Legal Sanctions and the Economic Impact of Russian and Ukrainian War
The Ukrainian-Russian conflict has been going on for 3 years now. Though the fighting between Ukraine and Russia largely ended in 2015, the economic impact of this conflict has been immense. For one, it’s caused a sharp decline in GDP, which will be felt for many years to come. In addition, the bloodshed has led to a massive refugee crisis that is being felt throughout Europe and the United States. The cost of war is high in both human and economic terms.
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The Economic Impact of the Ukrainian-Russian Conflict
The economic impact of the Ukrainian-Russian conflict has been immense. For one, it’s caused a sharp decline in GDP, which will be felt for many years to come. In addition, the bloodshed has led to a massive refugee crisis that is being felt throughout Europe and the United States.
When talking about finances and economics, we often focus on two things: income and expenditure. Income is how much money a person or company makes in a given year; expenditure is how much they spend in that same amount of time. The economic impact of this conflict has led to both less income and greater expenditure. A country’s GDP measures its total income divided by its total expenditure. This means that when there are less exports and imports, the GDP decreases and vice versa. With Ukraine at war with Russia, it’s not surprising that their exports have declined significantly and imports have increased as well as their expenditures going up exponentially in relation to their income.
The cost of war is high in both human and economic terms.
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Russia’s economy has suffered tremendously because of the Ukrainian-Russian conflict.
When Russia invaded Crimea in 2014, it caused an increase in Russian military spending and a decrease in investment into other sectors of their economy. This led to a sharp decline in GDP. The conflict also led to sanctions that are still being imposed today, which have had a devastating impact on the economy as well.
These sanctions have led to a decrease in demand for Russian goods and services, including oil, wheat and weapons. In addition, the country has seen significant capital flight and an outflow of skilled labor.
The war with Ukraine has been costly for Russia in many ways; just take a look at these numbers:
* Russia’s GDP declined by 3% because of this war
* Russia will be paying $12 billion more per year due to the sanctions that were enforced
* There is an estimated loss of $1 trillion due to the drop in the price of oil
* The country is losing skilled workers who can’t find work because of the unemployment rate
* The value of rubles dropped significantly because Russians are trying to move their money elsewhere
Unfortunately, all these numbers point to one conclusion: this war has been incredibly costly for Russia.
Ukraine’s economy has been deeply impacted by the conflict with Russia, to the point that the World Bank predicts it will decline by 1.5% in 2016. The economy is also predicted to contract by another 2.5% in 2017. Ukraine has thus far experienced a 10% decline in GDP since 2014 and its GDP per capita is now 18th lowest among European countries.
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Why is there a refugee crisis?
The refugee crisis is a direct result of the fighting. Along with the economic cost of war, comes a humanitarian cost. The refugees in this crisis are fleeing their countries because they fear for their lives. These refugees have relocated to conflict-ridden areas and neighboring regions as well as Europe and the United States.
Furthermore, the conflict has led to a sharp decline in GDP for both Ukraine and Russia. In Ukraine, industrialized output fell by 9 percent during 2014-2015 due to fighting in Eastern Ukraine, which caused a decrease in industrial production. This decrease in production led to an estimated $1 billion loss in tax revenue for the government of Ukraine. Likewise, Russia experienced a 5% decline in GDP between 2013-2015 due to Western sanctions and lowered oil prices (which account for about 50% of Russian exports).
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Sanctions on Russia
The United States, EU and other countries have put sanctions on Russia. These sanctions are meant to punish Russia for the Ukrainian conflict. These measures have had a significant effect on the Russian economy. The Russian stock market has fallen by 50% since the sanctions were enacted in 2014.
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Carbon emission and climate impact due to war
War has a huge impact on the environment. The two conflicts in Ukraine and Syria created more than 1.6 million refugees. This not only caused an extensive humanitarian crisis, but also increased carbon emissions and climate change. War often disrupts agricultural production and leads to deforestation, which then releases more greenhouse gases into the atmosphere. In addition, it can lead to wasted resources like oil or coal that are used in battle.
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The Ukrainian-Russian War has had a dramatic impact on the economies of Ukraine, Russia, and the rest of the world. The fighting in Ukraine caused a sharp decline in GDP that will be felt for many years to come. In addition, the bloodshed has led to a massive refugee crisis that is being felt throughout Europe and North America. Although there has been some recent peace talks to end the war, it’s unclear if there will be any long-term peace. As of now, this conflict is still costing people their lives and causing economic instability around the globe.