The destruction of Ukraine’s infrastructure by the invasion affects production, storage and transportation. In addition, the sanctions on Russian exports of grains and fertilizers do the same. For the Russian economy this year it is estimated that there will be a contraction of 15% of its GDP.
The Group of 20 with its finance ministers and central bankers will meet with the International Monetary Fund (IMF) and the World Bank from April 18-24. It is desirable that they not only speak out against the disasters caused by the Russian invasion of Ukraine, but also resolve the negative effects that the war economy is producing. This is associated with the global escalation of inflation and the increasingly worse climate change.
Three months ago the IMF made its forecasts for this year. But the war events, the sanctions against Russia and the energy supply problem are changing the outlook for the worse.
For now, trends are already turning around in Germany and it is important because it is the largest economy in Europe. A contraction of the Gross Domestic Product of 5 percent is estimated for this year. The basis of the calculation is the dependence on Russian hydrocarbons, which can only be overcome in the long term, in about 10 years with a productive reconversion. According to the President of BASF, Martin Brudermuller “a stoppage of supply would mean the biggest crisis since the Second World War”. Meanwhile, the United States will cover part of Germany’s demand by sending it 50 billion cubic meters of liquefied gas annually.
As if that were not enough, there are also the increases in food prices. According to the Food and Agriculture Organization of the United Nations (FAO), food and fodder prices will rise by 22% this year. Ukraine and Russia are major exporters of wheat, corn, and sunflowers in the form of seeds and oil. The destruction of Ukraine’s infrastructure by the invasion affects production, storage and transportation. In addition, the sanctions on Russian exports of grains and fertilizers do the same. For the Russian economy this year it is estimated that there will be a contraction of 15% of its GDP.
The war raised energy prices and has deferred investments in alternative sources to fossil fuels. Those are the relevant ones to stop the destruction of nature by climate change.
In the United States, given the very low level of popularity of President Biden, who came to the White House promoting the use of green energy, the oil industry has refused to increase production, generating higher prices and profits for companies. Consequently, the issues associated with the pockets of the population are affected.
But in addition to the negative effects of the Russian invasion, there is the scene of cruelty with the death of 400 civilians executed in the city of Bucha, among other calamities. The US Ambassador to the United Nations (UN) called for Russia to be expelled from the Human Rights Council. She had the backing of 93 countries.
The G-20 faces the task of acting to prevent further massacres due to the destabilization of the world economy with more inflation, higher oil prices, an emigration of refugees from Ukraine exceeding 4 million people and the discredit international institutions such as the UN.
The President of Ukraine, Volomir Zelensky, has said: “If the Security Council fails to hold Russia accountable, it will show that it is a useless body.” Is right. The impotence of the international organization calls into question the usefulness of the resources that have been assigned to it for its operation.
Economy and Society
Writer and graduate in economics, graduated from the National Autonomous University of Mexico. From 1984 to 1990 he was Mexico’s ambassador to the Kingdom of Denmark, where he was awarded the Dannebrog order.