed are not sufficient enough to stop further bloodshed. That is why active measures have to be taken in order to achieve more progress on that. We see that only seven out of the top 50 Russian banks have been disengaged from SWIFT. We see that a large number of international companies keep working in Russia, paying taxes, it means that they keep funding this terrible military machine. And if we look at the structure of the Russian budget, we can see that every third rouble paid in taxes to Russia turn into funding the country's military budget, it means new deaths, new destructions in Ukraine. And of course, a big issue here is oil and natural gas exports, which make up about 45% of the revenues of the Russian federal budget. We believe that imposing an immediate ban on Russian oil and other energy imports may stop Russia, we see that there are many meetings and summits going on in Europe these days. And we're hopeful that more and more countries will be willing to contribute to the peaceful solution and to stopping Russia's aggression by banning energy imports from the aggressor country.

Mathew Welch (MW): Do you feel that it is a reasonable expectation that the EU might actually join a ban on buying oil and gas from Russia?

AKZ: If you look at the numbers, almost half of revenues come from gas and oil business. It will definitely impact Russia's activities towards strengthening its military capabilities. That is why, we of course see that, it's going to be a very painful decision. But I think every country thinking about the future, thinking about a more secure environment for its businesses and people will be willing, it will be ready to suffer the short-term pain for the long-term gain.

AKZ: But I think this financial pain is nothing compared to the pain and losses we are suffering now, losing children. More than 150 children have already been killed in this war, and 1000s of civilians have been killed, we have severe destruction of the critical and social infrastructure. So, these losses are irreparable, everyone needs to keep in mind.

ED: Do you see from your position, you are in Singapore, any leakages, any attempts by the financial industry, or the supply chain industries to get around sanctions?

AKZ: I think that the situation with many businesses across the globe has become quite unpredictable, because we do not know how long this crisis should endure. And of course, it is now clear to everyone that no one will be able to sit out this terrible war. We already see implications for many countries across the globe, as we need to keep in mind that Ukraine is one of the major exporters of essential food products globally. Think about these factors, we can, of course, come to a conclusion that it is crucial for every country, not only in Europe, but also in Asia, in the African countries, in the Middle East, to think about those hundreds of millions of people across the globe are now at risk of unstable access to food, malnutrition, and even famine. Russia threatened to provoke immense spike in prices, food prices, energy prices, which will be of course painful for the citizens. And that is why we cannot allow, to tolerate this war. And that's why it is so important for our partners to understand that we need to take joint measures in order to prevent this crisis. Besides, our country is also a big supplier of different raw materials, chemical products and machinery, it will mean impact for many industries across the globe. We of course see support by some countries also here in Asia, I think Singapore leads by example.

Because there is a clear understanding in Singapore that in the world where “might is right”, no nation can feel safe, and no business can feel safe. It means that we need more support from also other countries not only in terms of humanitarian aid, which is also which has been provided by the government of Singapore and by the people in Singapore who donate to the Red Cross. But it is also a matter of restrictive measures, which can show that if the country moves the goalposts, it will be punished because we all need to take care and protect the rule-based order in the international law. Every tenth loaf of bread is made of Ukrainian wheat.

The world has not yet recovered from the COVID pandemic. And now we have a more massive challenge, which again, threatens to disrupt the supply chains, which will be of course, felt on every corner of the globe.

ED: What's the position of the Ukrainian government on the support being given by other governments in the emerging markets? ASEAN as a whole, China, Japan, India and the Middle East?

AKZ: Yes, we are grateful to our partners in the countries of Asia Pacific who already imposed sanctions against Russia. So, along with Singapore are Japan, South Korea, Australia and New Zealand. We also got support in terms of humanitarian aid and financial support from many of these countries, military support as well, which is crucial to Ukraine to strengthen its military capacities as we are dealing with a powerful enemy. Of course, we need, there is much more which can be done. We have seen that there have been also two statements made by the foreign ministers of the ASEAN countries. And most of the ASEAN countries have also voted in favour of the UN General Assembly resolutions about Russian aggression against Ukraine, with this new wave of full-scale invasion, and the second resolution was passed yesterday on the humanitarian situation in Ukraine. So, there are many ways to support Ukraine. The main thing is that there is of course, the goodwill, people to contribute to finding a peaceful solution, because we see that if we do not reach the sustainable ceasefire, and if you do not achieve the withdrawal of troops, we cannot speak about sustainable peace, which means that the situation will endure for longer.

ED: Thank you very much ambassador for your comments.