Between Ukraine and Aruba

I asked an economist and a banker about the possible effect of the Russian invasion of Ukraine on Aruba.

Both agreed prices will go up here, in fact oil and gas prices have already gone up in Europe which will make airline tickets more expensive and affect tourism. It will also affect the price of goods imported into Aruba, and while we were expecting around 6% inflation, we will probably experience a much higher one.

The banker reported the world bumped Russia off the SWIFT network – the Society for Worldwide Interbank Financial Telecommunication, an independent enterprise based in Belgium that provides a messaging system linking more than 11,000 banks and financial institutions in over 200 countries and territories, and that Russia now has no way of paying for anything imported, the equivalent of COMPRA being unable to pay for the purchase of toilet paper in the USA. And who knows how that would play out because it is a first.

The economist offered that in view of the EU’s unanimous decision to abandon Russia as a source of energy – 50% of Europe’s energy needs come from Russia, prices of LNG will go up globally, and Aruba, bound by an unseen agreement to Eagle LNG will have to cough up big amounts of cash in order to keep moving.

If there is any take-away from the Russian invasion of Ukraine, another economist offers, is the switch to sustainable energy, not just because of climate-change but because of strategic needs. Putin feels he can annex territories because Europe is so dependent on his pipeline, whose faucet he controls — the pipeline in charge of heating homes and businesses in Europe, in the winter of 2022.

Putin decided to go to war in the winter, for a reason. Brrrrr.

GOA will have to learn from the situation in Europe, and really read the new UN report on climate-change carefully, to realize that the two most important CURRENT issues are Energy Independence and reduction and eventual elimination of CO2, de-carbonization.

It should be our primary objective, since we have wind and sun in abundance, but we do not aggressively move our citizens and businesses to minimize carbon use and maximize sustainable energy generation and consumption. Gas is not the solution, my economist reiterates, it’s about to get super-expensive, and GOA should allocate financial resources to invest in sustainable, decentralized energy generation.

The one good thing to emerge from the terrible tragedy of the Ukraine invasion? Forcing us to go for sustainable energy. People don’t change because they see the light, they change when they feel the pain.

Why should the invasion of Ukraine matter to us?

Ukraine is #2 in Europe in terms of land mass and population, more than 44M people.

Ukraine is one of the richest countries in the world as far as natural resources such as uranium, titanium, manganese, iron ore, and mercury, besides other rare and precious mineral, and #1 in Europe in regards to agriculture, they grow everything, enough to feed 600M people. They produce and export large quantities of wheat, rye, and corn, they are the #4 biggest potato grower in the world; They are high up there in the production of eggs, cheeses, and fruit; they have huge industries, exporting anything from steel to power plant turbines and rocket launchers; they operate an enormous network of gas pipelines, and a huge network of railways; They are #8 in the world for nuclear power plants, and run one of the largest defense industries in the world.

We have a madman in residence, 20K across the bay. We should pay attention.

 

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March 02, 2022
Rona Coster