Russia’s Ukraine invasion could be a global economic ‘game changer’ – The Washington Post

by | Mar 5, 2022 | Financial

But the war’s long-term consequences could be more profound. Even before Russian President Vladimir Putin sent tanks and missiles hurtling toward Ukraine, years of deteriorating U.S.-China relations and failed global trade talks had stalled the tighter integration of finance and trade flows that had been anticipated during globalization’s heyday.What comes next is unlikely to mirror the Cold War’s distinct blocs. Even as the global economic order fractures, no rival ideologies compete for supremacy. And China’s harsh authoritarian turn under President Xi Jinping co-exists with extensive commercial ties to the United States, Europe and Japan. But governments, corporations and investors all are adjusting to a new reality.AdvertisementStory continues below advertisement“It’s the end of one era and the beginning of another, which is a less complete form of globalization than we had ambitions for in the immediate post-Cold War era,” said Michael Smart, managing director of Rock Creek Global Advisors. “We have to think differently about what we mean by the global trading system. There are certain requirements that, if you don’t meet them, you’re not part of it. You can’t be in the club.”In just over a week, Western allies have imposed one of the most rapidly moving sanction campaigns in modern history against Russia. (Luis Velarde/The Washington Post)With the United States, Europe, Canada, Britain and Japan uniting to punish Russia with unprecedented financial sanctions, the war has triggered a “major geopolitical realignment” akin to the aftershocks from the 9/11 terrorist attacks, according to Citibank analysts.Virtually overnight, most major Russian banks were blocked from moving money across borders. Moscow’s stock market has been closed for a week. Russian customers are cut off from much of the world’s most advanced technologies.AdvertisementStory continues below advertisementOn Friday, Russia’s isolation deepened as the country’s communications regulator blocked access to Facebook, one of the few sources of information t …
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