Geopolitical Risks of the Russia-Ukraine War

– The war between Russia and Ukraine could have far-reaching geopolitical consequences beyond the borders of the two countries.
– The global grain supply and food inflation could be severely impacted by the war, as Ukraine and Russia are major suppliers of wheat to developing countries.
– The conflict may lead to a failure of the 2022 Ukrainian wheat harvest and a drop in Russian wheat exports.
– Many countries depend on Russian and Ukrainian grain imports to feed their populations, and they will have to find new sources of grain at higher prices.
– Rising food prices, combined with other factors like increased shipping and fertilizer costs, could lead to civil unrest and political instability in affected countries.
– The Arab Spring uprisings in 2011 serve as a reminder of how food insecurity can trigger social and political upheaval.
– A Civil Strife Risk Index has been constructed to identify countries most at risk of civil unrest based on factors like grain imports, food insecurity, youth unemployment, mobile phone subscriptions, and democracy index ratings.
– Saudi Arabia and the UAE, as major oil exporters, and Turkey, with its close trade links to the UK and EU, are the most concerning from an economic and investing perspective.
– Political developments in these countries should be closely monitored as they could indicate potential global supply chain disruptions and inflation spikes.
– Investors should keep an eye on the situation in Turkey, particularly due to its high inflation rate and the possibility of a sovereign default.
– This article does not constitute investment advice and the opinions expressed are the author’s own.