Globalization

The Russian attack on Ukraine in February 2022 marked not only a turning point (Zeitenwende) for German security policy but also for German foreign economic policy. From a European standpoint, the war served as a painful reminder of how economic dependencies can be used as political leverage, bringing the geopolitical dimension of trade relations and economic interdependencies into public focus. In particular, economic ties with the People’s Republic of China are increasingly being scrutinized. The ifo Institute conducted a representative survey with German firms in February 2024 to assess changes in their reliance on Chinese inputs since the outbreak of the war and firms’ plans regarding their supply relationships with China.

How far away is the world from ensuring that every child obtains at least basic skills? And what would it mean for world development to reach the goal of global universal basic skills? This article addresses these two intertwined questions in a new study. The authors draw on the individual-level test data from available international and regional student assessments to develop world estimates of the share of children not achieving basic skills in each country and then show the economic costs of these deficits.

In 2023, Russia experienced a 3.5% economic growth, but forecasts for 2024 indicate a slowdown to 1.5% due to tightened monetary policies and the expected global economic slowdown. Despite large military spending and Western energy sanctions eroding budget revenues, fiscal deficits have been generally kept under control. Intensified scrutiny of third-country firms violating energy sanctions widened discounts on Russian oil prices in late 2023. Generally, Russian import patterns remained relatively stable. In particular, EU exports of economically critical and common high priority goods to Russia in November 2023 represent just 2% of its prewar levels, underscoring the effectiveness of sanctions in halting direct exports. Besides China and Hong Kong, Türkiye and CIS countries became vital suppliers, meeting Russia's demand for economically critical goods and high-priority items.

While eight out of ten German manufacturing firms reported material shortages at the height of the pandemic in December 2021, this share had fallen to 18 percent in October 2023. Nonetheless, the recent attacks by the Yemeni Houthi rebels on container ships in the Red Sea highlight the fact that supply chain risks remain significant.