War in Ukraine Lives and livelihoods, lost and disrupted Report

— Financial-system ripple effects will occur. The
disruption of sanctioned financial flows has
the potential to ripple through the banking
system and financial markets, with significant
repercussions for affected bondholders, lenders,
aircraft lessors, derivatives counterparties,
and investors. There remains a risk of contagion
with second- and third-order effects across
the globe.
— Defense investments are being stepped up. The
show of unity and economic sanctions by North
Atlantic Treaty Organization (NATO) countries,
the European Union, and other European
countries could drive a greater focus on defense
resilience. France and Germany have both
announced significant increases in defense
spending. In early March 2022, the US Congress
approved a $42 billion increase in America’s
defense budget.
— Cyber is a stage for conflict. Countries and
companies have for years been concerned about
the increasing frequency and sophistication of
state-supported cyberattacks. Most concerning
is the shift from ransomware and extortion to
direct destruction. It was a major topic at the
meeting between US president Joe Biden and
Russia president Vladimir Putin in Geneva in
June 2021. It is highly likely that these attacks
will further intensify, testing the resilience of
cybersecurity systems.
— Corporate actors are taking a stand. This war
has galvanized a strong global response against
the invasion. Many corporations and other
nonstate entities have restricted their activities
beyond the formal requirements of sanctions to
distance themselves from Russia and its actions.
— Volatility, volatility, volatility. The war in
Ukraine joins the already crowded timeline
of 21st-century disruptions, with disparate
origins and complex consequences. We see
many business leaders trying to move their
organizations from ad hoc reactions to each
disruption to a foundation of greater resilience,
staying alert to what is over the horizon
and building capabilities to continually
manage uncertainty.
This list covers only the most prominent vectors of
disruption at this early stage of the Ukraine crisis.
While there is a lot of uncertainty around how each
of these will play out, many of them will likely matter
a great deal to lives and livelihoods worldwide, albeit
to very different extents, depending on geography
and sector.
War’s impact on livelihoods: Framing
potential scenarios
We have learned from conflicts around the world
that livelihoods adjacent to and sometimes far from
the conflict zone can also be put at risk. In part, the
risk arises because of inadequate attention paid
to people whose economic well-being is already
precarious; in part because of the inevitable knockon
effects in a highly connected world.
In framing scenarios for how the war will potentially
affect livelihoods outside the conflict zone, we
draw upon a wide range of expertise. 1 We see two
critical dimensions.
1
This framework considers perspectives from the Atlantic Council, the Council on Foreign Relations, the German Marshall Fund of the United
States, Oxford Economics, and leading geopolitical experts.
4 War in Ukraine: Lives and livelihoods, lost and disrupted