How Bad Are The Consequences Of The War Between Russia And Ukraine?

Talking about wars in this 21st century, we usually only see wars caused by the US or its allies, often those wars will be legalized, ie accepted by the majority of the world, do not condemn harshly.

 

But Russia's war against Ukraine is completely different, this is a war against Ukraine, but actually against the US and its Western allies, so it can be considered that this is the first time that we have witnessed the heaviest and harshest sanctions on a country that has long been free to open up. To what extent can the US embargo Russia? Can Russia make it through or will it become a second Korea? Let's analyze it together in this video.

Up to this moment, the war between Russia and Ukraine has expanded to the second battlefield, which is the economic battlefield. If in the geographical battlefield, the damage was mainly about the lives of the army and a small part of the Ukrainian people, in the economic battlefield, the damage was much heavier. It affects not only the Russian economy but also the leading major economies in Europe such as Germany and affects the whole world. However, Russia remains at the center of the economic war and will inevitably face huge losses.

 

Over the past few days, the United States and several major European countries have announced a series of sanctions and financial embargoes against Russia, unprecedented for such a large economy. Many experts believe that "these policies have caused a financial disaster in Russia", the US and many European countries have announced their intention to cut some Russian banks from the SWIFT (Society for Worldwide Interbank Financial Telecommunication) exchange, this is like the US having dropped a financial nuclear bomb on Russia, which will stop many Russian banks from dealing in trillions of dollars.

The US Treasury and the European Central Bank also announced that they would freeze Russia's foreign exchange reserves, which would mean that the Russian central bank holds hundreds of billions of dollars that they can convert into rubles in a crisis to support the currency. By freezing the reserves held in banks in the West, the US and Europe are depriving Russia of its best weapon. In the event of a currency crisis, basically, for Russia it means that: "your assets have become worthless in an instant, you don't have 300 billion dollars worth of assets anymore, you have zero dollars".

 

A lot of big businesses are also withdrawing from Russia, some countries now refuse to do business with Russia altogether, Russia is also banned from participating in international football, hockey and skating events.

 

No country has ever faced such a global freeze, the effects are hard to predict but some of the consequences are clear, London stocks of several Russian banks fell more than 50%, the ruble being traded lost more than 30% of its value. That will cause the price of some Russian imports to skyrocket, unemployment will soar unless the central bank starts printing money to keep companies alive, but this will almost certainly cause inflation, even worse. However, to reduce the bad impact of inflation, the Central Bank of Russia has doubled the prime interest rate to 20%, Russia's economic crisis may trigger a brain drain, many Russians are said to be looking to settle abroad because they fear living with a collapsing economy, these problems could set the stage for a lasting decline in Russian prosperity.

 

However, Russia is still a very large economy, only 12 other countries have more total exports than Russia, so Russia's influence on the world is very important, Russia trades in oil, gas and coal for much of Europe, wheat to the Middle East and Africa, Russia and Ukraine together account for about 20% of the world's corn exports and 80% of the country's sunflower oil. Auto companies are heavily dependent on Russia for wiring, and much of the world is dependent on Russia for oil, aluminum, palladium and platinum used for car parts and jewelry.

If the war continued, production in Ukraine would be halted and Russia would be isolated, it would have widespread effects around the world, including wheat shortages, food inflation and oil prices increase. Not to mention, many countries still rely on Russia like Tajikistan, a small Central Asian country north of Afghanistan, dependent on remittances from Russia for more than 20% of GDP, that means that if workers in Russia stop sending money to their families in Tajikistan, that country's economy could fall into recession.

 

Economic crises can spark political revolutions and Tajikistan shares a border with China's westernmost Xinjiang province, then the Russian crisis turns into an economic crisis in Central Asia, possibly into a Chinese political problem, China will be politically unstable, there is a possibility of civil war again, if there is such a domino effect, it is very likely that there will be a global war.

 

Now, what we expect is for countries to make concessions and compromises with each other, move towards peaceful negotiations to lift the embargo, get life back to normal, and bring gas prices down to the ground. But no, countries still embargo each other, punch each other more and more fiercely, you ban me from going to the market, I don't sell gas for you to cook, so we both starve to death, this is not a reasonable choice at all.

 

Hopefully the international community will put more pressure on countries to make concessions to each other to move towards peace negotiations, the problem now is not only Ukraine, but also the West has been deeply involved in this economic war, thank you for watching the video, goodbye and see you again.