Russia-Ukraine Crisis: Why Are Poors Bearing The Brunt Of The War?
A demonstrator cries listening to a national anthem as other rallies with Ukrainian national flags in the centre of Kharkiv, Ukraine’s second-largest city (AP Photo/Evgeniy Maloletka)
The world is already feeling the pain of anti-Russia sanctions, export restrictions, soared energy prices, raw material shortage, supply chain disruptions and refugees exodus.
This shows that not only the fighting countries would lose but the whole world is going to face the consequences of the Russian-Ukrainian war.
Economic fallouts are major but other repercussions can not be ignored either.
Also Read: Ukraine War: Understanding the Roots and Cause of the Russia-Ukraine Crisis
Further, the world is sceptical of world trade development in the future when two-way sanctions can be witnessed over trade, people, technology and normal maintenance of relationships between Russia and Ukraine’s supporters including Europe.
Food And Energy Crunch
Ukraine is known as the breadbasket of Europe as 10% of world supplies of wheat comes from Ukraine. Middle Eastern and North African countries like Syria, Lebanon, Yemen, and Tunisia are heavily dependent on Ukrainian wheat. Shortage of wheat can cause a feminine like situation in these countries that can lead to a humanitarian crisis. David Beasley, head of the World Food Programme warns that skyrocketing food prices are causing more people at risk of starvation worldwide, especially women and children.
Rising prices of energy and commodities like wheat add to already poor financial conditions prevailing in countries due to the COVID-19 pandemic.
Russia and Ukraine together contribute 29 per cent of global wheat exports. As a result of war sanctions and supply chain disruptions, global wheat prices have increased by 57 per cent. Further increased oil prices will enhance the fertilizer and transportation costs.
The war is detrimental for the already food-insecure countries. Countries are facing supply chain disruptions due to the COVID-19 pandemic, conflicts and climate change. Recent war fallouts will only make reversals to the years of developmental efforts.
Also Read: Russia Sanctions: How is the Most Sanctioned Nation in World Coping with the Measures?
The World Bank is also concerned about the almost all-time high food prices and consequent food security challenges to the poor and underdeveloped countries. It is most likely that the global economy would face a temporary, if not long-lasting, slowdown in growth.
The International Monetary Fund (IMF) warned that the consequences of war and sanctions on Russia are going to severely impact the global economy and financial markets.
Surging food and energy prices are witnessing these claims of the IMF and the World Bank.
Also Read: Syria: A Growing Humanitarian Crisis Amid the Russia-Ukraine Conflict
The IMF said that poor households are majorly facing these price shocks as food and energy are the major expenses that they have to bear.
Consequently, more escalation in war sanctions could have devastating impacts on poor households.
Gasoline prices have skyrocketed across the globe as a result of the Russia-Ukraine war.
Italian prime minister Mario Draghi said that the EU would need additional spending of about 0.6 per cent of Europe’s budget for spending on defence, climate and energy goals as a consequence of the Ukraine-Russia war.
He further quoted that energy prices have soared high and Europe already has spent an extra €16bn as a consequence.
Health In Crisis
Even primary health, medicine and emergency services are being disrupted on both sides of the contact line. Shortage of medical staff, lack of basic medical equipment and supplies such as insulin and kidney failure treatments are worsening the humanitarian conditions. The situation is specifically alarming in war-torn areas of eastern Ukraine and non-government-controlled areas, reported WHO.
WHO is urging the international community to escalate the aid and support for health services in eastern Ukraine.
Ukraine Refugees Crisis: A Fast Rising Exodus
Refugees fleeing war in neighbouring Ukraine queue at the Medyka border crossing, Poland, Thursday, March 10, 2022.
People are suffering pain, tragic loss of life and property. More than 2.5 million people have already moved to neighbouring countries in Europe.
Dame Barbara Woodward, the British Ambassador to the UN, said the war has caused a “humanitarian catastrophe“.
UN Refugee Agency (UNHCR) claimed that it is the fastest-growing refugee crisis in Europe after the second world war and can reach up to 4 million in the coming few days.
Refugees are fleeing to border countries like Poland, Hungary, Slovakia, Germany, Italy, France, Sweden, Moldova, Romania and others with emotions and stress.
A Dash Of Relief Among Chaos
Source: [Visar Kryeziu/AP Photo] Volunteers give food, drinks, blankets, and diapers to babies, at the border crossing in Poland.
One thing that gives relief is a strong, immediate and open-armed welcome being given to Ukrainian refugees throughout the EU unlike the Syrian refugees just a few years back. It shows the capacity and resilience of the EU to accommodate a huge refugee base within a short period of time as was claimed impossible back in 2015 during the Syrian crisis.
Also Read: Ukraine War Revealing the Double Standards for Refugees
Most of the refugees are women and children who are fleeing and queueing in freezing temperatures from several hours to several days. The Government of Ukraine has banned men between ages 18 to 60 from fleeing the country after the enforcement of martial law.
The tone and attitude of politicians and civilians seem positive and accommodative towards Ukrainian refugees.
Volunteers give food, drinks, blankets, and diapers to babies, at the border crossing in Poland.
The EU unanimously activated the Temporary Protection Directive to provide Ukrainians with the right to work, housing and healthcare from one to three years.
The way Europe is helping in this refugee crisis can be set as a model to follow in other crises as well.
How Much Is Needed To Share Responsibilities
The International Committee of the Red Cross ICRC and the International Federation of the Red Cross and Red Crescent Societies- the world’s largest disaster relief networks appealed for $273 million for the provision of food, water, shelter and healthcare to millions of Ukrainian suffering humanitarian deterioration at home as well as at the places of migration.
International support and aid is a prerequisite to delivering critical life maintenance facilities to those most in need.
Also Read: Palestine-Vs. Ukraine: Stark Western hypocrisy on Palestine and Ukraine
International organizations can identify and rescue the most vulnerable countries to provide their support and aid.
In case of general economic and financial impacts, the central banks around the world need to manage the inflationary trends and their impacts on domestic inflation.
Governments can identify such poor households and provide them support to offset rising living costs.
Countries need policies and strategic interventions to mitigate the price impacts and ensure a continuous supply of grains. They have to plan in advance for their food supplies.
Obviously, countries have to find the means to fund these extra resources besides their national budgets.
It is time for the world to come ahead and share the burden of war-ridden people in crisis.
Shein Exposed – The Dark Side of China’s Fast Fashion Giant
Shein – one of the world’s top fast fashion websites, popular for its cheap and trendy clothing, has enjoyed explosive growth over the past years. Courtesy of thousands of sponsored fashion hauls and cheap laborers, the company is more popular than ever.
But there’s a dark side Shein doesn’t want you to know – the real cost of fast fashion. In this article, we will unveil the reality of how Shien is providing ultra-cheap fashion, the toll it has on the environment, and how it’s shaping today’s mindless consumerism.
Shein – More than a Fast Fashion Brand
Over the years, She-in has gone from being a low-cost Chinese apparel merchant to a global online fashion giant. Its sales skyrocketed from $10 billion in 2020 to over $100 billion in 2022. The biggest Unique Selling Point (USP) of the brand is low-price trendy clothing, majorly catering to Gen Z women.
The company mass produces thousands of products daily in its 6,000 clothing factories across China. According to Rest of World, the brand includes 2,000 to 10,000 new styles each day, a majority of which are copied from other popular brands or small-scale designers.
But behind the glamourous shield of Shein lies the dirty reality about how the company is able to produce so much at low prices. Blue color laborers forced to work 75-hour shifts with very little time off, and mostly under unfit conditions, are at the heart of the company.
Atrocious Working Conditions
Multiple reports and investigations have exposed how the company consistently violates Chinese labor laws. Journalists have uncovered concrete evidence that Shien’s $7 crop tops were made by workers in unsafe workshops working on minimum wage (often without contracts.)
“Inside The Shein Machine,” a Channel 4 documentary, revealed the harsh reality of factory workers through undercover footage. These workers were made to work 17-hour shifts to produce hundreds of garments daily. In one factory, they were paid a base salary of $20 per day, which would be deducted by $14 for every garment with mistakes.
The cheap, readily available fabric of choice from Shein is virgin polyester, a material that is not only highly polluting but also incredibly persistent. Its production process releases three times more carbon than cotton, and unlike biodegradable cotton, polyester never breaks down. This is a devastating reality, and it’s Time for a change.
According to Time, the company releases over 6.3 million tons of CO2 per year. However, Shein is not alone climate culprit here. Across the board, the fashion industry accounts for about 10% of carbon emissions.
Landfills are overwhelmed with a staggering 93 million tons of textile waste annually, much of which is burned and releases harmful pollutants into the atmosphere.
The Impact of “Fashion Haul” Influencing
Social media is filled with influencers packing huge boxes of fashion-forward, cheap polyester clothing. For those unfamiliar, fashion hauls are young social media creators showing off their latest fashion purchase, rating the product, and recommending the right one to their millions of followers. Titled “Summer fashion haul” and “Bought all this under $50 only”, these videos are mostly targeted to GenZ with the aim to spark a desire to buy the displayed look.
Evoking FOMO in the viewers, these hauls play a crucial part in glorifying fast fashion and normalizing shopping in large quantities. A majority of which is disposed of after a few times.
Promoting driven-to-shop psychology, these fashion hauls have become immensely popular with the hashtag #hauls over 13 billion views and #clothinghaul about 1 billion on TikTok. A majority of these hauls are powered by Shien, with the hashtag #sheinhauls 3.8 million views on the platform.
The fashion hauls are Shein’s critical marketing strategy. Their affiliate collaboration with influencers who gets a 10%-20% commission on each purchase is one of the key reasons why the fast fashion website became the giant it is today.
Shein is on a Decline
Shein, the fast-fashion brand known for its cheap and trendy clothing, has seen a meteoric rise in recent years. However, its sales took a sharp turn in 2022 for the first time since the pandemic, with a few reasons behind the drop.
The slowing post-pandemic economy has left shoppers with less disposable income to spend, and persistent accusations of poor clothing quality, worker mistreatment, and unethical business practices may have finally caught up to the brand.
According to Brandwatch, 70% of online conversations about Shein were negative between 2020 and 2023. However, despite these challenges, Shein remains optimistic and reportedly seeks $3 billion to fuel its expansion in 2023.
The Problem is Bigger than Just Shein
Reports of Shein abusing its workers, producing harmful clothing, and worsening the planet have been circling for years. Still, the brand is thriving with more customers than ever.
This sparks the question – Is Shein really the problem?
And we know the answer. Shein, or any fast fashion brand, has transformed the fashion industry because of multifaceted factors, including affordability, convince, emotional connection, and above all, social pressure.
We are contributing to the exploitation of minimum-wage laborers
We see it, we are engaging with it every day on social media, and we are ridden with negative emotions like addiction and guilt. According to ThredUP, one in three Gen Z feels assisted to fast fashion, whereas one in five feels pressured to keep up with the latest fashion trends.
But that’s not what fashion is about. Created as a medium of self-expression and creativity – today, the industry has taken a 180-degree turn. And sadly, it’s no foreseeable end to the trend. However, a huge section of the population is standing up against fast-fashion brands like Shein.
The Need to Adopt Responsible Fashion
The industry is huge, and Shein is not the only culprit. By engaging in the fast fashion trends, we are giving the green light to brands like Shiens to continue labor exploitation and release humongous amounts of toxic chemicals.
But by educating and supporting ethical and truly sustainable fashion brands, we stand a chance to snowball a positive change in the industry. Fortunately, the trend of responsible fashion is already catching on with young shoppers.
Who is Winning the Microchip War: India or China?
The world is running out of computer chips. And due to the unprecedented shortage of electric chips and semiconductors, a new microchip war is brewing between the two largest manufacturers: India & China.
But, who is winning it? Here’s an explainer:
The Semiconductor Crisis: Explained
Semiconductors are used to make integrated circuits. These microchips are the lifeblood of all electronic appliances, from smartphones, laptops, and gaming consoles to supercomputers and modern weapons.
Powering the technological evolution over the last two decades, the demand for semiconductors has skyrocketed. However, the 2020 pandemic halted the chips’ manufacturing, sparking a global semiconductor crisis.
The crisis was so bad that Apple lost 6 billion dollars in revenue, Maruti had to cut down 40% of its production, and Mahindra had to cut down 20% of its production. Due to chip shortages, the auto industry has already lost 100 billion dollars in revenue.
Even though production has resumed, manufacturers are still unable to fill out the shortage caused by COVID.
So, why is there a sudden shortage of semiconductors and their impact on different industries?
The Rush of people with Electronic Gadgets
The first reason for the shortage is that the industry had already been growing rapidly and was already on the brink of shortage. According to the semiconductor industry association, more than 100 billion integration circuits are used daily worldwide.
The market is so huge that the industry’s biggest players, including Intel, Micron, Nvidia, and Qualcomm, can’t keep up with the demand, given the enormous size of the market.
The Microchip War & Impact of Covid-19
Lockdown-induced online work dramatically increased demand for electronic devices. But with the manufacturing and transportation services primarily halted, demands outstripped supply.
Another the reason why the shortage is so difficult to recover is that manufacturing a microchip typically takes more than four months. Additionally, microchip manufacturers need giant factories with dust-free rooms, multi-million-dollar machines, molten tin, and lasers.
Since manufacturing cannot be increased on such short notice, the wait times for chips increased alarmingly. The situation has worsened so severely that the waiting time spiked from 11.8 weeks in September 2019 to 21 weeks in August 2021.
Consequently, the market value of semiconductors grew over 20% ($600 billion) in 2021.
Hence, the radical difference in supply and demand has turned the table, and this is why companies from various areas across the world from various sectors have started facing production issues.
The four major industries that have furiously faced the heat of crisis are auto, LED lighting, consumer electronics, and the appliance industries.
What is the position of India in the semiconductor market?
Despite homing big heads like Intel, Micron, and Samsung housing and R&D centers in India. India doesn’t have a significant chip manufacturing industry.
When looked at India’s semiconductor trade situation, India became the 13th largest importer of semiconductor devices in the world in 2020, with $2.38 billion in semiconductor device imports.
And now comes the story’s climax behind the semiconductor war between India and China.
The terrifying part is that about 68.1% of India’s semiconductors were imported from China in 2020. Followed by 40% in and 26% from Hongkong in 2022.
So, what is India doing to fix the situation and reduce its dependence on China? And How is India indirectly in the position of war with China in the semiconductor industry?
India Vs. China: The Microchip War
The roots of India & China’s microchip war can be traced back to the Quad Summit.
During the quad summit conference held by US president Joe Biden on the 24th of September 2021 debated on how to tackle several aspects of economic challenges that come through different countries’ economic development. And one such aspect was the semiconductor shortage in the world.
Long story short, chip manufacturing is a complex process requiring multiple steps. So if each country sets up five divisions for five different processes, it is both costly and time-consuming.
Because of this, India, Australia, Japan, and the US have chosen to work together to execute only those processes that best suit their strengths while transferring the remaining ones to other nations.
That means the US will design the semiconductor; Japan will provide resources to make semiconductor that is raw materials and chemicals like silicon wafers and ICs. While Australia will come up with an electronic supply chain as it has access to critical materials and advanced mining.
Meanwhile, India has many skilled engineers and laborers for cheap assembling and manufacturing.
So, in the quad summit US, Japan, Australia, and India joined hands to build a robust semiconductor supply chain based on their strength to eliminate their dependence on China, Hongkong, and Taiwan.
Thus India’s INR 76000 cores production incentives program is indirectly threatening Chinas mega semiconductor chip industry.
Will the Microchip Program Really Benefit India?
The US is very well aware of future weapons and is acting smartly to overcome China in supercomputing and AI tech. That’s why the US wants semiconductor technology to be kept away from the hands of China.
Hence in October 2022 US banned all semiconductor exports to China. Alongside baning all the technologies that China can use against the US.
The US does not want China to develop weapons that may use against the US military. Consequently, fostering India to come up with semiconductor manufacturing to cut the wings of China in the field of making chips.
As discussed above, the US is king in designing the chips, but with sanctions on exporting any such technology from the US, China will face heat.
While the US has joined hands in the quad summit to design semiconductors for India, here comes the answer to that incentive program.
Is India Winning the Microchip Chip War?
Over the next two years, the Indian government plans to establish 20 semiconductor plants. To tackle the shortage of semiconductor Government of India has lined -up with attractive incentive support for companies engaged in silicon conductors, photonics, semiconductor packaging, compound semiconductor manufacturing, sensors fabs, and semiconductor design.
Moreover, India is also tying up with Taiwan and encouraging semiconductor companies to manufacture semiconductors in India by providing land at affordable prices for their setup.
India is in an overstated circumstance where it is a semiconductor-importing nation and is about to switch to a semiconductor-exporting nation. Here is some heat in China. And that sparks an unintentional semiconductor war between China and India.
The UK Economy Braces for 2-Year Long Recession: What Went Wrong?
The UK economy is witnessing one of the worst crises in its history. The downfall of the pound, war-infused energy crisis, skyrocketing electricity bills, collapsing stock market, changing Prime ministers, and whatnot?
Nothing has gone in the UK’s favor since the passing of the Queen. And now the country is bracing for a prolonged two-year recession with contracting third quarters.
But what went wrong in the first place? How did this trigger an economic catastrophe in the UK? And can Rishi Sunak save the UK?
Here is a detailed explainer:
UK Economy: An Overview of the Problem
With the political upheaval and the pandemic, the already suffering economy of the UK reached its brim when the Russia-Ukraine war ignited.
In response to Ukraine’s invasion, Britain halted the import of fuel, gas, or coal from Russia since June for the first time in the past 25 years.
As a result, Russia stopped its critical gas pipeline to Europe, thus creating an energy crisis.
All this led to the UK’s economic downfall.
Today, inflation is at an all-time high of 9.9%, a 40-year high. Energy bills are shot up by almost 80%despite capping. Finally, and most importantly, the pound has become one of the worst-performing currencies, with its value dropping by 24% against the dollar.
The Mini Budget Turmoil
With such disruptive environments in the UK, former Prime Minister Liz Truss came up with the mini-budget. The mini-budget baskets a slew of tax changes, including the elimination of the high rate of income tax for the wealthy and the energy subsidies policy platform.
However, the mini-budget backfired and now has snowballed from an energy crisis into debt, housing, currency, and even a banking crisis.
The pointer mentioned in the mini-budget has been so terrifying that it shook the economy of the UK and plunged the London Stock Exchange horribly.
With such an unstable situation inside the UK economy, Truss changed her mind about company taxes after days of adamantly defending her budget and firing finance Minister Kwarteng.
“I still agree with my policies, but I’ve sacked my finance minister because he announced them, and the market didn’t like them.”She said
A Cold and Long Winters Awaits the UK
The three major events that make the incoming winter snug for the UK are:
- First, Russia has entirely cut off gas, which causes the cost of electricity to shoot up by almost 80%.
- Secondly, on top of the existing gas storage, the incoming winter energy consumption is about to hit a new peak from September to December.
- Third, even if Europe had 90% of its Energy storage complete in September 2022, it could take only 90 days for it to reach dangerously low levels.
Long story short, a gas shortage during a peak consumption time, with no storage option, will further increase energy prices. It has already been shot up at extreme levels resulting in high electricity bills that eventually heated inflation and the economy of the UK.
Even though the UK is receiving help from the US and other countries, gas prices are still very high. Hence the cost of production and inflation has hit a record 9.9%.
“It is going to be tough. But protecting the vulnerable – and people’s jobs, mortgages, and bills – will be at the front of our minds as we work to restore stability, confidence, and long-term growth,”British finance minister Jeremy Hunt twitted
Bond Market Crisis with Collapsing Pound
The UK’s property market, pension industry, and overall economy are at risk of recession. The reason behind this is the decline in the price of UK government bonds and the ensuing rise in interest rates.
10-year bond rates in the UK have gone above almost 300%, going from just about 1% to 4.11% in just nine months.
Even though the bonds yield a 4% interest, the currency has depreciated to such an extent that it has become a disaster for foreign investors. As a result, foreign investors are quitting the UK market, further decreasing the demand for the pound.
Such a crisis in the bond market resulted in currency depreciation further, and the sterling slid against the US dollar. Furthermore, during the Ukraine-Russia war, Russia cut off gas supplies, and oversized reliance on imports further surge Euro.
Rishi, the Third Prime Minister in Three Months
After the resignation of Boris Johnson with 27 ministers, the office was handed over to Liz Truss. When Boris left the office, there was a sensation in the UK that it was time for stability and competence.
However, due to poor politics and policies, Liz Truss abruptly resigned from the post of Prime Minister within 45 days. The shortest and most disastrous spell that slung the economy of the UK and crashed the pound forced Liz Truss to step down from the post.
With the resignation of Liz Truss, the reign was entrusted to Rishi Sunak, the third PM of the UK in the last three months. Sunak’s appointment ended another period of political unrest in the UK.
But many analysts and Westminster observers are still of the opinion that there will soon be another crisis. With the opposition Labor Party presently leading in the polls, all opposition parties are pleading for a general election.
Can Rishi Sunak Save UK Economy?
The political unpredictability has led the UK economy into a two-year-long recession. The previous two prime ministers were unqualified to steer the UK economy’s flimsy ship. Hence Rishi has some challenging tasks to do.
Now, everything will depend on how Rishi approaches the challenging work of rescuing the UK economy from disaster, and it will be interesting to watch how he advances.
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