For Ukraine, the human cost (death and displacement) and the cost in infrastructure destroyed by the war, which for NATO is going on for a long time, is enormous.
For the world, in the very short term, it is leaving an important bill for less growth and worsening inflation.
The World Bank has revised its forecasts, placing Latin America and the Caribbean in the worst regional scenario, with the growth remaining four tenths of a point, up to 2.3% in 2022, and 2.2% instead of 2.7% for 2023.
And as for inflation, the year-on-year rate in December 2022 will close at 7%, further reducing purchasing power and household savings.
It does not make calculations or monetary breakdowns but stresses that the bill will not be the same for all countries in the region, those that export gas and oil, metals and grains will pay relatively less, and net importers of fuels and food will pay more.
For the Dominican Republic it forecasts 5% growth in 2022, the second best performance in the region, and the same rate for 2023.
That is to say, in the very short term because of the war our country does not increase general poverty, although the money that consumers use to pay the higher price for gasoline, diesel, LPG and electricity despite the Government subsidy, is money that they need to consume other goods and services, money that will not stay in the country, it will escape to oil exporting countries.
You can read: The zero rate reduces the price of food.
Some readers may wonder why, if the conflict is taking place thousands of miles away, the effects of the war impact the region as advanced by the World Bank.
The answer is that, because of the cold war, until the beginning of the nineties of the last century, the fragmentation of production and trade took place within regional blocks, and since that date it is global, products and services that are generated in different countries are imported and exported by one of them, increasing the global added value and the economic progress of the peoples that economists measure through the evolution of the real GDP per capita.
Ours, for example, between 1992 and 2021 will grow at an annual rate of 4%, double the average increase (2.1%) between 1950 and 1991.
The difference is explained by the change of model, from regionalization and restrictions to globalization and trade liberalization, with price stability, which improved consumers’ purchasing power, or in other words, they obtained higher real incomes.
Since nobody knows when and how the war will end, and since it is very likely that a second version of the cold war will emerge, with the division of the world into geopolitical blocks and a return to the model of regional fragmentation of production and trade, it is advisable that in our country the Government continues to manage the crisis of shortages and high international prices in the way it has been doing, preventing the temperature in the streets from rising, ceasing to charge taxes to decouple the price of gasoline, diesel, LPG and electricity from the price of oil, and food without tariffs.