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Local expert says economic impact of Russia's invasion of Ukraine will be felt in Northeast Ohio

Pray for Ukraine St Andrew Ukrainian Catholic Church in Parma
Posted at 9:42 PM, Feb 25, 2022
and last updated 2022-03-01 16:46:33-05

AKRON, Ohio — As Russia continues its invasion of Ukraine and the United States and European allies develop strategies to respond, local experts are beginning to weigh in on how the conflict may start impacting Northeast Ohio economically.

On Friday, the European Union moved forward with a third round of sanctions against Russia, freezing the assets of Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov.

“We are not just listing oligarchs, we haven’t just already listed many lawmakers who prepared these steps, but we are now also listing the president, Mr. Putin, and the foreign minister, Mr. Lavrov,” German Foreign Minister Annalena Baerbock said.

Dr. Karl Kaltenthaler, professor of political science and director of the Center for Intelligence and Security Studies at the University of Akron, said that the sanctions issued by the U.S. and allies on Russia are necessary, but are unlikely to completely stop Putin's invasion.

"The sanctions absolutely must be there. Will they change Russian behavior in terms of stopping the Russian invasion into Ukraine and maybe getting the Russians to reverse course and withdraw back to Russian territory? I doubt that," Kaltenthaler said. "I think the Russians wouldn't have started this invasion had they not calculated that these sanctions were coming. We warned them. The Europeans warned them. Other countries warned them. So they calculated into the costs of this invasion the sanctions."

Local expert says economic impact of Russia's invasion of Ukraine will be felt in Northeast Ohio

Kaltenthaler said the other reason he doesn't believe these initial sanctions will be effective enough to end the invasion is the perception that retreating would put on Putin.

"The massive loss of face, the humiliation that would come to Putin for withdrawing because of sanctions—I don't think he's willing to do that," Kaltenthaler said. "He is extremely well isolated himself from the impact of sanctions and really the impact of the average Russian on the street. He lives in very much of a bubble, both kind of physically and mentally. So I think the sanctions will impact Russia pretty severely, they'll really be damaged economically by these sanctions, but I don't think they'll stop the invasion."

But an economic impact isn't just expected in Russia, it may be felt in Northeast Ohio as well as the conflict overseas goes on.

"Your average American will be affected by this economically and it's not because of the sanctions so much in the long term, maybe a bit more of an effect from the sanctions, but energy prices are going to go up because energy markets are extremely spooked by what just happened," Kaltenthaler said. "Russia is a major energy supplier, and a lot of the energy that Russia supplies goes through Ukraine, particularly to Europe. And so there's going to be an effect on our allies economically. It's going to impact their economies, which will impact our economies and our economy will also be impacted directly."

Case Western economic professor Jonathan Ernest says Russian is a major oil supplier, so that pain you're feeling at the pump isn't going away.

"There's a lot of uncertainty at the moment as to exactly what sanctions will be put in place, how the flow of things like oil and other fuels will be disrupted or not disrupted, and those could have some major implications," Ernest said.

The average price of gas in Ohio saw a 10-cent increase within the past week, "whether that's because of a war or sanctions or whether that’s a choice of Russia to limit the flow of that resource for a period of time that reduces the supply of oil," he said.

Kaltenthaler said another area of concern for how Russia's invasion impacts the United States is in the reliance, or lack thereof, other countries will have on us moving forward without a strong stance against Russia.

"The United States is looked at by many, many countries around the world as the most important country to keep international stability. And if we look like we're retreating from that role, then countries won't count on us anymore and countries will turn elsewhere," Kaltenthaler said. "And one of the places that those countries will turn is China, and neither Russia nor China have our best interests at heart. And that's one thing that Americans need to figure out—that both Russia and China want the United States to be weaker. They believe that the United States stands in the way of their achieving the greatness that they want to achieve."

For that reason, in addition to the economic impact that Russia's invasion of Ukraine is expected to have here, Kaltenthaler believes Americans should be very tuned into what is happening and believes this country can not turn away from this current conflict.

"We can't put our head in the sand and simply say, 'well, not our conflict, not our issue.' This is a major conflict in Europe and it's got global consequences, and if the United States doesn't look like it's taking a strong stance on this, then the United States will be worse for wear over time," Kaltenthaler said.

RELATED: EU unleashes another round of sanctions on Russia

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