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Ukraine crisis could trigger cascading risks globally

EXPERT COMMENT

The effects on the wider world from the Ukraine invasion go far beyond the waves of shock and horror being felt from this escalating conflict.

Russia and Ukraine rank 11th and 55th respectively in terms of their national economies but, for the global supply of critical resources such as energy, food, and minerals, these two countries together are far bigger hitters – and both the threat and reality of resource flows from them being reduced have already driven up global prices.

The world is already facing a cost-of-living squeeze coming out of the COVID-19 pandemic, so further price spikes or supply constraints have the potential to seriously undermine food and energy security, equitable access to basic goods and services, and social stability around the world – which can then potentially create systemic risks for economies and societies.

The global implications of the Ukraine conflict are only just beginning to be explored fully but the immediate impacts of the crisis on global markets are already well-documented. In the first few days after Russia’s invasion, energy prices spiked, triggering further fertilizer price rises – as fertilizer production is highly energy intensive – which in turn is contributing to food price rises because fertilizer costs are an important factor in food production.

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Original article link: https://www.chathamhouse.org/2022/03/ukraine-crisis-could-trigger-cascading-risks-globally

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