1 Impact of Russia - Ukraine War in Business Economy Overview Russia and Ukraine war make the world situation devastating and which is only now beginning to recover from the strain of the coronavirus pandemic. In March of 2021 March Russia built up the army and in 2022 February they attacked Ukraine. Russia mainly attacked Ukraine for the reason they are joining NATO and Russia felt it would be a big security issue. After that the whole world gets worried about what will be the after effect, specially EU countries. Right now, in every country facing some inflation for war, that’s why price hike in every sector. For example, last month in Bangladesh, 1 dozen eggs were sold for TK 180- and lower-class people suffered much for this price hike. It cautioned that the cost of war may be "much higher," listing a long list of concerns from a sudden cutoff of Russian supply in Europe to weaknesses on the financial markets brought on by high debt and high asset values. Global oil and gas prices, as well as those for wheat, corn, sunflowers, and different precious metals, have all been impacted by the war. Bangladesh is also being affected by the conflict between Russia and Ukraine on a global scale. Let's say the conflict between Ukraine and Russia lasts a long time and expands to the rest of Europe. Under that situation, the nation's garment sector might be in jeopardy because 64% of the nation's exports of apparel and 58% of its overall exports are made for the European market. After all of this, the world economy tries to move forward with some additional activities and every country helps each other try to overcome these bad situations. I think this situation helps us to find the best solution to how to end the war and balance the economic sector in the whole world. 2 Discussion World business economy is dropping rapidly, because raw materials are supplied from Russia and Ukraine. So, at this time unscrupulous businessmen are increasing the raw material price and that's why one side of the local marketer created a big price hike. Aljazeera reporter William Horobin states that, “According to the OECD, the war in Ukraine would cost the global economy a "hefty price" in terms of slower growth, higher inflation, and possibly permanent harm to supply networks.” Also added that, “According to predictions made public on Wednesday in Paris, the group reduced its outlook for global GDP this year from 4.5% to 3% and quadrupled its inflation projection to roughly 9% for its 38 member countries. It anticipates a 2.8% growth rate in 2023.” For the upcoming days it will be hard for the whole world. After reading several articles, I discovered some of the most common and effective crises occurring right now. Majority of points stated by the World Bank Group, which basically point-out how this war affects the whole business economy. Global commodity markets Energy and agricultural commodity prices have surged. Price increases have been large for commodities where Russia and Ukraine are key exporters. Since the beginning of the war, coal prices have jumped by 60 percent, European natural gas by more than 30 percent, and wheat prices by around 40 percent. Brent crude oil prices reached a 10-year-high of $130 per barrel at the beginning of March as the UK and US banned Russian oil imports; however, prices later fell to close to $110 per barrel. Prices have been extremely volatile, with very large intraday moves, and in the case of oil, shifts in futures curves. 3 Europe’s dependence on Russia for energy renders its economy vulnerable. The euro area is grappling with a 400 percent increase in gas prices and a doubling of oil prices since January 2021. Russia is also dependent on the euro area for its exports, with around 40 percent of its crude oil and natural gas going to the Eurozone. Global trade flows The war has disrupted trade, including global transport routes, and adding stress to existing supply disruptions. The reciprocal ban on flights between Russian and European air space risks disrupting international air cargo. Around 20 percent of global air cargo is reported to be affected by airspace bans. Shipping lines have suspended bookings with Russia, making it difficult for Russian businesses to export. Global financial markets For some financial institutions, a recession in Russia is likely to result in substantial losses. Some European banks have material linkages with Russian entities facing severe losses, such as Sberbank. The majority of European banking exposures to Russia are through Russia-based subsidiaries. Large equity losses for exposed banks seem probable, as implied by drops in the equity prices of European banks perceived to be exposed to Russia. Conclusion After all of this there are still lots of crises occurring, but if this is still ongoing, the world will have to use it and find alternatives to overcome these bad situations. So, strengthening structural policies is necessary. The effects of the conflict also necessitate fundamental policy solutions in a variety of fields, including as long-term economic potential, commerce and logistics, food security and productivity, and energy security. Energy security Food security and productivity Trade and logistics Long-term growth. 4 References 1. https://www.aljazeera.com/economy/2022/6/8/russia-ukraine-war-threatenslong-lasting-impact-on-global-eco 2. https://www.consilium.europa.eu/en/policies/eu-response-ukraineinvasion/impact-of-russia-s-invasion-of-ukraine-on-the-markets-eu-response/ 3. https://businessinspection.com.bd/ukraine-vs-russia-impact-on-bangladesh/ 4. https://www.thehindu.com/news/international/explained-the-effects-of-therussia-ukraine-conflict-on-the-global-economy/article65312083.ece 5. https://thedocs.worldbank.org/en/doc/5d903e848db1d1b83e0ec8f744e555700350012021/related/Implications-of-the-War-in-Ukraine-for-the-GlobalEconomy.pdf 6. https://mitsloan.mit.edu/ideas-made-to-matter/ripple-effects-russia-ukrainewar-test-global-economies 7. https://reliefweb.int/report/world/how-can-we-stop-crises-russian-war-ukrainespurring-food-insecurity-africa
