The Banking Executive Magazine - April 2022 Issue

Who Owns World Resources? oping world due to the COVID-19 pandemic. Restrictive measures on airspace, contractor uncertainty and security concerns are complicating all trade routes going through Russia and Ukraine. The two countries are a key geographical component of the Eurasian Land Bridge. In 2021, UNCTAD simulated that the freight rate increase during the pan- demic raised global consumer prices by 1.5%, with particularly oversized effects in vulnerable economies such as small island developing states, landlocked developing states and least developed countries. OECD Impact Analysis According to OECD, the war in Ukraine could cut global economic growth by more than one percentage point in the first year after the inva- sion, the impact could also cause a deep recession in Russia if it is sus- tained. OECD also warned that the conflict could push up prices glob- ally by about 2.5%. OECD called for targeted financial support for those on the lowest in- comes in response. Although Russia and Ukraine only make up a small percentage of the global economy, they are huge pro- ducers of raw materials. The OECD assumes in its new re- search that oil prices will remain el- evated by one-third, gas by 85% and wheat by 90%. Outside Russia and Ukraine, OECD suggested that most pain would be felt in Europe, with up to 1.4% knocked off the economy. Europe is more dependent on Russia and Ukraine for supplies of energy as well as food. The countries have, in the past, been described as the "breadbasket" of Europe. Ukraine War’s Global Economic im- pact will hit the poorest hardest, ac- cording to OECD. Russia’s invasion of Ukraine will be felt by households around the world through higher energy and food prices, with disruptions to trade and fragile confidence contributing to a significant weakening of global eco- nomic growth ROLE OF ARAB BANKS IN BALANCING WORLD RESOURCES This article reveals the importance of fair governance and equitable distri- bution of world resources. The analysis by OECD, IMF, UNC- TAD, and world experts of the im- pact of Russia war on Ukraine reveals serious dangers to world re- sources and economies. This is man- ifested in rising prices, inflation, trade barriers, health care crisis, and cyberattacks. This is leading to eco- nomic downturn and stagflation with the poorest countries mostly hit by the adverse impact. In light of this, we suggest the follow- ing recommendations for Arab banks and government. These recommen- dations should be seriously consid- ered in order for Arab banks and ISSUE 160 APRIL 2022 the BANKING EXECUTIVE 19 Figure 2: The link between food price spikes and political instability (source: UNCTAD)