While the world was still gathering the pieces left after 2020’s pandemic led crises in 2021, the year 2022 started with declaration of invasion of Ukraine by Russia, resulting in ten million refugees and spike in prices of essential commodities like crude oil, natural gas, sunflower oil, zinc, etc.
Authors
Sunny Sabharwal, Associate Professor, Jindal Global Business School, O.P. Jindal Global University, Sonipat, Haryana, India.
Rajesh Mehta, a leading International Consultant in the field of Market Entry, Innovation & Public Policy.
Summary
Every financial crisis leaves a dent on the economy, people’s lives and most importantly, our hopes for a better future. While there’s no standard definition of a financial crises but it is characterised by the catastrophic deterioration in economy coupled with significant and rapid drop in the value of assets. Crises are like storms: they don’t differentiate on any basis be it people, religion, location. The magnitude might differ, but all are impacted.
Historically, there have been various causes of financial crises: economic, social, geo-political, asset bubbles, epidemics (now pandemics) etc. Whatever may be the cause, the impact was frightening.
The latest financial crises were triggered in 2020 attributable to Covid-19 pandemic which shook the entire world. Lockdowns, exponentially rising deaths, shortage of food, medical and other resources, economic recession and rising unemployment, slump in asset prices and what not. The entire world and people living in it witnessed the worst times of the 21st century.
But humans are cursed with the habit of non-satiation. While the world was still gathering the pieces left after 2020’s pandemic led crises in 2021, the year 2022 started with declaration of invasion in Ukraine by Russia.
The purpose of this article is not to comment on the logic/correctness of the war but to assess the aftermaths of any event which pushes us to another financial crises.
Crude prices are already at multi year highs, Europe is facing economic recession in multiple member nations, credit ratings have dropped, interest rates are rising, inflation is at alarming rate and life of people has become a nightmare.
One can say that many countries, which were still recovering from the impact of Covid-19 and its new versions, have gone back decades in terms of economic progress.
Published in: BW Businessworld
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