Economic effects of the Russo-Ukrainian War
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TruckDriver9
Hummingbird
Russia winning:
www.americanthinker.com
By Patricia Adams and Lawrence Solomon
The West’s sweeping sanctions on Russia following its invasion of Ukraine are shaping up to be the West’s most monumental miscalculation in modern history. The sanctions have not brought the Russian economy to its knees, as was widely predicted. Instead, it’s the Western economies that are reeling, their economic growth all but stopped. Many of them are simultaneously suffering from both high inflation and energy shortages.
Russia, meanwhile, is not only surviving but thriving, acquiring more potency and prestige throughout Asia, Africa and South America than at any time since the collapse of the Soviet Union.
According to the IMF, the Russian economy will grow faster than Germany’s or the UK’s this year. Next year, it will also grow faster than those of the U.S., Japan, Italy, and much of the rest of the West, its growth in GDP per capita will exceed that of the advanced economies as a whole, and it will achieve the lowest debt-to-GDP ratio among the G20 nations. Russia’s unemployment rate of 3.5% is the lowest since the Soviet Union fell. Russia’s economic performance -- S&P Global recently confirmed its bullish private sector business confidence -- is all the more remarkable since Russia is simultaneously fighting an expensive proxy war against the combined weight of the armories of the West.
As NATO Secretary General Jens Stoltenberg told reporters at the U.S. State Department in February, the West to date has provided unprecedented support to Ukraine, with around $120 billion in military, humanitarian and financial assistance. The transfer of military materiel has been so extensive that many of the NATO countries’ arsenals have been depleted: Germany is down to two days of ammunition and is now unable to defend itself, according to the country’s defence minister; the UK’s stockpiles of ammunition would last but a few days in battle; France is facing “a major shortage of munitions,” and the US military now doubts its ability to both continue to supply Ukraine and maintain its own readiness. “The current rate of Ukraine’s ammunition expenditure is many times higher than our current production rate,” states Stoltenberg.
Yet Russia has been able to ramp up its own military production rate so effectively that its artillery can massively out-pound Ukraine’s, firing between 40,000 and 50,000 shells per day versus Ukraine’s 5,000-6,000. While Russia’s arms production is on a high-output war footing, the West’s has been unable to keep pace. America’s focus on supplying Ukraine has compromised its ability to meet other goals, such as deterring China’s expansion and maintaining readiness to respond elsewhere.
Russia’s military robustness is all the more noteworthy given that it has the world’s largest nuclear arsenal and a now-close alliance with China’s military. The ascendancy of what is dubbed the “Russia-China axis” and the widespread perception of the West’s decline has in turn convinced other militaries to associate with a winner. In September, India, Laos, Mongolia, Nicaragua and various former Soviet states joined Russia and China in war games in the Sea of Japan and Russia’s Far East, and in February, South Africa hosted Russia and China for 10 days of joint naval drills.
Russia’s diplomatic standing is also ascendant. While the U.S. succeeded in lobbying Western countries to sanction Russia, sometimes through coercion, its heavy-handedness had the opposite effect elsewhere. In Asia, both China and India have dramatically deepened their ties to Russia. In South America, Russia is embraced by the new socialist government of its largest economy, Brazil, as it was by Brazil’s former conservative government. In the Middle East, where the U.S. is widely distrusted, Russia has good relations with Israel as well as with all the major Muslim nations, whether Sunni or Shia, Arab or Turkish. In Africa, where Russia is viewed as the only major European country to eschew colonialism, Russia is widely feted, unlike former colonial powers such as France, whose troops have recently been evicted from Mali and Burkina Faso, and where French President Macron confirmed that “the age of Françafrique is over.”
While Russia may be shunned by the West, it is welcomed by most of the rest, as seen in the regional alliances in which Russia plays a leading role: the Russia-China-led Shanghai Cooperation Council, which includes former Soviet countries as well as India and Pakistan, and the BRICS countries (Brazil, Russia, India, China and South Africa), whose GDP now exceeds that of the G7. Some two dozen countries have expressed interest in joining Russia in these economic and security alliances, including major regional powers such as Saudi Arabia, Turkey, Iran, Egypt, Indonesia, and Mexico.
Russia’s rise will be news to Western audiences, which for decades have been prey to a demonization of Russia, and since its invasion of Ukraine have been fed a steady diet of Russia’s decline. “Business Retreats and Sanctions are Crippling Russian Economy,” a Yale School of Management study published last summer, may have been correct in claiming that "Russia has lost companies representing ~40% of its GDP, reversing nearly all of three decades worth of foreign investment," but it failed to anticipate that Russia would quickly recover in a more self-reliant form.
The West’s sanctions, the most severe ever imposed on a country, were meant to teach Russia the lesson that “aggression does not pay,” in the words of NATO’s Stoltenberg. The ferocity of the sanctions, the subsequent cancellation of Russian artists and athletes in the West, and expectation of an end of the Russian Federation by political and military elites such as Former Commanding General of the US Army in Europe, General Ben Hodges, shocked Russia out of its complacency, and led it to learn very different lessons: That the West was determined to destroy it, and that its existence required it to arm itself to the teeth and end its economic interdependence with the West.
The sanctions on Russia awoke the sleeping giant that had been Russia, and the West may soon be faced with the consequences.
Russia’s Rise
The West’s sweeping sanctions on Russia following its invasion of Ukraine are shaping up to be the West’s most monumental miscalculation in modern history. The sanctions have not brought the Russian economy to its knees, as was wide...
Russia’s Rise
By Patricia Adams and Lawrence Solomon
The West’s sweeping sanctions on Russia following its invasion of Ukraine are shaping up to be the West’s most monumental miscalculation in modern history. The sanctions have not brought the Russian economy to its knees, as was widely predicted. Instead, it’s the Western economies that are reeling, their economic growth all but stopped. Many of them are simultaneously suffering from both high inflation and energy shortages.
Russia, meanwhile, is not only surviving but thriving, acquiring more potency and prestige throughout Asia, Africa and South America than at any time since the collapse of the Soviet Union.
According to the IMF, the Russian economy will grow faster than Germany’s or the UK’s this year. Next year, it will also grow faster than those of the U.S., Japan, Italy, and much of the rest of the West, its growth in GDP per capita will exceed that of the advanced economies as a whole, and it will achieve the lowest debt-to-GDP ratio among the G20 nations. Russia’s unemployment rate of 3.5% is the lowest since the Soviet Union fell. Russia’s economic performance -- S&P Global recently confirmed its bullish private sector business confidence -- is all the more remarkable since Russia is simultaneously fighting an expensive proxy war against the combined weight of the armories of the West.
As NATO Secretary General Jens Stoltenberg told reporters at the U.S. State Department in February, the West to date has provided unprecedented support to Ukraine, with around $120 billion in military, humanitarian and financial assistance. The transfer of military materiel has been so extensive that many of the NATO countries’ arsenals have been depleted: Germany is down to two days of ammunition and is now unable to defend itself, according to the country’s defence minister; the UK’s stockpiles of ammunition would last but a few days in battle; France is facing “a major shortage of munitions,” and the US military now doubts its ability to both continue to supply Ukraine and maintain its own readiness. “The current rate of Ukraine’s ammunition expenditure is many times higher than our current production rate,” states Stoltenberg.
Yet Russia has been able to ramp up its own military production rate so effectively that its artillery can massively out-pound Ukraine’s, firing between 40,000 and 50,000 shells per day versus Ukraine’s 5,000-6,000. While Russia’s arms production is on a high-output war footing, the West’s has been unable to keep pace. America’s focus on supplying Ukraine has compromised its ability to meet other goals, such as deterring China’s expansion and maintaining readiness to respond elsewhere.
Russia’s military robustness is all the more noteworthy given that it has the world’s largest nuclear arsenal and a now-close alliance with China’s military. The ascendancy of what is dubbed the “Russia-China axis” and the widespread perception of the West’s decline has in turn convinced other militaries to associate with a winner. In September, India, Laos, Mongolia, Nicaragua and various former Soviet states joined Russia and China in war games in the Sea of Japan and Russia’s Far East, and in February, South Africa hosted Russia and China for 10 days of joint naval drills.
Russia’s diplomatic standing is also ascendant. While the U.S. succeeded in lobbying Western countries to sanction Russia, sometimes through coercion, its heavy-handedness had the opposite effect elsewhere. In Asia, both China and India have dramatically deepened their ties to Russia. In South America, Russia is embraced by the new socialist government of its largest economy, Brazil, as it was by Brazil’s former conservative government. In the Middle East, where the U.S. is widely distrusted, Russia has good relations with Israel as well as with all the major Muslim nations, whether Sunni or Shia, Arab or Turkish. In Africa, where Russia is viewed as the only major European country to eschew colonialism, Russia is widely feted, unlike former colonial powers such as France, whose troops have recently been evicted from Mali and Burkina Faso, and where French President Macron confirmed that “the age of Françafrique is over.”
While Russia may be shunned by the West, it is welcomed by most of the rest, as seen in the regional alliances in which Russia plays a leading role: the Russia-China-led Shanghai Cooperation Council, which includes former Soviet countries as well as India and Pakistan, and the BRICS countries (Brazil, Russia, India, China and South Africa), whose GDP now exceeds that of the G7. Some two dozen countries have expressed interest in joining Russia in these economic and security alliances, including major regional powers such as Saudi Arabia, Turkey, Iran, Egypt, Indonesia, and Mexico.
Russia’s rise will be news to Western audiences, which for decades have been prey to a demonization of Russia, and since its invasion of Ukraine have been fed a steady diet of Russia’s decline. “Business Retreats and Sanctions are Crippling Russian Economy,” a Yale School of Management study published last summer, may have been correct in claiming that "Russia has lost companies representing ~40% of its GDP, reversing nearly all of three decades worth of foreign investment," but it failed to anticipate that Russia would quickly recover in a more self-reliant form.
The West’s sanctions, the most severe ever imposed on a country, were meant to teach Russia the lesson that “aggression does not pay,” in the words of NATO’s Stoltenberg. The ferocity of the sanctions, the subsequent cancellation of Russian artists and athletes in the West, and expectation of an end of the Russian Federation by political and military elites such as Former Commanding General of the US Army in Europe, General Ben Hodges, shocked Russia out of its complacency, and led it to learn very different lessons: That the West was determined to destroy it, and that its existence required it to arm itself to the teeth and end its economic interdependence with the West.
The sanctions on Russia awoke the sleeping giant that had been Russia, and the West may soon be faced with the consequences.
TruckDriver9
Hummingbird
Large quantities of cheap ukrainian grain dumped in Eastern European countries, destabilized local markets and forced - under the threat of farmers protests - several countries to impose restrictions.
The European Commission is working on a financial assistance program / bribe to solve the problem
The European Commission is working on a financial assistance program / bribe to solve the problem
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TruckDriver9
Hummingbird
There's nothing really stopping ukrainian grain (and eggs, honey, oil, flour, etc.) from reaching markets in Asia and Africa - Eastern European countries could have opened their borders only for the transit of ukrainian agriculture products without allowing them into local markets. Fun fact, despite low price of ukrainian grain, prices of processed foods (bread for example) didn't go down in Hungary, Poland, etc.
Similar story with the Black Sea grain deal - overwhelming majority of ships leaving ukrainian ports do not sail to the global south. Most of the sea exports go to China, Spain and Turkey.
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TruckDriver9
Hummingbird
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TruckDriver9
Hummingbird
Foolsgo1d
Crow
De-dollarisation is not going to happen for a while simply due to certain factors in the USA's favour.
1: The US consumer
When it comes to consumption the US has no rival. This is why the domestic situation is crucial for the USA to lose to Asia/China post 2032. Internal strife that will break the USA apart will hit US based consumers and will cause the country to decline.
2: Rule of law and property rights.
There is a reason property in the UK, Canada and US is popular. Property rights are superior to many other countries. Foreign capital is settled into this area by a huge amount. You do not have that security in China, Asia or places like South America. THe UK and Canada do not have a large geographical area to take advantage of as opposed to the USA which is gigantic in comparison.
3: The US dollar is not going anywhere fast. Other currencies are suffering just as much and as long as the US consumer is the biggest cow on the market it will stay that way. But see point #1.
4: Gold and silver will never be a form of currency as it does not offer what politicians and central bankers want; socialism. Stand on a soap box and claim to give a million tonnes of silver to a certain group? Not happening. Billions of paper money? Sure thing.
Post 2030 is the key date for the USA.
1: The US consumer
When it comes to consumption the US has no rival. This is why the domestic situation is crucial for the USA to lose to Asia/China post 2032. Internal strife that will break the USA apart will hit US based consumers and will cause the country to decline.
2: Rule of law and property rights.
There is a reason property in the UK, Canada and US is popular. Property rights are superior to many other countries. Foreign capital is settled into this area by a huge amount. You do not have that security in China, Asia or places like South America. THe UK and Canada do not have a large geographical area to take advantage of as opposed to the USA which is gigantic in comparison.
3: The US dollar is not going anywhere fast. Other currencies are suffering just as much and as long as the US consumer is the biggest cow on the market it will stay that way. But see point #1.
4: Gold and silver will never be a form of currency as it does not offer what politicians and central bankers want; socialism. Stand on a soap box and claim to give a million tonnes of silver to a certain group? Not happening. Billions of paper money? Sure thing.
Post 2030 is the key date for the USA.
Other countries can step in to fill the void for consumption, we are after all only able to consume because of our unlimited debt, it always comes back to another major currency willing to let itself float in competition with the dollar. The Chinese are working on this (hence trade deals in Yuan) and, yes, I believe by 2030 we will see China make a major move (de-peg).
Key recommendations include continued rebalancing of the economy toward services, to which increased household consumption could contribute. Strengthening household consumption would also increase domestic demand. Better access to quality public health and elderly care, and education would reduce the need for precautionary saving.
Source: https://www.adb.org/sites/default/f...ve-year-plan-high-quality-development-prc.pdf
People underestimate how rapidly things are moving in China.
Easy_C
Peacock
I'd argue it will, but it's NOT going to just collapse in the next year or two the way gold bugs think.
Heck. Something as simple as a fortune 500 company changing it's accounting software can be a 3-4 year project. When you're dealing with this kind of scale change takes time.
Will it happen in the next year or two? Absolutely not.
Will it be the case within the next 5-7 years? I'd say odds are good.
India is this month set to become the largest exporter of refine fuels to Europe. With Indian imports of Russian oil also peaking, there is no doubt that Europe is still predominantly buying Russian oil, just at far higher prices than before.
At the same time, the Ukrainian Department of Defense has managed to cause offense in India with a tweet featuring Kali, the Hindu goddess of death.
At the same time, the Ukrainian Department of Defense has managed to cause offense in India with a tweet featuring Kali, the Hindu goddess of death.
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