If you think that the present Ukraine-Russia conflict does not and will not affect you as a business owner or manager, think again! If only because the conflict involves Russia, as the largest country in the world by way of its sheer geographical size that covers eleven (11) time zones, and, is presently home to the sixth largest population in the world, we will all be affected to some degree.
Then of course, when one considers that Russia is also home to some of the largest oil and gas reserves in the world, and that both Russia and Ukraine account for at least 30 percent of global wheat productions, everyone’s pocket will likely feel the pinch. Therefore, when sanctions for whatever their intended purpose are imposed, especially those with economic and financial effects are enacted, business owners around the world will be adversely affected.
So, here are four (4) ways that sanctions can hurt your business:
1. Trade is affected: Your ability to trade with your suppliers easily and readily in a country that is subject to sanctions, is adversely affected. This can also be applicable where your country is on the receiving end of such sanctions. Sometimes, the enforcement of such sanctions can happen gradually, or, in the case of this present conflict, it can be enforced with immediate effect. Except for humanitarian and medical reasons, you are no longer able to import from or export to them. Your shipping routes by air, sea or land may be boycotted, or cancelled altogether, resulting in less avenues for your business to grow and flourish.
2. Finances are crippled: Engaging in routine financial transactions that would ordinarily be conducted internationally through commercial banks, regardless of country, such as wire transfers, deposits and withdrawals by way of cheque or cash, are now under heavy scrutiny and limit . Likewise, you and your business associates might no longer be able to trade in currencies that are traditionally negotiable worldwide, such as the US dollar, Canadian dollar, UK pounds sterling, and the Euro dollar.
3. Global economic paralysis occurs: Gone are the days when the affairs of one country, or even two in another part of the world did not affect the lives of other countries, even those far-removed from the conflict. Inflation in one country, causes the cost of importing as well as exporting its raw material, and even its refined material to soar to extraordinary levels. In the case of this present conflict, don’t be too surprised if the cost of fuel, bread, and shipping goods “suddenly” increases.
4. A domino effect follows: Depending on the scope and depth of the economic and financial sanctions, it becomes almost taboo to engage in any sort of business with a sanctioned country, from boycotts of your own business, to receiving (global) negative publicity on social media, it becomes almost too stressful and financially-imprudent to engage in any further trade with sanctioned countries and their business entities.
Keywords: LinkedIn Local Caribbean, trade, finances, economy, domino effect