• About Us
      Asia’s 1 st LEED Platinum Rated Campus

      Asia’s 1st LEED Platinum Rated Campus

      About Us

      • Chairman's Message
      • Vice Chairman & CEO
      • Dean's Message
      • Governing Council
      • Business Advisory Council
      • Academic Advisory Council
      • Work With Us
      • Mandatory Disclosure
      • Anti-Ragging Notice

      TERM ZERO

      Media

      • News
      • Events
      • In Media
      • Media Kit

      Rankings

      Accreditations

      NIRF

      Campus

      Blog

      Annual Events

      • Convocation
      • TEDxGLIMChennai
      • L'Attitude
      • Digital Symposium
      • Sangamitra
      • Annual Alumni Meet
      • SWIM
      • IEC
      • Human Capital Management
  • Programs
      Transform and Lead

      Transform and Lead

      Full Time Programs

      PGPM

      One Year MBA for professionals with work experience

      Learn More Apply Now

      PGDM

      Two Year MBA for professionals with 0-2 years of work experience

      Learn More Apply Now

      EXECUTIVE EDUCATION

      Partner with us for customized learning solutions for your organisation

      Learn More

      Corporate Programs

      PGXPM

      Executive program for Mid & Senior Level working professionals

      Learn More Apply Now APP. Deadline: 30th August, 2020

      PGPM Flex

      Weekend management program for young working professionals

      Learn More Apply Now APP. Deadline: 30th August, 2020

      MBA in Business Analytics

      Family Enterprises Management

  • Faculty & Research
      Ranked 6th

      Ranked 6 th

      by NIRF ranking in teaching and learning among all B-Schools in the country

      Faculty

      • Full Time Faculty
      • Visiting Faculty
      • Adjunct Faculty

      Research

      • Faculty Editors
      • Papers & Journal Publications
      • Case Studies & Books
      • Conference Proceedings

      Centers of Excellence

      • Centre For Excellence in Retail Management
      • Great Lakes Centre For Management Research
      • Kotler - Srinivasan Centre for Research in Marketing
      • Centre for Excellence in Business Analytics and Business Intelligence
      • CET
      • Union Bank Centre for Banking Excellence

      Conferences

      • NASMEI
      • Financial Conference
  • Recruiters & Companies

      “Great Location for Talent. We are happy to continue visiting and having budding professionals join us and grow their careers.”

      Anil Visal

      Partner - Deloitte India

      Campus Recruitment

      • Recruitment Process
      • PGDM Class Profile 2018-20
      • PGPM Class Profile 2019-20
      • Past Recuiters
      • Student Achievements
      • Recruiters Speak

      Internships

      • Recruitment Process
      • PGDM Class Profile 2019-21
      • Live Projects

      Placement Reports

      • PGPM
      • PGDM
      • Internship Report

      Leadership Series

      • Titans Speak
      • Industry Lecture Series
      • Thought Leader Series

      Talent Listings

  • Alumni

The Ukraine economic and political imbroglio and its impact on the Global Economy By Dr. Bobby Srinivasan and Mr. Chandan Palaksha

March 11, 2014 | Posted by bobbysrinivasan << back to blog

There are events in the global economic and political history, which look initially small and innocuous suddenly grow up to become an issue of an international nature. The current situation in Ukraine, a former USSR country, starting as a small strife among the ethnic group, is threatening to become an international issue which will affect the global trade and leading to what appears as the beginning of new cold war between US, Eurozone and Russia. Let us now turn our attention to some basic data about Ukraine.

  • Land Area: 603700sq km of which 55% is cultivated (Indian Land area 1.25million Sq. km)
  • Population: 458 million (end-2009)
  • The major cities are: Kiev, Kharkiv, Donetsk, Odessa and Dnipropetrovsk
  • Language Spoken: Official Language: Ukrainian

Other Languages: Russian in Ukraine

To quell the internal strife Russia “the big brother” moved its troops to Crimea, an area in Ukraine dominated by people who speak the Russian language claiming that they are defending the rights of ethnic Russians .This is direct intervention by a country (Russia) intervening in the local affairs of another country (Ukraine) .

There has been an exchange of harsh words between Russia and USA. To quote, Putin on the intervention by the west “They sit across the Pond. Sometimes it seems they feel like they are in a lab and running experiments on the rats without understanding the consequences……

Obama on Russia’s actions

I know Mr. Putin seems to have a different set of interpretations of International laws but I don’t think that is fooling any one.

The US has taken the issue very seriously and threatened to isolate Russia politically, economically and diplomatically unless it withdrew the forces that have seized control of Crimea. The US strongly believes that the military action of Russia has violated international Law.

The Russian invasion had a dramatic impact on its local financial markets. Their currency rouble already one of worse performing currencies fell nearly 3 percent to a record low of 36.90 to a dollar .So for the currency has depreciated11 percent this year against the dollar and inflation rate is steadily moving up .Russia had devalued its currency twice before in 1997-98 and 2008-09.

The Russian equity index MICEX has already dropped from 1500 to 1300 .The price of selected commodities namely the wheat prices jumped up 4.7 percent while the Brent crude oil rose 2.1percent and natural gas futures jumped 10percent .Market analysts believe that Russia’s invasion could exacerbate capital flight thus creating a liquidity crisis.

Russian economic growth has faltered and the economists expect the current financial year’s GDP to be around 1 percent. The question to ask is whether Russia is creating this tension to push up the global oil prices which is good for them. In fact crude prices have moved up significantly in the meanwhile.

The situation in Ukraine is alarming. The country is on the verge of bankruptcy. Their foreign reserves are hardly enough to sustain two months of import. They carry a foreign exchange liability of 73 billion dollars while the reserves stand at around 15billinon$ Ukraine wants 35 billion dollars loan to be spread over next two years including an urgent loan in the next 2 weeks .But the international community wants to wait till May 2014 when the new president will be elected to office .

Its former president Viktor Yanukovych who was literally kicked out of office ran away with an estimated loot of 12billion dollars. He is hiding somewhere. The document released by Ukraine government shows that he has planned a crackdown in Kiev with 2500 troops ordered in to the capital for an antiterrorist operation .The leaked documents show how close the city came to a blood bath.

Where do we go from here? Russia is the third largest trading partner with EU with the turnover in goods and services nearing 340 billion Euro .If the EU decides on a trade embargo it may have a devastating impact on the Russian economy .For example oil and gas account for 70 percent of Russia’s exports and 50 percent of its government revenues.

Let us hope that the stalemate does not lead to a cold war. if it happens then we should be prepared for a major global economic slowdown with all kinds of trade embargos. However the EU must send a strong message telling the Russians that business is not as usual.

Time will tell as to how this situation will unfold. But one thing is certain. Russia has always used this kind of tension to push up the global energy prices.

<< back to blog

Programs

PGPM - One Year MBA for professionals with 2+ years work experience

Learn More >

PGDM - Two Year MBA for graduates with 0-2 years work experience

Learn More >

Events

Union Bank Finance Conference
Dec 17, 2020

Networking with Champions
Nov 08, 2020

Harry Kraemer on Performance with A Purpose
Oct 08, 2020
Read more

Successful Women in Management (SWIM) Lecture Series
July 05, 2020
Read more

The Great Circle Alumni Talk Series
July 04, 2020
Read more

  • About Us
  • Programs
  • Faculty & Research
  • Recruiters & Companies
  • Alumni
  • Blog
  • Contact Us