“Globalization is not a monolithic force but an evolving set of consequences – some good, some bad and some unintended. It is the new reality.” –John B. Larson
The war in Ukraine will have many outcomes. First and foremost, it will bring misery to innocent people in Ukraine, and our hearts and minds are with those suffering there today. Other outcomes are yet to be determined but will have long-term impacts on our global economy and local communities.
Ukraine and Russia are both major exporters of wheat and their undoing will have a tremendous impact on global markets. Gas prices and downstream oil products will be severely impacted and will begin to increase both the cost of production and the cost of goods at the store. While this is painful for some, it could quickly have a profound impact on those with the least financial flexibility in countries and communities worldwide.
Businesses reliant on moving goods by truck, the airline industry, and the powerful agricultural sector will begin to see even more volatility than in the past few years as the conflict continues and US inflation increases.
If you are considering buying an electric vehicle to combat these high prices, you may have to wait a while. Not only is there a chip shortage, but the raw materials used to fuel clean energy solutions are subject to an intense geopolitical battle between China and the USA.
Finally, this conflict has the potential to permanently change the global trading patterns and partnerships that have developed over the past 50+ years. The end result is that our supply chains, economic alliances, and patience will be tested as they haven’t been in several generations.
We will need to study history to look for the tools to manage this crisis and to endure the changes likely to come our way. The economic development tools we used in the past to fight inflation, preserve our standard of living, and move the world forward will have to be revised and adjusted to the modern world. Staying united in the face of these great pressures will be first among them. Perseverance and patience will be needed.