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Ukraine is wake-up call that ‘more investors should heed’

Investors may be under estimating the effects of the war in Ukraine according to geopolitical strategist and advisor Tina Fordham. Not enough are asking the big questions she said.

Speaking to Real Asset Insight during the recent ULI Europe Conference in Brussels she said: “It’s really important not to look at the Russian invasion of Ukraine as a purely humanitarian crisis happening in a remote place,” she said,

“It’s a big wake-up call for investors in that it has systemic implications,” she added. “It’s driving up energy prices and that’s contributing to inflation, but it’s also threatening what political scientists like me call the international order, which is why you’ve seen such a strong reaction coming from the 30 NATO member states the European Union and the United States.”

“This is the biggest geopolitical disruption, probably since World War II and not enough companies and investors are asking the big questions,” said Fordham.

She added that investors won’t review their asset allocation, their exposure or their capex plans if they assume that this conflict will be short and we’ll go back to normal and sanctions will be rolled back.

“You would only think that if you hadn’t looked at the trajectory of other conflicts and you assume that the the consequences wouldn’t be systemic,” she added

She said that among the myths that were exploded during the the course of of the Russian invasion of Ukraine was the notion that countries that were integrated into the global economy and the global financial system as Russia has been, would not undertake such a move given how costly and disruptive it would be.

“That has been exposed as a fallacy and a lot of countries and leaders, particularly but not only Germany, are looking at themselves and saying ‘how could we have got it so wrong?’.”

And she added: “Instead of thinking in normative terms like democracy versus autocracy, the Russia crisis tells us, in particular, to be very careful about kleptocracy where the state controls the assets and a small group of members of elites control those assets.”

Click on the video to watch the full interview or listen to the podcast below.

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