THE WORLD REELS FROM IT

In general these figures may seem not so critical, but they appear quite challenging in terms of separate regions and particular countries. For instance, instead of expected modest growth of 1.6% in Eurozone in 2023, Organization for Economic Co-operation and Development (OECD) now corrects its forecast to just 0.3%, if natural-gas prices rise by 50% over the rest of the year. German economy, as a leading one in Europe, is supposed to be contracted to 0.7% from previously expected 1.7%.

In other words, the European Union, because of a surge in energy prices that egged on widespread inflation, is slowly but steadily going into recession. Something similar is going to happen with the USA. The OECD also reconsidered its forecast for this country’s growth in 2023 to 0.5% from 1.2%. In case inflation doesn’t fall as rapidly as the Federal Reserve supply. The main reason for that is the following. In recent years Ukraine and Russia combined accounted for 25% of the world’s wheat exports and 14% of corn shipments. Other agricultural production is also important for both countries, Ukraine in particular (see above). It’s also worth mentioning that before the war Ukraine alone was able to produce enough food to feed 400 million people per year. But when it had started Russia began the blockade of Ukrainian food exports by sea and, surprisingly for itself, losing its agricultural exports potential because of unprecedented Western sanctions. The outcome for the planet? Again shortages, rise of prices and food insecurity throughout the globe. This time developing countries in Africa, Asia and Latin America are expected to bear the brunt with tens of millions of their citizens to suffer from hunger.

This war has another important dimension –a demographic one. One can’t ignore the fact that in 2022 the planet witnessed the greatest migration crisis since World War II. More than one-third of Ukraine’s total population (42 million) is considered to be externally or internally displaced with approximately 8 million people to leave their homeland for neighboring and distant European countries. One may argue, saying migration is not about economy and I will definitely oppose. We just can’t close our eyes on the situation when labor markets of such countries as Poland and Germany have received 1,5 and 1 million potential workers respectively. Therefore, I’m afraid, in the medium and long run Ukrainians will shape not domestic but foreign economic development. Plain statistics: about 11% of those who escaped to Europe aren’t going to come back even when the war is over. Nearly the same number of people – 10% – still hesitate. The economic impact of such a human loss for Ukraine’s future is difficult to overestimate. To cut a long story short, I must admit that consequences of this war are not necessarily negative. In fact, there are or can be some advantages for all the parties involved. For instance, the European Union will finally terminate its critical dependence on Russian natural resources and much quicker turn to renewable energy. Besides, war lessons will force the EU to pay more attention to its security in the future. The United States will overcome lots of economic challenges by promoting production in defense sector. The Middle East will conquer new markets getting rid of the fading Russian competitor. And so on, and so forth! But my heart is obviously praying for Ukraine, my motherland. I really hope, it will survive, triumph over the terrorist state and join the free democratic world as a strong and reliable economic partner – a decent member of the EU and NATO. Surely, such dreams can come true only with the considerable assistance from the developed countries. Once the war is over, Ukraine will definitely need its own “Marshall Plan”. Today we are paying for it, global freedom and planet’s prospects in blood…

“The inner voices - 3rd movement,”

by Didier Mazuru Wikimedia Commons; CC BY-SA 4.0