Home ›› 25 Feb 2023 ›› Front
It has been one year since Russia launched an attack on its neighboring country Ukraine. On February 24, 2022, Russian President Vladimir Putin announced a full-fledged attackon Ukraine.
Russia at the time of launching the attacks said it was conducting a “special military operation” to “denazify” Ukraine. The military attack in the last year has left several Ukrainian cities upended, while millions of people fled their homes for safety. Videos and photos shared in the initial days of the Russian attack showed people taking refuge in underground metro stations as buildings were bombed by Russian soldiers.
Russia’s war against Ukraine completes a full year on February 24, with the US President Joe Biden making a surprise visit to Kyiv to mark it. While the situation in Ukraine remains grave, the spillovers of Russia’s aggression have seemingly ebbed.
Most of the media outlets across the world take a quick look at the major issues the global markets and the Indian economy have been confronted with and how these forces have evolved over the last year.
Within two months of the war, the World Bank said that Ukraine’s economy could shrink by 45.1%. “The war against Ukraine and sanctions on Russia are hitting economies around the globe, with emerging market and developing countries in the Europe and Central Asia region expected to bear the brunt,” it said. “The magnitude of the humanitarian crisis unleashed by the war is staggering. The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure,” World Bank Vice President for Europe and Central Asia Anna Bjerd said.
In September 2022, Reuters quoted a report saying that the Russian invasion caused over USD 97 billion in direct damages to Ukraine till June 2022. However, Ukraine would need USD 350 million to rebuild the country. Stepping up its aid to war-torn Ukraine, the US on Thursday announced increased financial support for it. US Treasury Secretary Janet Yellen said that an additional $10 billion in economic assistance is being readied for the Ukraine in coming weeks. “As President Biden has said, we will stand with Ukraine in its fight - for as long as it takes,” Yellen was quoted as saying by Reuters.
Global Supply Chain disruption
Global supply chains have been hit massively in the last two years. First came the coronavirus pandemic in early 2020, which forced countries to shut down and brought global trade to its knees. Then came the Russia-Ukraine war, which endangered supplies of grains and energy products in particular.
But global supply chains have returned to pre-war levels – at least if one looks at the Baltic Dry Index.
The index, compiled by the London-based Baltic Exchange, measures the average price of shipping dry bulk across several routes and is considered a lead indicator of economic activity.
The index was as high as 5,650 in early October 2021 before it fell to under 1,300 by the end of January 2022. However, the Russia-Ukraine war pushed the index over 3,000 by May 2022. It has since collapsed to under 1,000.
A natural consequence of supply chains being disrupted is higher prices, and this has been clearly visible for food and fuel items.
Prices on the boil
The Food and Agriculture Organization of the United Nations’ Food Price Index is now back at pre-war levels, although the cereals price index – at 147.4 in January – is higher than its January 2022 level of 140.6. The price of India’s crude oil basket has also fallen appreciably in recent months and is averaging just over $80 per barrel in February, sharply lower than $116.01 in June.
Food prices, which were already on a tear in 2021 after Covid-19, leaped again after Russia’s invasion of Ukraine on fears of shortages and disruptions to Black Sea trade, reported Reuters
Last year the UN food agency’s average price index hit its highest level on record, up 14.3% from the previous year. The index had already gained 28% in 2021.
Higher energy and input costs, adverse weather and continued strong global food demand are adding to pressure from significant market disruptions. Over the whole of 2022, four of the five food sub-indexes - cereals, meat, dairy and vegetable oils - reached record highs.
Food price pressures are easing, but that does little to soften the blow for many developing nations, where food and energy prices make up a larger share of spending. Shocks related to the COVID-19 pandemic and the war in Ukraine mean the world is unlikely to meet a longstanding goal of ending extreme poverty by 2030, the World Bank has warned.
Sanctions and energy crisis
Disinformation has also focused on energy issues against the backdrop of Western sanctions against Russia, and skyrocketing oil and electricity prices.
In addition to countless incorrect claims about prices or supplies, posts say the EU’s top diplomat Josep Borrell wants to ban homes from being heated above 17 degrees Celsius (63 degrees Fahrenheit).
A massive campaign came to light in Europe in which leading news sites -- mainly in Germany but also other European countries -- were being imitated to pump out pro-Moscow messages.
The website of Germany’s top tabloid, Bild, for example, appeared to feature an article about a boy killed in a cycling accident in Berlin after streetlights were turned off at night, as Europe’s top economy faced an energy crunch.But the news site and the article were fake.
Anti-refugee narrative
Ukrainian refugees have also been targeted, particularly in neighbouring countries such as Poland and Slovakia.
Manipulated or misleading photos or videos have proliferated online purporting to show refugees as neo-Nazis, criminals or the source of trails of garbage on public transport. Other misleading messages, shared in different European nations, claim that Ukrainian refugees are paid more in social benefits than pensioners or veterans in the host countries.
