The fighting is in Ukraine, but the risk of World War III is real.
- Officials and analysts warn that conflict could quickly escalate into a confrontation between Russia and the West.
- The dangers of warning that Russia’s invasion of Ukraine could cause a world war
The Ukraine Invasion
Commentators have been openly worried since Russia invaded Ukraine that the escalating conflict may trigger World War III. Former Ukrainian Prime Minister Oleksiy Honcharuck went even farther, declaring that “World War Three has already begun.”
At first glance, these claims seem to be much too exaggerated. Unlike World Wars I and II, which spanned continents, Russia’s bloody invasion of Ukraine was a two-country struggle. Despite widespread support for Ukrainian forces, no precedent exists for England and France declaring war on Germany two days after invading Poland on September 1, 1939. Looking at the discursive qualities of the phrase “global war,” it seems that a Third World War will only happen when people subjectively agree that it has happened.
The concept of a “global war” existed even before World War I. “Europe would face a ‘world war’ unless Servia responds to the Austrian ultimatum,” American media warned in July 1914. The Germans feared a “Weltkrieg,” while the French feared a “Guerre Mondiale.”
Commentators used several terms to describe the fight after it ended, including “world war,” among others. American newspapers were saturated with references to “the recent worldwide war” and depictions of “world war soldiers.” “Great War” and “La Grande Guerre” were used more commonly by English and French commentators. Lenin used the terms “global war” and “capitalist war” interchangeably in post-World War II Russia. In conclusion, each country subjectively framed the fight in ways that allowed them to provide worth and purpose to it.
The terms “World War II” and “Second World War,” like “World War I,” were coined in anticipation of the conflict’s commencement, with many observers dreading a “Second World War” in the 1930s. Indeed, such fears date back to 1918, when proponents of a harsh peace for Germany underlined the need of denying Germany the “sinews for a Second World War.” Until 1939, when a new war loomed, the words “First World War” and “World War I” gained popularity. Only after 1945, with the advantage of hindsight, did the phrase “World War II” become hallowed in Western consciousness.
In contrast, the threat of a third global war develops during World War II.
Similar reservations were voiced after 1945. Journalists expressed concerns that the world was on the brink of a third world war throughout the Cold War, especially during the Korean War, the Cuban missile crisis, and the Vietnam War. When the Soviet Union invaded Afghanistan in 1980, headlines such as “This Could Be World War III” and “Has World War III Begun?” appeared in the press.
Surprisingly, the gap between reality and imagination might be linked. On one side, the constant dire forecasts of World War III may have functioned as a deterrent to such a conflict. On the other hand, adopting such a rhetorical stance may cost. If people are continually warned of a threat that never occurs, they may become desensitized.
Effects on Global Economy
In March, the International Monetary Fund (IMF) declared that the violence is a massive blow to the world economy, causing growth to slow and prices to rise.
The growing war between Russia and Ukraine is expected to have significant consequences on the global economy, which is still reeling from the effects of the coronavirus outbreak.
According to (IMF), both Russia and Ukraine are essential commodity producers, and interruptions have increased worldwide prices, particularly oil and natural gas. Food costs have risen, with Ukraine and Russia accounting for up to 30% of world wheat exports. According to the IMF, slower growth and higher inflation would impact the whole global economy.
In its Spring 2022 Economic Update for Europe and Central Asia, the World Bank said that the war had given a second big shock to the world economy in two years and had resulted in a humanitarian disaster. “Even before the conflict, the global recovery was slowing due to rising geopolitical tensions, ongoing COVID-19 flare-ups, dwindling macroeconomic support, and persisting supply constraints,” it said.
Hunger and Poverty
According to the World Bank’s baseline prediction, Ukraine’s poverty rate will rise from 1.8 percent in 2021 to 19.8 percent in 2022, based on the $5.50 per day threshold rate. The recent rise in food costs may drive an extra 40 million people below the $1.90-per-day poverty level, citing estimates from writers of a Centre for Global Development blog.
“Expensive food and energy imports would raise consumer prices,” it warned, “but subsidies and price ceilings for fuel, food, and fertilizer may mitigate the immediate impact—but at a cost to the budget.”
Trade-in Energy
“Oil prices were already climbing before the conflict, alongside a resurgence in demand that followed the global economic recovery. Moreover, after supply worries resurfaced when OPEC+ output fell short of estimates despite little spare capacity,” the International Energy Agency.
Reluctance to purchase Russian while the current tensions prompted the price of Urals to trade at a discount of $20/bbl. “By late March, the price of Brent crude oil had softened somewhat, to over $100 per barrel.” On Monday, Brent oil slid 3% to less than $100 per barrel.
Commodity Exchange
According to the IMF, in addition to increased gasoline costs, more enormous supply-chain disruptions might negatively impact. Global value chains may also harm disruptions, penalties, and rising commodity prices. This might worsen current difficulties and lead to longer delivery times and higher manufacturing costs for firms worldwide.
Shipping expenses have also increased due to increasing fuel prices and insurance fees.
Travel and Services
Russia and Ukraine are among the top ten nations in total international departures. They are a significant source of income for tourism-dependent countries in Europe, East Asia, and the Pacific, the Middle East.
“The conflict is expected to foreign tourism’s post-pandemic recovery, which was already sluggish due to COVID-19.” An increase in geopolitical tensions might spark a fresh collapse in foreign tourism. Similar to the dramatic drop and subsequent lackluster rebound after 9/11.”
Finance and Debt Are Reserved
The World Bank said in March that emerging markets and developing countries had high debt levels. According to their calculations, these economies account for almost 40% of global GDP.
Geopolitical tensions have “darkened the outlook” for developing nations that are significant commodity importers or rely on tourism or remittances. External borrowing costs grow throughout Africa, with bond spreads increasing by 20 basis points.
Financial spillovers are likely to fall in advanced countries exposed to Russian financial assets, such as Austrian banks. They have access to the sanctioned country’s economy through commercial links and local presence. “European bank equities have lost more than a fifth of their value since the start of the conflict.”
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