Ukraine and the Economic Consequences of Russian Aggression
What Will the Invasion Cost?
Black Soil. It’s a special kind of soil that provides a huge boost to agricultural production. Any region with high quantities of black soil is capable of significant farming operations, and if managed well, could be an agricultural superpower in the next few decades.
25% of the world’s black soil is in Ukraine. It’s the breadbasket of Europe, the Middle East, and some Asian countries, and is projected to become one of the world’s largest agricultural exporters soon. Its recent land reform policies have improved its production significantly.
Halting of Ukraine’s food production could lead to skyrocketing food prices across the region, and Russia’s impending invasion of the country is the first in a series of dominoes that could spell disaster for Europe and Russia.
Beyond just food, there’s an issue of natural gas — Russia’s biggest export, and something that is now in jeopardy after Europe has announced sanctions. Russian natural gas expansion was looking to utilize the new NordStream 2 pipeline, which has been halted. It could lead to spiraling gas prices, a ripple effect on economies across the world. And while the US may be energy independent, high petroleum prices are still a major problem for the world.
In addition, sanctions on Russia could prove devastating to the Russian people. The Russian elite have no problem harming the quality of life of millions of their own citizens for a quick land grab in Ukraine. Targeted sanctions on the Russian elite are seemingly useless, and Putin has consistently flouted international law in order to ignore those sanctions, and he seems almost willing to force Europe into sanctioning his citizens. Meanwhile, the war in Ukraine is going to destroy the lives of millions of Ukrainian citizens, as the country will be forced to grapple with the Russian Federation on its own, and while Ukraine has a formidable military, it is nothing compared to the Russians’.
It’s a sobering realization of the devastation that may unfold from Putin’s rash decision to assault the sovereignty of neighbors and the unfortunate costs that will be borne by the world as the militaristic fantasies of an authoritarian regime play out in Eastern Europe.
