Publisher | Ukraine War: 100 days of perfect storm

Due to the importance of the countries involved in the war in Ukraine, and due to the moment in which the war began, after the crisis caused by the pandemic, it could well be said that we are facing a perfect storm of unforeseeable consequences about the world economy. The impact is visible in almost all countries, with a inflation which is close to double digits and hampers the economic recovery in the European Union, and with especially serious supply problems with regard to cereals and fertilizers on which millions of people in the world depend. The OECD has put numbers to the crisis that will result from the war, if the circumstances do not change: a cut in world GDP of 1.08% that can reach 1.4% in Europe and 0.9% in the United States. These are important figures, but they do not reveal the magnitude of the challenge that the war poses for those countries where a significant part of their population depends on Ukrainian cereals and Russian fertilizers.

Russia and Ukraine are modest countries since, together, they barely account for 2% of world GDP. Nevertheless, they export a third of the wheat consumed worldwide and Russia, in addition to supplying gas and oil to the European Union, is a decisive country for the production of fertilizers. This means that, if the war becomes entrenched and the cereals accumulated in the silos of Odessa cannot be exported and the Ukrainian peasants do not have fuel to sow, we all have a major problem. And those who depend on Ukrainian wheat, barley or corn, or potash from Russia or Belarus, face a survival challenge.

The direct consequences of war would not be so uncertain were it not for the fact that it is difficult to draw peace scenarios. The longer Russia’s destructive bombing continues, and the more territory Moscow controls in the strip that joins Crimea to the two secessionist republics, the more difficult it is to imagine an agreement that can satisfy the parties involved and offer them guarantees. The degree of commitment that NATO’s military aid to Ukraine has reached, as well as the resolution of the Ukrainian Army, do not allow us to imagine a peace that supposes significant concessions to Putin’s territorial ambitions. Consequently, everything suggests that we are facing a longer conflict than expected. How to fit, then, consequences such as those mentioned, without these involving famines of unknown dimensions? Only with a certain ability to isolate from the war those issues that are essential to avoid catastrophe. As the authorization of an export corridor for Ukrainian cereals across the Black Sea, with the involvement of the United Nations and, probably, Turkey. This corridor constitutes one of the interesting ideas that have been put on the negotiating table.

As long as the war lasts, no agreement will be easy, because Russia will demand a certain relaxation of sanctions in exchange, but what seems impossible today may be feasible when countries like Egypt, Lebanon, Yemen, Sudan or Afghanistan cannot produce their cakes. War affects everyone. Also to the Europeans, where its effects on energy and prices are added to others, derived from the pandemic and dependence on China. But the EU has rightly decided to get involved in the conflict, and it must bear its consequences. It must do so knowing that the war has a price and the one waged by the Ukrainians to defend the sovereignty of their country is a just war that deserves to be supported. What would be unfair is that those who paid this bill with hunger and extreme poverty were countries whose only link to the conflict is that they buy bread from the two countries involved.

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