Russia’s invasion of Ukraine has ended globalisation as we know it, said the head of BlackRock, the world’s largest asset manager, CNN reported.
BlackRock CEO Larry Fink told shareholders in a letter on Thursday that Russia’s “decoupling from the global economy” following its assault on Ukraine has caused governments and companies to examine their reliance on other nations.
“The Russian invasion of Ukraine has put an end to globalisation we have experienced over the last three decades,” Fink wrote, CNN reported.
The CEO, whose company manages $10 trillion in assets, predicted that Russia’s isolation will “prompt companies and governments worldwide to re-evaluate their dependencies and re-analyse their manufacturing and assembly footprints”.
But some countries could benefit from focusing on building up their domestic industries, as companies onshore or “nearshore” their operations, he said.
Fink said the Coronavirus pandemic had already set these wheels in motion, CNN reported.
“Energy security has joined the energy transition as a top global priority,” Fink said.
While Fink anticipates that coal consumption may increase over the next year as Europe and Asia try to wean themselves off Russian oil and gas, soaring energy prices will likely make renewables more competitive, he said.
“Longer-term, I believe that the recent events will actually accelerate the shift towards greener sources of energy in many parts of the world,” Fink wrote.