Since 1991, there has been an in-built tension in Russian-Ukrainian relations, because ‘the more Ukraine asserted its sovereignty, the more Russia questioned it, and vice versa’. The war impact cannot be understood without ‘looking at its long-term sources’ because to do so would be to tackle them ‘out of context and therefore to misinterpret them’.
In this article, you’ll going to how the Russia-Ukraine war has reshaped and impacted globally:
1. Rise of Export Prices of Goods
Even though war broke out in Russia and Ukraine, it does not mean that the other countries that not involved will live peacefully without any impact. Indeed, we can say that we are safe because we do not participate in the war, but the global economy is quite affected. All the countries which has export goods to Russia, are experiencing problems.
The value of exports made by the other countries to Russia is declining. Because of this war, Russia was subject to a trade embargo. A number of merchant ships were prohibited from entering Russia. All the merchant ships became unable to dock to Russia. By failing to export, the countries will lose an estimated huge income from rubber, animal fat and cocoa.
2. Slow Economic Recovery
The spread of the Corona virus to many countries in the world has not only caused problems in terms of health but also the economy. The economies of many countries in the world have experienced a decline due to the Covid-19 pandemic. Luckily there is already a vaccine so the world economy is slowly getting better. But the war between Russia and Ukraine has worsened the economic recovery.
The war that took place between Russia and Ukraine made economic growth slow down. The slowing down of economic recovery is not only happening in the two countries involved in the war but also other countries are also affected. All the countries that have economic relations with Russia is also affected.
3. Food Production Disruption
When there is a war, no matter whether it is near or far, its effects will surely spread to other countries. Moreover, the war that occurred between Russia and Ukraine, this clearly affects many things, not only in terms of economy, business, but also food. Both Russia and Ukraine are producing countries in the food sector.
Wheat and corn are food ingredients produced by the two countries. Ukraine produces 10% of wheat and 16% of maize globally. On the Russian side, the country produces 30% of wheat. The increasing level of conflict between the two countries has hampered the production of wheat and corn.
4. Foreign Companies Start Withdrawing From Russia
War is something that many countries don’t like. When there was a war going on, the country that started the attack in the first place was bound to receive a large amount of condemnation. The war that took place between Russia and Ukraine was started by Russia. This led many countries to take action against Russia’s actions.
Since waging war will only bring about losses, an effective way to fight Russia is to attack from an economic point of view. Quickly a number of foreign companies that were in Russia began to leave. In addition to opposing the war, this foreign company does not want if later the profits obtained by Russia will be used for war needs.
5. Oil Prices Rise
It is not without reason that oil prices are now soaring. Russia, which decided to attack Ukraine, was one of the reasons why oil prices rose. The oil here is not only fuel oil but also cooking oil. Both Russia and Ukraine are countries that produce large quantities of oil and sell it abroad.
Russia is the third largest oil producer in the world. They produce as much as 13% oil. After Russia attacked Ukraine, many countries boycotted Russia by not buying oil from them. Meanwhile, Ukraine is a sunflower oil exporter. This war made it difficult for Ukraine to export.
6. Wheat Prices Rise
Wheat can be processed into a variety of foods such as bread, oatmeal, noodles, pasta, cereal, pizza, and so on. It was explained in the previous point that Russia and Ukraine produce most of the world’s wheat. Russia produces 30% of the world’s wheat while Ukraine produces 10%.
The war that broke out between the two countries made it difficult for both countries to sell their wheat products. Many countries in Europe boycotted Russia by not buying Russian products, while Ukraine was unable to sell its wheat because its focus was shifted to the war. As long as the war continues, the stock of wheat will likely decrease and the price will rise.
7. Changes in Currency Exchange Rates
The war that broke out between Russia and Ukraine also had an impact on currency exchange. A number of currencies have experienced an increase in value and some have decreased. Because Russia started the attack first, this obviously made the value of the Russian currency, the Ruble, decrease.
Some go down, some go up. If the Ruble, which is the Russian currency, has decreased, the US Dollar has increased. This is because many people prefer to switch to Dollars due to the massive boycott of Russia. They prefer to make transactions and investments that are safer, namely Dollars.
8. Stock Market Down
The adverse effects of the wars fought by Russia and Ukraine also had an impact on the stock market. Not only the stock market in the warring country, but the whole world. This is considering that now that technology is more advanced, many countries have economic relations with other countries, it is clear that this incident will affect the stock market.
This war causes short-term market volatility. Volatility in the stock market can affect the portfolios of financial investors. Investors will rethink whether they want to invest or not in this time of crisis. Even crypto currency has also been affected by the Russia-Ukrainian war.
9. Cyberattack
Talking about war, people might think that the war that is being carried out is an exchange of weapons. Which country has the most powerful military and weapons, then that country wins. Today, war does not only occur on the battlefield but in the internet world, war can also occur. The popular term is cyberattack.
By doing cyberattack, a country can paralyze many things from the enemy country such as administration, economy, and information dissemination. This is done by the two sides at war, Russia and Ukraine. Each country tries to paralyze its enemy through cyber attacks.
10. Natural Gas Crisis
The war that took place between Russia and Ukraine really had a huge impact on other countries. A number of sectors experienced a crisis because of this war, one of which was gas. Russia is a large country that is very rich in natural resources, gas. Russia is the second largest natural gas producer as well as a major exporter.
It should be noted that Russia supplies about 40% of gas needs in Europe. Russia’s war was strongly opposed by many countries in Europe. Because they do not want to join the war, one way to attack Russia is from an economic perspective. Many countries that originally bought gas from Russia have decided not to buy it anymore. They prefer to buy gas from other countries.
