Jun 7, 2022
By: Bhakti MakwanaWhile Russia’s war on Ukraine has disrupted lives and livelihoods across the world. It also threw the world into a myriad of crises as it is hopping towards an economic recovery. Let’s look at the ten disruptions caused by the war – which will be etched in history, according to a McKinsey report.
Credit: BCCL
The war has displaced the most refugees in Europe since World War II. Till now, 5.6 million refugees have fled Ukraine, and another 7.7 million have left home and sought shelter elsewhere within the country. It can get worse as the UN estimates 8.3 million Ukrainians to become refugees by the end of the year.
Credit: BCCL
From food, gas, fuel, house to electricity everything has become expensive not just in Ukraine but across the world. Price increases of this magnitude have the potential to push millions of people in low and middle-income countries like India into poverty.
Credit: BCCL
The war in Ukraine has disrupted the global food production system. Ukraine and Russia are the breadbaskets of the world, supplying about 30 percent of global exports of wheat and barley, 65 percent of sunflower seed oil, and 15 percent of corn. After the invasion, prices of these commodities rose sharply.
Credit: BCCL
Russia Ukraine war caused a spike in the prices of dozens of commodities that they export – coal, steel, nickel. The two countries’ combined share in these commodities range roughly between 10 to 50 percent.
Credit: BCCL
Russian exports represent about 2 percent of the $19 trillion in annual global trade. But it has high proportion in key commodities like —base metals, oil, gas, fats and oils, cereals and wood products among others.
Credit: BCCL
Most telecom, media, and tech companies from the US and the European Union are leaving Russia or scaling back. Ultimately, a splintered set of tech standards and policies means more expensive services for consumers.
Credit: BCCL
European banks may be among the most exposed, with about $75 billion of assets at risk in Russia, equivalent to about 6 to 7 percent of their pre-invasion market cap. Amongst others, a recession triggered by inflation, may be the greatest.
Credit: BCCL
Analysis suggests that the increased spending in many countries would likely go to defense equipment and weapons programmes.
Credit: BCCL
On the day of the invasion—ViaSat’s internet service was disrupted across Europe for several hours, affecting 30,000 customers—including Ukrainian military communications. Depending on the trajectory of the war, one could expect cyberthreats to continue.
Credit: BCCL
Of the 281 Fortune 500 companies that were present in Russia before the war, close to 70 percent have either scaled back or exited their Russian operations since the start of the war. The exodus is not confined to any one sector.
Credit: Canva