Influx of refugees, economies turned upside down: no return to “normal” after the Covid and the war in Ukraine | World
Massive influx of refugees, economies turned upside down: the world will not resume its course “as if nothing had happened” after the pandemic and the consequences of the war in Ukraine, the European Bank for Reconstruction and Development (EBRD) warned on Tuesday. ).
Such a conjunction of events, which would have already been difficult for governments or companies to manage if it had been spread over a decade, “occurred in the space of only three years”, notes Beata Javorcik, economist chief at the EBRD. “And with the prospect of further turbulence to come, it is clear that there will be no return, as if nothing had happened, to the affairs of the pre-pandemic period,” she continues, quoted in a EBRD report released on Tuesday.
“The largest forced displacement since the 1940s”
The London-based organization, founded in 1991 to help countries in the former Soviet bloc transition to a market economy, has since expanded its reach to include countries in the Middle East, Central Asia and North Africa.
Russia’s invasion of Ukraine resulted in “the largest forced displacement of people in Europe since the 1940s”, notes the EBRD in its report entitled “Business Unusual”. However, the influx of Ukrainian refugees also has “the potential to increase the European Union workforce by around 0.5% by the end of 2022,” the organization adds. “This could alleviate some labor shortages in Europe’s rapidly aging economies.”
The report reveals that nearly three out of ten Ukrainian refugees in Europe are already employed in their host country. In general, “the number of people displaced against their will – whether within or across international borders – has increased dramatically in recent times. The total number worldwide is expected to exceed 100 million by the end of 2022,” the report notes. Nearly two-thirds of all refugees come from Syria, Ukraine, the West Bank and Gaza, Venezuela or Afghanistan. , and nearly half are children.
The report notes in particular that the populations concerned have “become much more tolerant towards the refugees in their countries”, since a war exploded at the gates of the EU, a proximity that facilitates empathy with the displaced.
On the other hand, the economies of these countries are still experiencing significant difficulties, according to the report, which underlines for example that companies are affected by record levels of debt. Many “zombie companies” – in debt and in difficulty, nevertheless avoid default thanks to access to cheap financing. A phenomenon that penalizes healthier companies in these countries, believes the EBRD.
Ms Javorcik expects inflation to rise further in the EBRD’s regions of activity, largely focused on Eastern Europe, as “high energy prices are expected to persist through 2024 “. The EBRD had lowered its growth forecast for its countries to 3% in September and the outlook is darkening. “We had (in September) a pessimistic scenario with access to Russian gas completely cut off for Europe and I think that we are getting closer,” according to the economist. “At the moment, we don’t see any signs of a recovery,” insists Ms. Javorcik, as the bank’s next set of official growth forecasts are due in February.
Extreme weather events
The report also notes that the increase in extreme weather events increases the risks for global supply chains, “with serious implications for the production, manufacture and distribution of goods around the world”. “Environmental considerations must become a central element of business risk management,” insists the EBRD.
The organization further believes that policymakers could consider introducing “stress tests” for supply chains in critical sectors, similar to those carried out on banks after the 2008 global financial crisis.
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