The war in Ukraine began in late February 2022 and is only becoming more devastating for nations worldwide. Very few people in the world can say they have faced no effects of this war, whether they realize it or not. With 7 million Ukrainians displaced, many dead, and the war still intensifying, we can’t forget the impact this war has brought on all of us.
However, it is complicated. Let’s talk about the war in Ukraine and its impact on food, energy, and resources around the world!
The War in Ukraine’s Impact on Developing Countries
Over the last eight months, we’ve seen a surge of violence and challenges both inside and outside of Ukraine. This has led to a food crisis, rising energy prices, threats to supply chains, and other issues all around the world.
Unfortunately, developing nations have been hit the hardest as a result. Particularly, those in the Middle East and Africa have experienced the worst effects, as many nations rely on wheat imports from Ukraine and through the Black Sea.
Believe it or not, 36 countries worldwide import more than 50% of their wheat from Russia and Ukraine. The war has dramatically reduced exports from both countries.
On top of that, Russia is also the largest exporter of fertilizers. Russia alone exports 15.4% of the world’s fertilizers, making it more difficult and expensive for farmers to grow crops worldwide.
For countries like the United States or China, this isn’t a major issue. Both nations are formidable producers of fertilizers. However, for developing nations around the world, this has entirely cut off their access to domestic food security.
Moreover, rising energy prices affect developing nations disproportionately as well. $4 per gallon of gasoline may seem overwhelming to somebody earning $40,000 a year in the United States, but it can be a major barrier to heat, transportation, and daily life for somebody earning $5,000 or less in a developing nation.
The War’s Effect on Energy Prices
Energy prices have skyrocketed since the war in Ukraine began, and its effects were felt worldwide. Russia is one of the largest exporters of fossil fuels, which still make up the majority of the world’s energy supplies. This includes energy for electricity, heating, cooling, and transportation.
Nowhere has this crisis affected energy supplies more than in Germany and other parts of Europe. Many of them rely heavily on liquified natural gas imports through pipelines from Russia.
Russia has either strategically blocked sales or European countries have chosen to block imports. Of course, there was also the environmentally-devastating sabotage of the Nordstream Pipelines, the cause of which still remains unclear.
Regardless, those in Germany, Poland, and other European countries are facing an energy shortage this upcoming winter. Many of these nations rely largely on natural gas and oil for heating, and it is still unclear how their governments intend to navigate these challenges.
Supply Chain Issues
The Black Sea is of great geostrategic importance to Vladimir Putin’s Russia. Unfortunately, it’s just as important for the Middle East, Western Asia, Europe, and Africa.
Fortunately, supply chain challenges are finally looking up. Deals have been made to halt Russia’s naval blockade in the Black Sea in July, and 400 cargo ships were deployed this past week carrying 9 million metric tons of grain. While this is good news, it is unclear how long it will last.
Still, this should ease hunger issues for many people in developing nations, and potentially help ease food costs worldwide. However, energy is another story.
Again, the Nordstream pipelines were sabotaged, which is exacerbating the energy crisis in Europe. However, this poses new challenges for the rest of the world, as Europe now has to draw more oil from other sources that are already stretched. This is disrupting the normal flow of the global supply chain.
Of course, Ukraine and Russia together play a major role in the global supply chain, both having access to key regions of Europe, Asia, and the Middle East. As a result, resources spent on the war is also causing greater disruption.
Likely Outcomes in the Near Future
Currently, the US position (in November 2022) is to arm and aid Ukraine’s strategic defense against the invasion. However, without diplomacy, this is likely to carry on for a considerable time. Putin has even indicated that Russia is preparing for a long-term war.
Unfortunately, this means that the war will likely continue into the foreseeable future. For wealthier nations, this means planning ahead for high food prices, energy prices, and supply chain issues. For developing nations, this may mean facing displacement or other incredibly challenging and life-changing decisions.
However, that doesn’t mean the situation is hopeless. Studies from cases like Syria suggest that every dollar spent on prevention saves $5 to $7 once conflict ensues or worsens. It’s easy to assume the cost would be much greater than $5 to $7 in Ukraine’s case, especially considering these unique and unprecedented challenges.
Like it or not, that means that our best course of action is both preventative and diplomatic. Essentially, the cost of inaction from the West is far greater than the cost of action. As it stands, there is no indication of this playing out in the near future.
Stay Safe and Secure
Now that you know how the war in Ukraine has affected supply chains, this hopefully clears up some of your lingering questions. We live in uncertain times, but there are steps we can take as a society for our security and the security of the world. We just have to take them!
Stay up to date with our latest news, and learn about some tips on staying happy during these uncertain times!
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