The issue was discussed at a conference organised by ASCAME and the Alexandria Chamber of Commerce in Egypt

The impact of the Russia-Ukraine war on the Mediterranean region: the socio-economic consequences

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The Association of Chambers of Commerce and Industry of the Mediterranean (ASCAME), with the collaboration of the Alexandria Chamber of Commerce in Egypt, held a hybrid conference in Cairo last week on the impact of the Russia-Ukraine war on the Mediterranean region. As a result of the event, ASCAME and the Alexandria Chamber have launched a working paper analysing the specific consequences of the current socio-economic crisis, caused by both the Russia-Ukraine conflict and the COVID-19 pandemic.

The event brought together experts, business leaders, multipliers and public representatives to establish an overview of the impact of the crisis on global supply chains, with a particular focus on product availability and price inflation in the Mediterranean.

A conflict with global impact

The paper makes clear that the volatility of the situation goes beyond borders. After two years of uncertainty caused by the pandemic, the war between Russia and Ukraine has added a new layer of vulnerability to an already fragile system. Securing basic goods and stable prices has become the most important global challenge.
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In this regard, the data provided in the paper on specific food and energy supplies are particularly significant, as they reflect the impact that fear can have on market trends. Concerns about the consequences of the Russian-Ukrainian war on farmers and producers led to a 6% increase in wheat prices on the first day of the conflict alone, and the curve has steepened since then, to the point where wheat prices recently reached their highest levels since mid-2008. There has also been a rise in oil and gas prices, an increase in transport and insurance costs, trade instability and disruption of traffic in Russian and Ukrainian ports, as well as restrictions on bank transfers to and from Russia. In addition, global economic conditions have worsened, as the effects of the recession have been compounded by a sharp decline in economic activity, reduced employment and declining shipping and productivity, leading to a crisis in supply chains.

However, the paper also points to a potential silver lining in the inflation of certain commodities, such as fuel: it will force governments around the world to find alternatives that ensure energy security, thus putting more sustainable options on the table that fit with the UN's 2030 Agenda.

ASCAME and the Alexandria Chamber of Commerce conclude that the damage caused by COVID-19 and the Russian-Ukrainian war cannot be reversed. It may take some time for the global economic system to regain its equilibrium, so it is crucial to establish cohesive strategies that take into account regional particularities.

Link to the full paper:

https://www.ascame.org/wp-content/uploads/2022/04/COVID-19-and-the-Russianinvasion-of-Ukraine-2.pdf

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