The world is reeling under soaring inflation driven by skyrocketing food and energy prices. Inflation in the European Union, home to more than 300 million people, stood at 8.1 per cent in May. In the US, the consumer price index in April touched 8.3 per cent.
While the Russia-Ukraine war has severely dented the global supply chain network, the hurried and ill designed sanctions imposed on Russia have aggravated the problem.
Sanctions against Russia, which is sitting on 11 per cent of global oil reserves while producing 21 per cent of world’s total gas production demands, are beginning to boomerang.
The shortage is not likely to get sorted anytime soon. “High prices won’t quickly produce the supplies needed for increased post pandemic demand. “Logistics are getting in the way,” US weekly magazine Barrons quoted Peter McNally, an energy expert at Third Bridge as saying.
According to reports, in the UK and other parts of Europe, people are gearing up for a brutal winter due to the gas shortage due to the choking of supplies in the wake of the sanctions.
Concerns have also arisen over the continent’s energy security.
“It is bound to happen as the common people across the world are feeling the heat, their savings levels are falling and uncertainties rising. The worst impacted are the poorer nations. The Western countries may want to blame other suppliers including India but that neither solves the problem nor does it address the core issue,” an Indian policymaker told India Narrative. He said part of the blame must be borne by the West as well. “Here you were talking about Russia which is a global supplier of fertiliser, food and energy, you cannot just thrash out sanctions within a few days,” he added.
The initial brouhaha by the Western media immediately after the sanctions on Moscow which included barring Russian banks from accessing SWIFT international payment, murmurs over dissatisfaction over such measures are growing. The ruble, plunged to an all-time low of about 150 to a US dollar in March but today it is hovering around 60 even as the war entered its fourth month.
“At a time when global supply chains haven't fully recovered from the pandemic, the situation in Ukraine and the sanctions imposed on Russia have exacerbated disruptions to supply chains. With shortages seen in energy, raw materials and food supplies, countries around the world are bearing the brunt of Washington's geopolitical gambits,” Beijing based news organisation Global Times said.
Despite pundits writing glorious obituaries of the Russian economy, Moscow has managed to weather the sanctions storm.
Russia relatively food secured even as the world stares at rising food prices
