I’m devastated for innocent lives lost during this war and millions of refugees trying to cobble together a new life. The point of this post is not to provide keen insight into what’s next – I’m not an economist or an expert on geopolitics. The point is to spotlight a handful of encouraging observations amid an overwhelmingly dark situation.
1. The willingness to fight for democracy exists – and it is immeasurably strong.
First and foremost, I’m in awe of the Ukrainian people. Our daily political and cultural squabbles, relentlessly magnified through social media and 24-hour news channels, have never seemed so minor. Mask or no mask? 21% or 28% corporate tax rates? Kanye or Pete Davidson? For every topic, we’re either starkly divided or casually indifferent. But suddenly we are faced with the reality that none of it matters if we don’t have our freedom. For Ukraine, there is no division or indifference. There is unified conviction in what is right and a moving willingness to die for it.
2. The potency of capital markets as a weapon.
Russia anticipated and attempted to insulate itself from retaliatory sanctions long before it invaded Ukraine. Among other measures, they stockpiled over $630 billion in currency reserves, equivalent to a third of their economy. This stockpile would be used to prop up the Ruble once sanctions hit. As evidenced below, it did not work:
The U.S. and our allies shut off the Russian central bank’s access to these funds, making Russia powerless to support its currency.
The global financial system has gotten infinitely more complex and interconnected in the last two decades. Weaponizing it to deter humanitarian atrocities is proving more effective than ever. Dictators, autocrats, and tyrants should take note.
3. A renewed willingness in Europe to spend on defense and work cooperatively
In 2006, NATO members agreed to commit a minimum of 2% of GDP to defense spending to ensure the Alliance’s military readiness. Since then, most members have consistently fallen short of that target, with the U.S. often making up for the difference.
The tide is turning.
From Politico: In a historic shift, Germany ramps up defense spending due to Russia’s Ukraine war. Germany is even considering codifying this threshold in the country’s constitution. I don’t think they will be alone in taking this step.
We have also seen strong support of Ukraine throughout Western Europe. Countries that don’t always see eye-to-eye are cooperating. The European Union has been galvanized and decisive in its response. I’m hopeful that is a sign of things to come.
4. Ending Europe’s dependence on Russian energy
Russia being a crucial supplier of energy for the rest of Europe has never been ideal. To a much lesser extent, the U.S. imports Russian oil, too. We’re now experiencing, clearer than ever, the consequences of depending on unstable autocrats for energy.
As the saying goes, “necessity is the mother of invention.”
Two years ago, humanity’s back was against the wall trying to devise a vaccine in record time. Fewer than nine months later, life-saving vaccines were administered to our most vulnerable citizens. As I’ve written before, the ingenuity and resilience of the human spirit are undefeated. Hopefully we see similar technological breakthroughs to end energy dependence on Russia and other bad actors.
I’m hesitant to call these “silver linings” because this war is abjectly horrifying. But the Ukrainian people have proven to be tremendously brave fighting for their freedom. No matter what happens, their fight is not in vain.
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