The Russian invasion of Ukraine comes at a delicate time for the world economy, which was just beginning to recover from the ravages of the COVID pandemic. The Russia-Ukraine crisis will now have far-reaching economic consequences on a global level. The International Monetary Fund has warned that Russia’s war with Ukraine and the subsequent sanctions imposed upon Russia will have a severe impact on the global economy. “Price shocks will have an impact worldwide, especially on poor households for whom food and fuel are a higher proportion of expenses,” the IMF said.
IMF also suggested that Governments will need to find ways to support the most vulnerable households and help offset rising living costs. Food and energy prices have surged in recent days and supply chains have frayed globally, adding to the inflationary pressures that governments were already struggling to tackle after the COVID pandemic.
What does this mean for those of us living far away from the conflict zone, tucked away in a remote corner of the world? Well, this is not to sound the death knell but the impact of Russia-Ukraine crisis on us will be no less than any others. In fact, it could possibly be worse for us if the government of India failed to come to the rescue.
For instance, Ukraine and Russia produce about 30% of the world’s wheat exports and 80% of sunflower oil, which are used in food processing. If harvesting and processing is hindered in a war-torn Ukraine, or exports are blocked, importers will struggle to replace supplies. In India, with the severe threat of supply disruptions, companies will be left with not many options but to consider hiking prices of daily-consumed edible oils within weeks. According to leading edible oil makers in the country, over 70 per cent of India’s crude edible oil demand is met through imports. This could mean that even a slice of bread could become costlier for us very soon!
The world today is so interconnected and interdependent, much more than we realize. The crisis in faraway Ukraine will definitely have its impact felt here in Nagaland too. With the crisis there disrupting the global supply chain, fuel prices are expected to rise in India this week. Price hike in petrol and diesel will directly cause inflation in the market. For a place like Mokokchung, where almost every commodity is imported from outside the state, the Russian invasion of Ukraine could mean higher cost of living for us, paying more for almost every product or service.