Asian countries the most and the least affected by the Russia-Ukraine war

Impacts of the war in Ukraine can be felt not only in the region but also around the world. Many Asian countries are dependent on Russia for weapons, tourism, as well as energy and agricultural commodity imports. Hence, even though Asian countries are not directly involved in the conflict, they can feel negative impacts of it.  

Food prices have been increasing due to the war as both Ukraine and Russia are important commodity producers. Many Asian countries have been using Russian fertiliser and are now facing shortages, which can be detrimental to their crops.   

Asian states are also dependent on Russia and Ukraine when it comes to energy imports. Even if they do not get their gas from Ukraine or Russia they usually have agreements with other EU countries. And, because of the war, the organisation has been facing an energy crisis and serious gas shortages.    

Asian countries’ stand on the war 

Asian countries have been divided in response to the war. Some, for example, Indonesia have expressed neutrality, and others have not taken a stand on the conflict at all.  

There have also been states like Singapore that ‘have joined European countries, the United States, Japan, and other leading democracies in imposing sanctions, and have sharply criticized the Russian invasion of Ukraine,’ Council on Foreign Relations reported.  

Finally, certain countries such as Myanmar seem to be supporting Russia. In fact, Myanmar was the only state that voted against the UN resolution condemning Russia.  

‘But Vietnam abstained, as did tiny Laos, a country in which Vietnam wields significant influence. (Vietnam has expressed concern about the conflict and issued the standard calls for an end to the conflict.) Indeed, of all the countries in Southeast Asia except Myanmar (which is fully on Russia’s side), Vietnam has to negotiate the trickiest situation regarding the Ukraine war. On the one hand, it has become one of the closest U.S. strategic partners in Asia, works closely with the United States on many strategic issues, and seems to be drawing closer to Washington as China becomes more aggressive in the South China Sea,’ Council on Foreign Relations added.  

With Asian countries having many links to Russia they have been trying to think not only about the impacts the war has had on Ukraine but also about what will be the economic consequences of them taking a stand against Russia.   

Countries that might benefit from higher commodity prices 

While for most countries around the world, the war in Ukraine has had negative consequences. There are some economies that might benefit from higher commodity prices.  

According to CNBC, the following countries will find higher commodity prices beneficial: 

Coal exporters: Australia, Indonesia, Mongolia 

Crude oil exporters: Malaysia, Brunei 

Liquefied natural gas: Australia, Malaysia, Papua New Guinea 

Nickel suppliers: Indonesia, New Caledonia 

Wheat suppliers: Australia, India.  

That is because if they export a lot of these commodities, for them, higher prices mean bigger profits.   

Countries that will be negatively affected by higher commodity prices  

CNBC also published data explaining which Asian countries are the most vulnerable to rising prices of certain commodities. These are: 

Fertilizer: Indonesia (more than 15%), Vietnam (more than 10%), Thailand (more than 10%), Malaysia (about 10%), India (more than 6%), Bangladesh (nearly 5%), Myanmar (about 3%), Sri Lanka (about 2%) 

Cereals from Russia: Pakistan (about 40%), Sri Lanka (more than 30%), Bangladesh (more than 20%), Vietnam (nearly 10%), Thailand (about 5%), Philippines (about 5%), Indonesia (less than 5%), Myanmar (less than 5%), Malaysia (less than 5%) 

Cereals from Ukraine: Pakistan (nearly 40%), Indonesia (more than 20%), Bangladesh (nearly 20%), Thailand (more than 10%), Myanmar (more than 10%), Sri Lanka (nearly 10%), Vietnam (less than 5%), Philippines (about 5%), Malaysia (about 5%).  

They rely on imports from Russia or Ukraine for these products so higher prices mean they have to increase spendings to receive the same amount of these commodities and meet the demand for them.  

Limited arms exports 

Russia is Southeast Asia’s main arms supplier. It sold ‘around $10.7 billion (€9.75 billion) worth of defense equipment to the region between 2000 and 2019, according to the Stockholm International Peace Research Institute (SIPRI).’ Most of these weapons were sold to Vietnam as almost 80 per cent of Vietnam’s arms come from Russia. After Vietnam, countries that import the largest numbers of weapons from Russia are Myanmar, Laos, and Thailand.  

The table below provides an overview of top arms exporters to Southeast Asia: 

The data is for the years 2000-2019.  

The war in Ukraine poses a risk of disruption to arms exports from Russia. Moreover, as Russia has committed serious atrocities in Ukraine, many Asian countries are thinking of ceasing importing weapons from the country.  

So far, they have not done so because diversifying away from Russian arms and finding other suppliers is challenging. Russian weapons are affordable and, over the years, many of Asian states that import them have formed close partnerships with Russia and are worried about ruining the progress. Especially now having seen what Russia is capable of, they do not want to have Putin as an enemy. 

Risk of energy crises in the region 

Because of the war global energy prices have been on the rise and still keep increasing. ‘For Asian economies dependent on imported fossil fuels, volatile prices since 2020 have caused fuel shortages, exorbitant government subsidy burdens, inflation, food scarcity, and political instability. The Russian invasion of Ukraine is likely to exacerbate commodity price volatility, which undermines Asian countries’ economic growth and obstructs the region’s arduous recovery from the Covid-19 pandemic,’ Eco-Business reported.  

The prices are likely to remain high even after the war finishes so people in Asian countries have to get used to more expensive gas and power tariffs. These changes have triggered unrest amongst the people in the region, however, and made them go out to the streets to protest.  

What this situation is showing is the fact that Southeast Asia needs more versatility when it comes to energy sources. Most countries in the region rely almost entirely on fossil fuels. Instead, they should transition to renewables, which are not as vulnerable to changes of global energy prices.  

As Eco-Business further explains, ‘‘unlike the constantly fluctuating cost of fossil fuels, renewables have demonstrated consistently lower costs over time. It is difficult to predict fossil fuel prices months in advance, but renewables provide long-term economic and financial stability. Instead of increasing exposure to geopolitically unstable fossil fuel markets, it would be wise for Asian countries to maximize energy security and self-sufficiency by minimizing dependence on imported fossil fuels.’