Five ways the world might change after Russia’s war on Ukraine

Here are five ways the world might change after Russia’s war on Ukraine

Lesson summary

Hi there everyone, I’m Jeff and this is Plain English lesson number 452. You can find the full lesson at PlainEnglish.com/452.

We prepare these lessons in advance, so I can’t talk about the very latest to have happened in Ukraine. But I think we can talk about five things in the world that might change as a result of this war, however it ends. And those five things are the topic of today’s lesson.

In the second half of the lesson, I’ll show you how to use the English expression, “set your sights on” something. And we have a quote of the week. Let’s get started.

5 changes to watch after the war

Russia’s air of invincibility

Let’s start with Russia’s image in the world. Russia has a massive army, a large population, natural resources, and a stockpile of nuclear weapons. What’s more , the Russian military had a track record. In 2008, it occupied parts of the Republic of Georgia, and the world barely lifted a finger in opposition. Then, Russia snapped off a piece of Ukraine in 2014, again without repercussions. The Russian government shot down a civilian airplane over Ukraine’s airspace. It poisoned political opponents in the U.K. Russia got away with it all. Next, it set its sights on Ukraine.

Whatever the eventual outcome of the war, Russia’s air of invincibility has been shattered. The first week didn’t go well. Photos of destroyed Russian equipment circulated around the world on social media. Ukraine scrambled up an army of civilians and soldiers, who held the major cities. Financial sanctions were strong. Western governments were sending help. Russian casualties started mounting.

The war will have many terrible consequences. Having failed to topple the government in the first weeks of war, Russia turned to bombing maternity wards and evacuation routes. But it is no longer feared like it once was.

Scrambling of supply chains

The second change has to do with supply chains. In the last 20 or 30 years, companies have sought to produce products where it made the most economic sense. That’s why supply chains have gotten so complicated: the complexity makes economic sense. But conducting business worldwide just got a lot riskier.

Many companies will begin looking at how they make their products and they’ll be looking to produce more of them, in more stable countries. Governments will help them along. This is already happening with microchips. A large percentage of semiconductors are made in Taiwan, which, incidentally, has its own risks. China has claimed Taiwan as part of its own territory.

Coaxed on by the U.S. government, Intel announced a major microchip plant in the state of Ohio. The European Commission is allocating 11 billion euros to help make chips in Europe. The same might happen with medical devices.

Manufacturers can expect to try to make more of their goods inside their home markets, or at least nearby. This can help hollowed-out manufacturing regions like the Midwest in the U.S. It can also help markets that are adjacent to big economies, like Mexico and eastern Europe. But overall, the reduction in trade and the reduction in trust will make the whole world economically worse off.

Alternate payment systems

Soon after Russia’s invasion, western countries banded together to release a package of sanctions —basically, restrictions on how Russia and Russian entities could interact with the world financial system. These sanctions were a body blow to the Russian economy.

You have to believe that the rest world’s autocrats took notice. A lot of smaller countries are not politically aligned with the west, but they use western financial systems anyway. Nicaragua, Turkmenistan and Venezuela come to mind. They probably never thought their whole economies could be ruined by financial sanctions. But now, they’re probably looking nervously on at Russia’s isolation and wondering if the same thing could happen to them someday.

As it happens, China is developing its own payments system. It even has a competing version of SWIFT, the bank-to-bank messaging system. China would love for more of the world’s transactions to be in yuan rather than dollars or euros. Unlike Europe or the U.S., China doesn’t get hung up on things like human rights or invasions.

The crypto world, too, is salivating over the opportunity to provide an alternative to the existing financial infrastructure. Even before the war, El Salvador planned its own crypto route around western financial sanctions , as you learned in Lesson 406.

Europe’s wake-up call

Here’s one more: On defense, Europe has finally woken up from its slumber. The European Union is, at its heart, a peace project. The founders believed that countries linked together by trade and politics would be less likely to fight each other. And it has worked; Europe has enjoyed peace for three quarters of a century.

But the problem is, the rest of the world is not playing along. The economic and diplomatic overtures to Russia have not worked, and Europe has found its defenses woefully unprepared. Russia’s naked aggression in Ukraine may be the jolt European leaders need to get serious about their own defense. Ukraine shares a border with four European Union countries—Poland, Hungary, Slovakia, and Romania. Russia could be coming for the E.U. next.

France’s Emmanuel Macron has repeatedly said that Europe should have a common defense policy so that it’s not as reliant on the U.S. for its defense. It was unthinkable weeks ago. Now, with Germany’s recent pivot , it’s a real possibility.

So long, Londongrad?

The term “Londongrad” refers to the warm welcome that London has given Russian oligarchs—and not just oligarchs, wealthy people from around the world who may have made their money in unsavory ways. London has offered them a safe place to park their wealth, incorporate their businesses, and clean up their reputations. With a small—and for them it is small—2 million pound investment, foreign tycoons could buy official U.K. residency. From there, it was a few short steps to a Western lifestyle and a more-or-less respectable reputation.

Roman Abramovich is a perfect example. He is the Russian billionaire owner of the Chelsea football club and he’s learning that Britain is having a change of heart . In the second week of the war, he announced he would be putting his stake in Chelsea up for sale, and he’d use the proceeds to help the “victims” of the war. He didn’t specify whether those “victims” would be Russian or Ukrainian.

But on March 11, the U.K. sanctioned him. His stake in Chelsea was therefore frozen; it’s now illegal for British businesses to do business with him. Sponsors, merchandise sales, ticket sales were all frozen. Oligarchs are smart; many of them have stashed their wealth out of the reach of western sanctions. But this could mark the end of Londongrad, or Britain’s acceptance of dirty money from abroad.

A new uncertain world

We could be watching a complete re-ordering of how the world works. All these oil companies abandoning Russia , just Russia disconnecting from the world economy. And then everyone scrambling to figure out where they’ll get their energy from, their food from, if it can’t come from Russia any longer.

There’s never been a time of total peace in the world, but the last 30 years have been relatively safe and secure and prosperous. And that run might be coming to an end. We might be going into another paranoid, polarized era like the Cold War.