The current state of international affairs has many wondering what will happen to Europe? Will the United States get involved? What will the economic repercussions be after this war is over? Russia has been known to have a lot of its economy wrapped up in crude oil, and its most significant consumer of this natural resource has been Europe, specifically the Netherlands, Germany, and Poland. (Patten, 2022). Sanctions on Russia put in place by the European Union could have powerful effects on the Russian economy, especially considering that Russia exports 49% of its crude oil. (Patten, 2022). Overall this could have very destructive effects on the Russian economy, which is the goal of these sanctions. According to XE Currency Converter, as of March 21, 2022, the Russian Ruble is worth nine thousandths of a United States dollar.
When this is compared with the value of a Ruble on October 27, 2021, where a Ruble was worth 1.4 hundredths of a United States dollar (2022). The sanctions that the European countries and the United States government have placed on Russian exports could have the desired outcome. There is another possibility; however, this possibility is that war has taken its toll on the Russian economy. According to a consulting site run by the European Union, “The direct losses from the war alone- including liquidated military equipment and casualties among personnel- have cost Russia about $7 billion in the first five days.” (2022). War is an expensive endeavor. However, the war winner usually gains many economic benefits after the fact. There is an instance where war leaves a country in financial ruin, which would be found on the loser's side. The country or countries that lose a war usually end up in a state of great economic depression or possibly even an economic collapse.
References
1 RUB to USD - Convert Russian Rubles to US Dollars. (n.d.). Retrieved from https://www.xe.com/currencyconverter/convert/?Amount=1&From=RUB&To=USD
Consultancy.eu. (2022, March 02). Research: 'Ukraine war costs Russian military €20 billion per day'. Retrieved from https://www.consultancy.eu/news/7433/research-ukraine-war-costs-russian-military-20-billion-per-day
Patton, M. (2022, March 21). How Russia's Invasion Of Ukraine Could Affect Europe And U.S. Economy. Retrieved from https://www.forbes.com/sites/mikepatton/2022/03/21/how-russias-invasion-of-ukraine-could-affect-europe-and-us-economy/?sh=4f328fc07d69
Great overall post. While Europe is being handcuffed by the biggest war on the continent since WWII, others throughout the world are feeling the effects. Right here in the United States we are having a record inflation. We have given Ukraine approximately eight billion dollars in aid. Meanwhile Flint, Michigan STILL does not have clean drinking water. We have a problem with homelessness here in America and an education gap that continues to increase. We need to start focusing on our country and making it safe for the ones that live here. I have a soft spot for people in need, we just have to find a way to take care of number one first (America). If you don’t everything else will fall to the way side.
Department of Defense. (2022, July 8). Fact Sheet on U.S. Security Assistance to Ukraine. Retrieved from https://www.defense.gov/News/Releases/Release/Article/3088006/fact-sheet-on-us-security-assistance-to-ukraine/
I thought this was a very informed and insightful post—-great work. I think you did an excellent job of showing how impactful recent events have truly been on Russia and it’s people. I know the majority of the world tends to focus on one aspect of the situation that is often media generated, but this shows free thinking to take your own perspective and research some of the implications of recent events.
I was shocked to find out how vulnerable the Russian economy was and also how small the economy was. Comparably to Texas economy or less than Italy's. Also its main source of income were oil and gas which makes it dependent on foreign trade. The fall in its currency over a few days have been surprising. Glad you tied this to economics and the effect on the society as a whole.