BlackRock CEO Larry Fink said in a letter Thursday that Russia’s “separation from the world economy” after the assault on Ukraine has led governments and businesses to consider reliance on other countries.
“Russia’s invasion of Ukraine has put an end to the globalization it has experienced over the last three decades,” Fink wrote.
Russia’s isolation encourages companies and governments around the world to reassess their dependencies and reanalyze their manufacturing and assembly footprint, said the CEO, who manages the company’s $ 10 trillion assets. I predicted.
However, in some countries, companies operate domestically or “neighboring”, so they can benefit from focusing on building domestic industries, he said.
Fink said the coronavirus pandemic is already moving these wheels.
In the early days of the pandemic, countries struggled to secure the urgently needed personal protective equipment made in China. When the economy resumed and demand surged, supply chain bottlenecks helped push inflation to levels not seen in decades. In particular, the shortage of semiconductor chips has plagued the industry over the past year, from automakers to tech companies. And now, Russia’s assault on Ukraine, followed by swift and penal Western sanctions and the withdrawal of numerous companies, has disrupted the international export market. The price of Brent crude, a global benchmark, soared above $ 139 a barrel in early March as buyers feared a supply shock, albeit with oil. Since then, it has come down.
“Energy security has joined the energy transition as a top priority in the world,” Fink said.
Coal consumption is expected to increase next year as Europe and Asia seek to break away from Russia’s oil and gas, but soaring energy prices could make renewables more competitive, Fink said. Said it was expensive.
“In the long run, I believe that recent events will actually accelerate the transition to more environmentally friendly energy sources in many parts of the world,” Fink writes.