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Ukraine conflict sparks disintegration of global economy into blocs

Ukraine conflict sparks disintegration of global economy into blocs

Geneva, Apr 11 (Prensa Latina) The World Trade Organization (WTO) on Monday warned about disintegration risk of global economy into separate blocs, as a long-term effect of the Ukraine conflict and sanctions against Russia.
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A WTO Secretariat´s report about impact on global development pointed out that sanctions against Russia could cause the main economies to move towards a “decoupling” based on geopolitical considerations.

Nations could act in this way with the purpose of reaching out greater self-sufficiency in production and trade, the document added, thus warning that “even if no formal blocs emerge, private actors could choose to minimize risk by reorienting supply chains.”

In any case, revenue losses would be quite severe, especially for emerging and developing economies, the report said, adding that global gross domestic product (GDP) could drop by 5% in the long run, particularly by restricting competition and stifle innovation.

WTO, however, considered that final impact of these measures is not quite clear, given exchangeable nature of commodities provided by Russia to global markets: mainly food, fuel and minerals.

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