Russian-Ukrainian crisis a boon for US-Xinhua

Photo taken on March 28, 2022 shows the Capitol Building in Washington, DC, United States. (Xinhua/Liu Jie)

by Xin Ping

BEIJING, Nov. 8 (Xinhua) — For the United States, war is an extremely profitable business. In fact, the country was crowned as the world’s sole superpower by the largest and most devastating war in human history.

Its gross national product (GNP), measured in constant dollars, rose from US$88.6 billion in 1939 to US$135 billion in 1944, and the share of war-related production in GNP rose from just 2% to an astonishing 40%, according to British economic historian Alan Milward.

Right now, history seems to be repeating itself. Eight months into the Russian-Ukrainian conflict, as the flames of war plague ordinary people in Europe, Uncle Sam’s war business is also on fire – riches are piling up from the sales of weapons, the energy shortage in Europe and the militarization of the dollar.

The production and sale of arms has always been a cash cow for the United States. Just when the country’s overall economy is struggling with multiple headwinds, its notorious military-industrial complex is taking advantage of a golden opportunity.

The Kiel Institute, a German think tank, found that US support accounted for about 75% of the total military aid of more than $35 billion committed by Western countries to Ukraine as of October 21.

Just a month after the crisis erupted, the overall market value of the Western arms manufacturing sector had increased by 12%, from $630 billion to $705 billion, Russian newspaper Novye Izvestia noted. Lethal activity is expected to grow by 7% in the second half of 2022, and the annual revenue of the Western military-industrial complex will reach $510 billion in 2025, an increase of $106 billion from 2021. most of them will apparently be the best American defense contractors.

People refuel their car at a gas station near Paris, France, Aug. 18, 2022. (Xinhua/Gao Jing)

The US is also looting Europe’s burning house to make money by pressuring Europe to stop energy inflows from Russia so it has to buy energy resources in the United States at a high price. Data from Business Insider showed that US companies can earn more than $100 million on each ship transporting liquid natural gas to Europe. No wonder ExxonMobil, an American energy giant, has seen its stock price jump 58% this year.

French President Emmanuel Macron has openly complained that energy prices in the United States for France were four times higher than on American soil. European politicians take business lesson 101 from their American friends: never mix friendship and business.

And as always, the United States benefits from its powerful dollar. In times of crisis, global investors flock to dollar assets for their safety. Added to this are the Fed’s rate hikes, which came after it flooded the world with cheap dollars in 2020 and 2021 to boost a US economy hit by COVID-19. Central banks in other economies must follow suit to prevent capital outflows.

Around the world, commodity prices are skyrocketing; inflation is galloping; debt service becomes unbearably onerous; capital flight brings vulnerable countries to the brink of economic disaster. Even advanced economies such as Britain, the European Union and Japan are not spared.

Photo taken on March 17, 2020 shows US dollar banknotes in Washington DC, United States. (Xinhua/Liu Jie)

We are now at the other high end of the “dollar smile” – a miserable global economy driving up the value of the dollar – but the frowns are all we can see in the rest of the world.

There are winners and losers in wars. Yet somehow the United States has always managed to emerge triumphant. While the outlook for the current conflict remains uncertain, one thing is certain: the United States will celebrate.

(The author is a commentator on international affairs, writing regularly for Xinhua News Agency, Global Times, CGTN, China Daily, etc. He can be contacted at [email protected])

Christi C. Elwood