The head of BlackRock, the world’s largest asset manager, said the Russian invasion of Ukraine ended globalization as we know it.
The company’s CEO, Larry Fink, said in a statement:Russia’s secession on the global economy” in the wake of its attack on Ukraine prompted governments and companies to consider their dependence on other countries.
He added, “The Russian invasion of Ukraine has put an end to the globalization that we have witnessed over the past three decades.”
The CEO, whose company manages $10 trillion in assets, predicted that Russia’s isolation “will prompt companies and governments around the world to reassess their dependencies and re-analyze their manufacturing and assembly effects.”
But he said some countries could benefit from focusing on building their local industries, as companies that are local or “close to the shore” of their operations. He pointed out that the repercussions of the Corona pandemic strongly encouraged local industries and production.
Early in the pandemic, countries struggled to secure much-needed personal protective equipment made in China. And when economies reopened – and demand increased – supply chain bottlenecks helped push inflation to levels not seen in decades. The shortage of semiconductor chips, in particular, has hit the industries sector over the past year, and the crisis has spread from automakers to technology companies.
Currently, Russia’s attack on Ukraine, followed by swift Western sanctions and companies’ exit from the Russian market, has disrupted international export markets.
The price of global benchmark Brent crude rose above $139 a barrel in early March, as buyers fear supply shocks, despite oil’s decline since then.
“Energy security has joined the energy transition as a top global priority,” Fink said. While coal consumption is expected to increase over the next year, as Europe and Asia try to distance themselves from Russian oil and gas, higher energy prices are likely to make renewables more competitive.
“In the long term, I believe that recent events will actually accelerate the shift toward clean energy sources in many parts of the world,” Fink wrote.