Cyberthreats, corporate exodus are a part of the 10 disruptions caused by the Russia-Ukraine war

Jun 7, 2022

By: Bhakti Makwana

Trends in disruptions across the world

While 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.

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#1 A massive humanitarian crisis

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.

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#2 Soaring prices of essentials

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.

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#3 Much of the world’s breakfast ingredient come from Russia Ukraine

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.

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#4 Price of key commodities at multi-year high

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.

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#5 Global value chain depend on Russia & Ukraine for agricultural, material and chemical products

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.

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#6 About 80 percent of Western tech companies have exited Russia or are scaling back

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.

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#7 Effects on financial assets

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.

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#8 15 NATO countries and Sweden have said they will spend more on defense;

Analysis suggests that the increased spending in many countries would likely go to defense equipment and weapons programmes.

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#9 Rising cyberattacks

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.

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#10 Corporate actors are taking a stand

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.

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