WASHINGTON, March 31 (RHC) The prolongation of the conflict in Ukraine could transform the global supply chain, an analysis by website nakedcapitalism.com warned.
Although Russia appears to have concluded that it must permanently rebalance its economy, away from Europe and the United States towards Asia and the Middle East, economists are already examining the impact on supply chains, the report said.
The text, signed by Tobias Korn, a doctoral student in economics, addresses the impact of the crisis on the Ukrainian economy, whose production has almost come to a standstill, and points out that in the case of Moscow, the sanctions imposed have ended decades of economic cooperation in various sectors .
The scientist specified that, despite intense public debates and the fact that no embargo has been imposed on oil and gas imports from Russia, several large European countries are already fearing the economic consequences of abandoning these difficult-to-substitute imports.
Analyzing different variants and their impact on global supply chains, Korn found that the recovery of Russia and Ukraine depends largely on how long the conflict and sanctions last and how the rest of the world reacts.
The scientist warned of negative consequences if the crisis in Ukraine lasts so long that it becomes difficult to relocate supply chains and then conclude new international cooperation agreements to consolidate a new structure for the world economy.
In this situation, he said, our analysis suggests that both Ukraine and Russia would find it difficult to regain their pre-conflict international economic position.
The German economy minister’s recent visit to Qatar and talks to improve trade ties could be one of the first steps in that direction, he said.
However, current considerations to promote economic and political relations with Ukraine and even to initiate the process of that country’s accession to the EU could be a useful measure to counteract the loss of access to trade caused by the conflict with Russia.
It should be noted that Russia is a major world producer of fuel, wheat and mining products important to the world economy, and Ukraine is considered an important breadbasket at the international level, and when the US-NATO-sponsored crisis is over In time, the negative effects will be felt around the world. (Source:PL)