How did we get so far?
For about 40 years, we have been convinced that the global exchange of the trades, the economic developments and the vertical economic model applied on a significant scale would prosper all the countries worldwide. ACS – ASOMI College of Sciences is concerned about social matters and brings this article to you in order to inform our readers about the current commodities crisis.
The constant economic growth and mass production would have raised the lives of billions of people, including the inhabitants of the world’s poorest nations. This theory’s origin is narrowing the gap between the areas of the world that were (or still are) considered wellness states and the less well-off third-world countries.
But let’s concentrate on what happened, beyond the promise. The truth is that natural resources were being exploited without thought of consequences. Moreover, the constant production has led human beings into a circle of dependency on the goods produced on a mass level, and now most of us do not know – or even realise – how to end it.
But what harm have a vertical economy and the consequent mass consumption made? Well, first of all, the third-world countries did not become more prosperous. Or, to be more precise, the wealth went into the hands of those who had – or still have – the fortune to own the establishments of natural goods.
The environmental crisis.
The problem, however, is that not all primary goods from our Planet are renewable. So, besides the wind and sunlight – just think about these massive modern wind turbines or solar panels – there are not many other resources for Mother Nature to offer that we could reuse.
The environmental crisis caused by the exploitation of our Planet and the disrespect for the environment has caused floods, drought and extreme temperatures that do not allow the crops to be as high as they used to be and therefore are the major causes of the current commodities’ crisis.
This situation has, inevitably, led to a crisis. And this is the crisis of the commodities we are talking about. But, of course, there are further reasons besides the men-caused factors that led to this problem, such as the mass production or the vertical produce-use-throwaway system.
The latter is also caused by humans, in case you were doubtful. In other words, the commodities crisis is caused by the climate crisis. And also wars that are going on on the entire Planet. Besides, of course, the non-environmentally friendly acts and lifestyle are worsening the overall situation. Anyhow, let us clear some above-mentioned points out for good.
To be clear, and as if the climate crisis wasn’t enough, two sudden events influenced the commodities sector to the point of no return.
The Covid 19 pandemics.
In the first place, the COVID-19 pandemics caused a great crisis all around the world. It forced a lot of venues to close or lessen their expenses and make severe cuts to their business activities. Some sectors suffered, of course, more damage than others. Still, the majority of the countries did not even make it in time to recover from the crisis that the pandemics caused when another disturbing factor was at their doorstep: the war in Ukraine.
The war in Ukraine
The financial harm caused by the war will be long-lasting. It is not only about Ukraine but also connected to the commodities sector since most of the gas consumption in Europe comes from Russia, and the relations between the two and the European Union are not as friendly as before. Besides, Ukraine produces tons and tons of gain that is exported outside the European Union, for instance, to North Africa.
The war between Russia and Ukraine influences the exchange, generation and utilisation of goods and services. The war has conveyed the biggest commodity-price stun we’ve experienced since the 1970s. It’ll likely shave an entire rate point off worldwide development in 2022.
This war’s influence on the rest of the world will most probably keep the prices high and cause inflation on a significant scale that may keep costs increased for a long time.
In other words.
In a few words, the environmental crisis caused by the deployment of natural foods and century-long disrespect for the environment is the leading causes of the commodities crisis. And, as if the latter two were not enough and, considering that the world didn’t even recover from the economic damages caused by COVID-19 in time, the Russian-Ukrainian war hit the commodities sector once again by causing a crisis that is bigger than ever before.