www.spiked-online.com BY PHIL MULLAN
The economic consequences of Russia’s bloody and despicable assault on Ukraine are very much a secondary consideration to the immediate human and geopolitical implications. And since the various national responses to the conflict are still so fluid, it is far too early to be able to identify the war’s precise longer-term economic effects. Nevertheless, it is possible to tentatively suggest what could unfold on the international economic front.
At least in the short term, the direct and indirect disruptions to economic relations arising from the invasion will almost certainly damage prospects for economic growth and boost inflation far beyond the combatant countries. In particular, the relative toughening of sanctions will generate economic difficulties in many areas beyond Russia itself.
While the war is of huge importance geopolitically, it would, however, be misleading to overstate its economic effects, given all the other enormous economic challenges already in place. For example, the Financial Times claims that the war has ‘shattered hopes of a strong global economic recovery from coronavirus’. But this implies that a strong recovery was already on the cards. There has long been a prevalent complacency that ignores the fundamental atrophy afflicting most advanced industrialised countries. War or no war, the high debt and weak investment common to many Western economies are likely to mean a continuation of the sluggish growth of the past decade.
