The world was still recovering from the pandemic, then the war between Russia and Ukraine hit the world again and stunted the growth. The pandemic caused the world’s GDP to shrink, and just as it was recovering, the Russia-Ukraine conflict threatens global economic growth once more.
Countries that were heavily reliant on other countries for supplies, as well as developing countries, have suffered. Worst of it all, these countries do not really have the means to get back on their feet. This is causing them to fall back into debt traps and become even more reliant on other countries.
Let’s see some countries that are facing a major economic crisis.
According to the World Bank, Ukraine’s economy is estimated to shrink by 45.1% because of the Russian Invasion. This figure might vary with the intensity and the time of the war. The war has cost a lot of Ukrainians their homes. Besides that, the country cannot provide its citizens with necessities due to supply chain disruptions, and most of the resources, including manpower, are refocused on the war.
The war is already costing Ukraine a lot of money and on top of that when or if the war stops, Ukraine is going to suffer to build itself again. The damage to the infrastructure and the cost to rebuild homes is going to be massive.
2. Sri Lanka
Sri Lanka was recovering from the pandemic hit when it realized that it had run out of foreign currency reserves and foreign debts, summing up to 51 billion dollars. This did not just cost economic turmoil in the country, but also a lot of violence and protests. The protests resulted from the citizens blaming the Rajapaksa brothers and their government. The protests got violent after the police fired the water cannon and tear gas on the crowd asking for the resignation of the President of Sri Lanka, Gotabhaya Rajapaksa.
According to the Human Rights Watch, around 95% of Afghani homes are suffering from insufficient food consumption and food insecurity. The reason for the economic crisis in Afghanistan lies in various factors and decisions made by the Government of Afghanistan and international institutions. But, the major reason is the fact that the US and Taliban could not settle an agreement that would have averted the humanitarian effects of the change in governance. Furthermore, the World Bank, under US pressure, cut off 200 Million Dollars worth of funds.
Prior to the revolution, Sudan’s long-running economic crisis appeared to be subsiding. However, its people are now facing unprecedented violence and starvation, posing a new humanitarian threat. Everything from healthcare to cooking gas is being raised because of a military-led government. Inflation has moderated marginally, but it still stands at 260 percent in January, making it one of the world’s highest rates. Healthcare charges will be reassessed, according to Sudan’s ruling council.
Lebanon’s economic and financial crisis is likely to rank in the top 10, possibly the top three, most severe crisis episodes globally since the mid-nineteenth century. Lebanon has also been dealing with the COVID-19 pandemic through intermittent lockdowns and other measures to mitigate the impact. The country’s financial collapse, which began in 2019, is a tale of how mismanagement ruined a vision for reconstructing a country. Following the 1975-1990 civil war, successive governments built up debt with little to show for it. Certain economists have compared Lebanon’s banking system to a Ponzi scheme. Because the Lebanese pound had been tied to the dollar at 1,500 for over two decades, this was the case. Foreign donors withheld billions of dollars in aid because of the government’s failure to implement reforms.
Apart from these five countries, Syria, Yemen, Libya, Iraq, and many others are experiencing economic hardship. International institutions and the leaders of these countries are attempting to re-establish growth.