IMF and how they aim to stabilize global economy in the midst of the Russia-Ukraine conflict

Article: https://foreignpolicy.com/2022/03/23/imf-ukraine-war-russia-economic-impact-georgieva-gopinath/

For my third Blog I decided to look how the Russian and Ukrainian war might affect the global economy. The question that arises is how will this war affect the global economy, will it reshape and restructure the economy along with disrupting the supply chains that were built over decades. With these countries at war we can see the importance of the IMF, international monetary fund, and how it has helped to stabilize Ukraine. The IMF plays an important role in the global economy and can help aid countries even in times of crisis, to ensure that a country will not ultimately collapse. The IMF does a lot more than just helping countries that have financial struggles and has the power to keep a country at war in a stable economy. 

From the standpoint of the IMF, they are looking to help the country of Ukraine to keep a functioning country, and they are monitoring the economy of Russia to see how this conflict will impact the country even with their aid. The IMF used emergency funding of $1.4 billion for Ukraine in order to maintain a functioning country that ensures electricity and water in the worst affected areas even. Although this seems like it has helped Ukraine, Russian debt has almost completely been paid off and because of war their paying off of the debt becomes complicated.  Even though Russia is experiencing complication on paying off debt, it would not greatly impact the global economy too much, unless there are banks that will close assets in Russian goods that can cause great negative effects. For Russia, there will be long term effects that will be experienced because of the debt needing to be repaid and the war causing complication of doing so. With these ideas in mind we are only able to begin to scratch the surface of the economic impacts that the war between Russia and Ukraine have on the world. 

The war between Russia and Ukraine shocked the world when Russia decided to invade, and because of the economy not being able to recover fully from Covid-19 the war has only continued to cause economic growth for both countries to decrease and inflation to increase. Russia’s invasion on Ukraine has caused many industries and trade to go down and this affects economies and cultures of the developing countries connected to the global economy. For example Russia and Ukraine have a lot of wheat and barley that they export to other nations, with the countries at war these nations will likely have food shortages and prices to rise. Another major industry being affected, more specifically in Russia, is energy. The energy from Russia has had many sanctions on it and has led to prices for gas rising all around Europe and the US because they do not want to give Russia money to pay off debts and to be able to go to war. The IMF has taken charge to stabilize developing countries affected by the conflict and the country of Ukraine who is expected to see a decrease in economic progress by nearly one third. 

The IMF throughout the conflict has tried to compensate for the problems that have arisen from the very start of Russia’s invasion. The IMF has looked at different strategies to help stabilize the global economy through means of spending emergency money on Ukraine and giving developing countries that use the goods of Ukraine and Russia, new ways of obtaining the goods and services that are needed. The IMF encourages countries to help out the developing countries because they are in a vulnerable position of not being able to afford the food prices provided based on the inflation occurring. The IMF will figure out a way to limit the damage that the Russian and Ukrainian war will have on the economy. Right now the biggest concern is maintaining economic stability to ensure the economies of countries affected by this war will not cause an economic downturn on a global scale.