Russia’s attack on neighboring Ukraine will have a massive impact on the global economy, which is far from being definitively assessed at present, said Isabell Koske, an economist at the OECD, at an online event held by the Berlin office of the industrialized countries organization yesterday.
In the now heated discussion about how to deal with the aggressor Russia in the future, Clemens Fuest, President of the Munich Ifo Institute, advises against completely breaking off trade relations with Russia.
However, it is important to diversify more in the energy sector, i.e. to look for new sources of supply for gas, oil and coal, for example, in order to reduce dependence on Russia. “If you have these additional sources of supply, you should continue to buy Russian gas, because then you can say to Putin: You are dependent on us, but we are not dependent on you,” said Fuest.
After the Russian attack on Ukraine, which not only caused human suffering but also disrupted many supply chains, Fuest does not believe in an end to globalization. “It may even be the opposite, a boost for globalization,” said the Ifo President.
Galina Kolev, trade researcher at the German Economic Institute in Cologne, expects that many companies will reassess their international value chains, but she does not believe in an end to globalization either. “The advantages of the international division of labor are simply too great.”
She could rather imagine that companies will build larger buffers in their supply chains in the future, carry out more warehousing and look for additional suppliers in order to reduce dependencies. This will cause additional costs for companies, but that is the price for more resilient value chains. (hn)
Source: Nachrichten
