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  • Igor Burakovsky about how the russian war against Ukraine affected the world economy


    Russian aggression against Ukraine has influenced deeply the European and world economy. That is why helping Ukraine and ensuring its post-war recovery are in the interest of world communities.

    It was said by head of the IER Ihor Burakovsky within the framework of the project “Ukraine in Flames”.

    According to the expert, russian aggression impacts world economics in a straightforward way. The war effects are multiple: slowing down post-Covid economic recovery, speeding up inflation pressure, food and energy prices growth, tumor in financial and commodities markets and ecological crisis. 

    More specifically, one of the most significant problems is the reduction of food supply and growth of food prices. In recent years, nearly half of Ukrainian wheat exports have gone to the northern Africa and the Middle East. Many governments in the region have traditionally subsidized for purchases for millions of their citizens. Today there is a real danger that due to the war, world wheat supply to the region will be interrupted. There are several reasons for it. First of all, Ukraine is unable to export grain as russia blocks Ukrainian seaports and sea routes. Secondly, the war endangers Ukraine’s ability to plant crops for the next year. In practical terms, it means that food prices will grow up. This growth will translate in rather sharp rise of the cost of these subsidies for governments. 

    Another problem is Ukrainian migrants. Since the conflict began, millions of Ukrainians fled Ukraine to neighbor countries. This is the largest mass migration in Europe since World War II. Accommodating large number of newcomers is a tough challenge for the host governments. Moreover that distracts attention of international institutions, national governments and civil society activists from traditional problems and social-economic developments to military and military related needs.

    In addition, the war in Ukraine has profound negative impact for current and future climate policy. Why? The war distracts attention of international community from environmental problems and diverse resources necessary for green transition. The war-related expenditures and losses could widen huge gap in financing needed to achieve sustainable development goals. Physical, biological and chemical dangers remain confined to Ukraine. Such issues as ending poverty and climate change are endangered. External financial recourses for further developments are decreasing and this process is especially detrimental to low-income and middle-income countries. 

    The conclusion of war consequences is straightforward. Ukrainian economic resilience is the key prerequisite of European and world economic resilience. That is why helping Ukraine against russian invasion and taking part in Ukraine’s post-war economic recovery are in the interest of the world community. 

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