The impact of the war in Ukraine on economic development, consequences for world trade

Abstract

The war in Ukraine created a humanitarian crisis of enormous proportions and also a serious blow to the world economy. From a macroeconomic point of view, rising food and energy prices will reduce real incomes. CNUCED's express assessment of the impact of the war on trade and development in Ukraine confirms that the outlook for the global economy is rapidly deteriorating due to rising food, fuel and fertilizer prices. This study examines the impact of the crisis in Ukraine on global trade and development, highlights the importance of supplies of food, energy and certain industrial resources from Russia and Ukraine, and examines how the war poses significant risks to food and energy security and exacerbates the difficulties associated with with the supply chain. This study also shows that if a war were to split the world economy into separate blocs, the loss of income would be significant, especially for developing countries. Furthermore, it underscores the importance of a rules-based multilateral trading system, if only because the World Trade Organization provides functions that can help mitigate the effects of the crisis. It is important for international trade to better understand, analyze and monitor the nature, magnitude and implications of war for trade and development. Only with a clear understanding of these impacts can we create reliable supply chains, limit further losses in trade and economic development, and prevent the deepening of inequality between developed and developing countries. The purpose of the study is to analyze the impact of the war in Ukraine on economic development and determine the consequences for world trade. The research used the methods of induction and deduction and comparative analysis. The study shows that among the main threats and risks that arise for the world economy are destabilization, rising inflation, unemployment, the emergence of a food crisis and famine in some countries of the world, and an increase in world prices for raw materials. The consequences of the war in Ukraine will be felt by most countries of the world, and their scale will depend on the course and duration of the war on the territory of Ukraine. The biggest loss and the biggest problem of the war is human loss, but there are also huge economic problems that are felt far beyond the borders of Ukraine.