Olivia White, Kevin Buehler, Sven Smit, Ezra Greenberg, Ritesh Jain, Guillaume Dagorret, and Christiana Hollis
Russia’s war in Ukraine grinds on. In this update, we map the latest social and economic consequences.
Russia’s war in Ukraine is an ongoing tragedy, destroying lives and livelihoods in Ukraine and altering economic patterns worldwide. In May 2022, we set out an initial analysis of 12 disruptions that the war could unleash. With the passage of time, it seems increasingly likely that the war, coming so soon after a global pandemic, could presage a new economic era. We have been here before: today’s shocks are reminiscent of the immediate aftermath of World War II (1944–46), the oil crisis (1971–73), and the breakup of the Soviet Union (1989–92). Each of those events changed the global landscape with the sudden release of powerful underlying forces that had been building up around a fault line over time. Each ushered in a new era.
To understand the shape of the era now unfolding, we have tracked the evolution of the war’s disruptions since May 2022. At that time, some disruptions were already well under way—notably the humanitarian crisis that followed immediately from the invasion. As we highlighted, others were less predictable but worth watching—for example, we noted that the direct impact of the war on financial systems had so far been limited, but that risks from wider ripple effects might materialize.
In this update, we look at what’s happened in the 16 months since the invasion. As recent events in Ukraine highlight, the ultimate outcome remains profoundly uncertain. However, we find five disruptions with clear effects that may endure: the humanitarian crisis, energy source diversification, defense spending increases, cyber as a stage for conflict, and corporations’ pull-back from Russia.
Three other disruptions have eased, as connections in our global system, together with cooling of demand, buffered their effects. These include spikes in prices and supply disruptions for food, metals, and minerals, which have now dissipated.
Of course, in the past year, forces beyond the war in Ukraine have also roiled the system in compounding, intertwined ways: the steady rise of interest rates, China’s lockdown and reopening, severe weather, and broader geopolitical tensions. All are contributing additional uncertainty. These forces have become the most important drivers of three more disruptions we noted in May 2022—most prominently, the burden carried by the poorest people, a splintering of tech standards, and financial-system instability.
Ongoing and persistent disruption
The war’s impact has persisted across several spheres, from the humanitarian crisis to energy market shifts. Although some of the conflict’s long-term outcomes remain unclear, these once-emerging dynamics have begun to solidify.
The humanitarian crisis has moved past border countries
In May 2022, shortly after the Russian invasion, roughly 14 million Ukrainians fled their homes, to either a new country or another part of Ukraine. One year later, that number has dropped to about 11.8 million people. It’s a vast number—but just one dimension of a global phenomenon of people seeking asylum.
Many of those who initially found refuge elsewhere in Ukraine appear to have moved on. The number of internally displaced people in Ukraine decreased from 7.7 million in May 2022 to 5.4 million in June 2023, while the number of Ukrainian refugees abroad remained broadly stable (from 6.2 million in May 2022 to 6.4 million in June 2023).
Refugees are pushing past the first border they encountered and moving to more distant countries. For instance, Poland admitted three million refugees in the first waves of emigration; about one million remain. Russia is an exception to this pattern. The number of refugees in Russia has doubled since a year ago; Russia now houses more refugees than any other country, though not all have gone voluntarily.1
All told, 58 percent of the 6.4 million refugees abroad are now living somewhere beyond Ukraine’s neighboring countries. Germany has taken in more than one million; Czech Republic, about 342,000; the United States, about 300,000; Canada, about 235,000; the United Kingdom, about 203,000; Spain, about 183,000; and Italy, about 182,000.
As the map shows, many refugees have moved to some of Europe’s poorer countries. For example, Romania now has about 135,000 refugees, and Slovakia about 102,000. In a few cases, such as that of Estonia, Bulgaria, and Poland, these influxes represent additions of between 2 and 4 percent or more to the population, potentially straining the social safety net.
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