The war unleashed on Thursday against Ukraine will unleash and accelerate many negative global trends. This is because Russia is an important country and, by attacking Ukraine, it is not only attacking a country of forty million people, it is also increasing the major tensions between Russia and the West. This is the near-peer rivalry that the US national defense strategy has warned about and said the US must prepare for.
One of the first major issues that will be affected by the war is the global economy. Brent crude prices of oil are already going up and have passed $100 for the first time since 2014. Oil prices were at record lows back in 2020. That was during the pandemic when it looked like people wouldn’t be using as much because so many parts of the transit systems around the world had shut down. Now oil is back and prices are going up.
At the same time, world stock markets will likely be beaten down by this conflict. Global chaos and uncertainty will drive market volatility. What this also means is that while oil and some other goods, like gold, may become more expensive, there would be add-on ripples.
One ripple is inflation. Inflation is already going up globally, in part due to the pandemic and epic pandemic spending. Supply chain chaos has also driven up prices. Car prices are skyrocketing in places like the United States amid reports of chip shortages and other issues affecting automakers. This means the used car market is also increasing in prices. Housing is also much more expensive than in years past.
All of this has major ramifications for inflation. With inflation will come other strains if salaries do not keep up with the price rises. Bankruptcies may rise and there will be other issues.
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FOR CHINA and Russia, however, the economic chaos that is fed by the Ukraine crisis is more good news. Weak Western economies will not be able to impose sanctions effectively. Inflation in the US or a weaker dollar will be challenged as Beijing and Moscow exploit this chaos. China already exploited the pandemic chaos to put the screws to Western countries and expand its footprint in the Middle East, Asia and Africa. Australia recently said that China even targeted one of its planes with a laser.
War being unleashed in Ukraine will also lead to wars in other places. As Russia appears to be successful in its airstrikes, we will see other countries challenge the global order. If Russia enjoys impunity for attacking Ukraine in an unprovoked aggression, then many other countries may feel they can move forward with attacks. Although Iran has already carried out these kinds of attacks, it may become even more bold. China may also be emboldened. This could mean a laundry list of more wars and chaos.
With the increase in war, we will see a decline in the post-Cold War global security framework, this so-called liberal international world order or “New World Order” that the US helped construct in 1990 and 1991. Washington was standing up to Saddam Hussein's aggression at the time. Now experts are predicting a new world of “might makes right.” It could mean that China will challenge Australia more and create a similar stratagem for invading Taiwan that Russia is using in Ukraine.
Turkey may also increase its attacks in Syria and Iran may encourage proxies to attack the US in Iraq and Syria. For Israel this is worrying because Hezbollah may be emboldened. We have already seen how impunity has emboldened Iran in Syria and the Syrian regime; now there may be an increased sense that it can do as it wants there. Syria says there was an airstrike near Damascus on Thursday morning that led to three of its soldiers being killed. This could be one indication that Syria tensions may rise.
THE UKRAINE crisis is a major test for Western powers. There are questions about how this may reverberate across the West and whether NATO will stand strong and show that it is ready to do what is necessary to stand up for partners and friends. Butif there are major divisions in Europe and countries do not agree to stand up to Russia, then the Ukraine crisis could be a symbol of the further decline of Western democratic unity.
The Ukraine invasion is a major incident because Russia openly built up forces and attacked. It recognized two parts of Ukraine as independent countries and then sent “peacekeepers” into those new states. A day later, Russia began the bombing of Ukraine. It didn’t have any pretense of why it began to attack and did so in an unprovoked manner.
This is a big test for Europe. Will the US try to put in place a “no fly zone?” Will any air defense or weapons be sent? Or will western countries do nothing?
The war in Ukraine will not only bring with it rising global economic chaos, but also potential for more wars and increasing decline of the world’s remaining democracies. This hinges on Western and US-led responses. But if America just pushes sanctions on Russia and Russia is able to weather those sanctions or shrug them off – and if the West is not united on the Ukraine issue – the message will be sent that more of these kinds of invasions and redrawing of borders could occur.