Putin’s War Could Save the Global Economic Order

Russia’s invasion of Ukraine could be seen as a catastrophe for the world economy. Surging oil and gas prices are feeding inflation that in many countries was already at the highest levels in four decades. Financial markets have plummeted, erasing trillions of dollars in wealth. Western sanctions have crossed what used to be redlines, including blocking Russia from accessing more than $300 billion of its own central bank reserves. If the world loses access to Russia’s vast deliveries of energy, fertilizer, grain, and industrial metals, the hit on the global economy could become much worse yet.

While the measures have not been enough to persuade Putin to cease his offensive in Ukraine, Western countries have shown in the crisis an extraordinary capacity to shake off decades of economic policy lethargy. This may show the way toward a future economic order: not a U.S.-led system with others often reluctantly following, but a far more active joint management of the global economy. The United States on its own no longer has the capacity or willingness to lead the global economic system without robust support. Preserving the benefits of a well-ordered global economy will demand a cooperative and coordinated effort.

Column by Edward Alden, a columnist at Foreign Policy, a visiting professor at Western Washington University, and a senior fellow at the Council on Foreign Relations.