I never thought the war in Ukraine would happen, I was naive in thinking that wise heads would come together and a treaty would be signed between Ukraine and Russia (brokered by the European Union), that Ukraine would remain neutral and never join NATO (even if it did at some point join the EU) agreeing never to allow foreign bases to be built in their country. This and progress on the Minsk agreement were all the assurances that Russia wanted before the war commenced. A peace so easily gained – so quickly dismissed by NATO (America).
So where are we now, who are the winners and who are the losers?
Well, Ukraine of course is the big loser; this war will go on and on, next comes Europe,
Real GDP growth in both the EU and the euro area is now expected at 2.7% in 2022 and 2.3% in 2023, down from 4.0% and 2.8% (2.7% in the euro area), respectively, in the winter 2022 interim forecast (WiF) 16 May 2022
The euro area annual inflation rate was 8.1% in May 2022, up from 7.4% in April. A year earlier, the rate was 2.0%. European Union annual inflation was 8.8% in May 2022, up from 8.1% in April.17 Jun 2022
And this is whilst they are still able to buy gas and oil from Russia.
The UK now free from the EU (Brexit) still has an umbilical cord to America and Europe so will suffer as badly if not worse, for we no longer have a strong industrial base, the only thing that is keeping the UK afloat is a high oil price, oil revenue from Scottish waters flowing into Westminster coffers.
The UK Gross domestic product (GDP) fell by 0.3% in April 2022, after a decline of 0.1% in March 2022; UK GDP increased by 0.2% in the three months to April 2022.13 Jun 2022
And you do not have to have a degree in economics to work that one out, we all know how much it costs to fill a tank with petrol or buy food at the local supermarket. Inflation is going now where but up. In its report published alongside today’s Spring Statement, the OBR said it expected CPI inflation to peak at 8.7% in the fourth quarter of 2022. It also forecasted that UK inflation would remain above 7% in each quarter from the second quarter of 2022 until the first quarter of 2023.4 days ago. Changing the Tory leader will do nothing to improve a lot of the ordinary families in the UK.
This leaves America: Consumer prices up 8.6 per cent over year ended May 2022: The Economics Daily: U.S. Bureau of Labour Statistics. The government means its official.
So bad is the situation in the west that Biden had to go cap in hand to the Saudi Princes asking them to open up the oil taps to stop runaway inflation? This war in Ukraine has caused more problems for the west than they thought possible. They expected the sanctions they placed on Russia, to kill Russia’s economy stone dead, but the complete opposite is true, as for the midterm elections in America in November, Biden is in real shit and he has not got the boots for it.
What stands out since the war in Ukraine is a seismic shift in power away from the west to the east.
Russia Economists pointed out that a rebound in oil production due to growing domestic demand and a shift to export buyers in Asia has been a big driver for the Russian economy. Gas output was another critical economic engine, fuelling revenue gains on spiking prices, (sorry about the pun).
According to Bloomberg, economists from JPMorgan Chase, Citigroup, and other big banks are slashing their outlooks for the drop in output this year to as little as 3.5%. Russian officials, some of whom foresaw a contraction of as much as 12%, are updating their forecasts to less than 6%. Look no further than the Russian ruble for a measure of investor confidence. The ruble, which has become the world’s best-performing currency this year, is driven by Russia’s high proceeds from commodity exports, a sharp drop in imports, and a ban on households withdrawing foreign currency savings.
Seasonally adjusted data from the Development Centre at Moscow’s Higher School of Economics showed industrial production in Russia was up 1.7% in May from the previous month. “The break in the contraction in May could be a sign that producers have initially adapted to the shock of anti-Russian sanctions,” the centre said.
What is driving the Russian economy? Countries like China and India now buying from Russia. India has an exploding population growth and they need economic growth to feed their growing population unlike Europe has a high percentage of young people, they were not going down the road of European leaders and cut off their noses to spite their faces and placing sanctions on Russia.
India will likely reign as the world’s fastest-growing economy, India is expected to grow by 7.1-7.6 per cent in 2022-23 and 6-6.7 per cent in 2023-24. This will ensure that India reigns as the world’s fastest-growing economy over the next few years, driving world growth.
And what of China GDP 2022, Siu: China’s 2022 GDP Growth At 4.8%2 days ago Bloomberg.com
There has always been a split between west and east but this war, and these sanctions placed on Russia have only turned a split into a widening canyon and divided west and east more sharply than ever before.
All America has achieved with its failed foreign policies and economic empire building is to hand the mantel of economic power to the eastern hemisphere, and all the bombs and bullets they send to Ukraine will not change that.
The leaders in Europe must wake up to where this war is taking them, stop the hypocrisy – trade goods, not bullets with Russia – Stop the War.