Eastern Headwinds. The far-reaching consequences of war in Ukraine

Wealth Management and Private Banking

17 November 2022

ChinaInvestmentsleadershipMeeting of MindsRussiaUkraineWealth Management and Private Banking

Expert: Tim Ash Facilitator: Richard Clarke


  1. Russia will lose the Ukraine war. The Russian army is fourth generation quality vs NATO second and first-generation military hardware.
  2. Putin is a bully and has misjudged the strength of NATO support for Ukraine and the resilience and fighting spirit of the Ukrainian people. As with many bullies, if you show him strength he will back off.
  3. China has not voiced total support for Russia which is interesting and has used this timing to build some bridges with Joe Biden and the US.
  4. The strength of the US and NATO support for Ukraine has made China more cautious about attacking Taiwan in case the US retaliates. 


International (and by far the largest here is the US) military weapons support for Ukraine is very effective at weakening Russia which has already lost 50% of its conventional arms firepower since the war started in February 2022.

The Russians like strong leaders – that is their history, and they did not appreciate that the Ukrainians are not like that, struggle to follow central leadership demands and operate with widespread corruption. President Zelensky found this hard as a civilian president but has turned out to be a brilliant war leader through staying in the heat of the action and being a great positive communicator.

Putin is a genocidal war criminal who rules by fear and is increasingly isolationist physically, which makes it extremely hard for someone to ‘take him out.’

If Russia lost the war, Putin would still spin this in the media and survive as leader if he wants to. There is no obvious successor to him. His state of health is questionable but hard to determine although some recent images suggest he does not look well.

It is impossible to know the strength of public opinion in Russia due to Putin’s total control of the media and stamping on any political voices against him.

The intellectuals in Moscow and St Petersburg will start to worry about the mounting number of Russian fatalities from the war – already believed to be 100,000. However, the masses of the Russian population live in rural communities, are less educated and more au fait with what is going on, which, given the history and culture of the Russian people, means there is no culture of, or demand for, independent opinion polls.

After the war, Putin is likely to be replaced by a leader whose primary focus will be on keeping Russia together rather than leaning towards Western-style democracy or sharing a Putin-style imperialist expansion agenda. The need for Russia to stay together is reinforced by the memory of the breakup of the Soviet Union in 1991 which was not foreseen and within Russia was seen by Russians (and especially Putin) as a humiliation due to the weakness of liberally-minded Gorbachev as the last Soviet leader.

Russia interfered with the US Presidential election – this policy of disrupting the Western democratic political; status quo is not one that China engages in.

Although Putin threatens to use tactical nuclear weapons, it is unclear that China and India would support that, and he would not risk NATO retaliation.

Ukraine could become a democratic bulwark for NATO against its Russian neighbour. Maybe over time (with US and EU support) become an economically Eastern European equivalent of South Korea.

Key takeaways:

  • From an investment perspective Ukraine has an incredibly positive outlook as it seeks to rebuild at an estimated cost of c. $700-1000bn of which c.$400m can be funded by unfreezing Russian sanctioned assets
  • The Ukrainian economy is coming from a low base but investment in rail, roads, wider infrastructure IT, defence, and agriculture could turn it into an extremely high recovery economy.
  • Fill your boots go long on Ukraine equities and fixed income