How Russia’s Invasion of Ukraine Might Usher in a New Era for Globalization
By John Elsasser
Companies across all sectors of the global economy withdrew from Russia at unprecedented speed after its unprovoked invasion of Ukraine on Feb. 24.
“In 48 hours, companies were pulling out and rethinking the post-war world,” Witold Henisz, professor of management at The Wharton School, University of Pennsylvania, told CNBC. “This is a fundamental break.”
A dean at the Yale School of Management, Jeffrey Sonnenfeld, created a running list that has become a definitive account of business departures from Russia. Companies such as BP and ExxonMobil abandoning multibillion-dollar oil-and-gas projects garnered Sonnenfeld’s attention.
“The oil companies acted with such moral outrage that you have to do a triple take,” he told The New Yorker. “[Y]ou don’t usually see them on the leading edge of social-change movements. They also have such enormous stakes that it wasn’t just perfunctory.”
Other thought leaders CNBC spoke with said it’s too soon to conclude if a broader de-globalization trend that picked up momentum during the pandemic is accelerating.
Jeffrey Frankel, expert on globalization at Harvard University and former White House Council of Economic Advisers member, said, “My best judgment is that the major events... will not further set back globalization. Russia will become substantially cut off, but Russia is a very small share of the global economy.”
Gary Hufbauer, a fellow at the Peterson Institute for International Economics, said we’re at a potentially significant historical moment. “We may be at a turning point here because of the strong forces against the standard economic forces that drove globalization,” he said. “There is no quick reversal of this.”
On March 15, PRSA hosted a webinar titled “Conflict in Ukraine: The Global Impact and Business Response,” featuring Dana M. Peterson, chief economist at The Conference Board. Members have access to this session on the PRSA website.