Ethical dilemmas in our economic trading partners

An exercise in moral idealism vs practical reality, and in some cases, necessity.

The school siren signals the time to break for lunch and the children assemble in the play area to chat and have a bite to eat. This one boy, Vladimir, decides that the Ukrainian kid has something he wants and attempts to take it. Another child, Joe, doesn’t like this behaviour and calls out Vladimir and asks the other kids to ban him from joining the play circle until his behaviour improves. Xi, who is not a fan of Joe – nor Joe a fan of him – thinks this is a good time to show concessions to Vladimir and give Joe the middle finger whilst also telling Joe to stay away from HK and Tai as he’s is a decadent influence on them. The siren then ends the lunch period with the dispute having not been resolved, if anything, it is escalating, and the children move off to the last lesson of the day; international relations.

It is a difficult and complicated challenge juggling the past, present and future with regards to foreign diplomacy, historical legacies and economic prosperity – a task I don’t envy with our political leaders. Nevertheless, I am very interested in how they deal with proceedings – navigating between ethical conundrums and economical necessities.

Unless you’ve been in a nuclear bunker for the past six months – and if you have, leave your contact details because we still might need it – the invasion by Russia into Ukraine is still raging on and unlikely to end any time soon, causing a devastating humanitarian crisis. There has also been dramatic economic effects, both direct and indirect, on these countries to and from the rest of the world.

Either Russia or Ukraine (or both) are in the upper echelon of the food chain, pardon the pun, when it comes to wheat, barley and sunflower seed/oil. Russia is also at the top when it comes to exporting fertilisers (fao.org). Ukraine, affectionately referred to as the “breadbasket of Europe”, makes well in excess of $10b/yr from its agricultural exports as it cultivates approximately 32 million hectares of its land (as.com). The war with Russia is expected to halve Ukraine’s economic output.

The European Union didn’t react as fast as America did with its sanctions of Russia – or is that, couldn’t? – with Russia being the EU’s largest energy supplier accounting for over a quarter of its oil and nearly half its gas (theconversation.com). Russia is also the third largest oil producer in the world at approximately 11 million barrels per day – only Saudi Arabia and America produce more (statista.com).

With the high concentration of such resources in these two countries the rest of the world is subject to the vulnerability and volatility of their productions given the current and ongoing war. Bordering Moldova imports over 90% of its wheat from Ukraine – this is going to impact them significantly (bbc.com). Plenty of European countries rely heavily on Russia for its energy resources, but China has since usurped them amidst the recent imposed sanctions (ndtv.com).

This brings in a very important question and the topic of this week’s article: would you plunge your country into darkness, or at least have energy prices soar, in order to play a role in the moral policing of the world? What about the Russian fertilisers for the many crops around the world and those flow on effects?

It’s a doozy, no two ways about it. If you’re not going to deal with Russia on moral grounds, it would be a tad hypocritical to be, “it’s okay, we’ll source our oil from Saudi Arabia”, as they’re not exactly first in the good book. I’m not saying actions should go unpunished or without consequence, but it’s a lot more complicated and fragile than most people give it credit for. I ask again, just how many of your own people would you be prepared to worsen/impoverish (or worse) over ideals/ethics?

“At what point should a country tell another country what they can and can’t do?”

China is another country which runs antithetical to western, democratic governance yet remains a major trading partner to such nations. We are constantly told about the “China problem” and things only seem to be escalating with recent developments involving Russia along with Hong Kong and Taiwan.

As we try and navigate an avoidable war with one of the greatest economic and military might’s in the world, my country – Australia – remain attached at the hip to China economically with approximately one third of total exports shipping Shanghai side or on Beijing bound boats (tradingeconomics.com). Australia is also China’s sixth largest trading partner, the main product being Iron Ore – a whopping $64b – and during the last 25 years the exports of Australia to China have increased at an annualised rate of 16.5%, from $2.25b in 1995 to $102b in 2020 (OEC.world).

As the data shows, this trend is upwards and doesn’t look like changing. Comments made towards China by previous Prime Minister Scott Morrison had disparaging effects on our export industries especially agriculture. So, where am I going with all this.

If Australia is so ethically opposed to China it needs to shift away from being dependent on resource exports and move towards tourism, manufacturing (ironic I know as we killed that industry here thanks to globalism and economies of scale) - Side point: if covid has showed anything it’s how important a domestic manufacturing industry is. More importantly and pressingly we have a great chance to be a leader in renewable energy especially solar. I’m sure our Lithium deposits will become even more sought after with the growing demand for batteries.

America likes to act as the world’s policeman – imposing freedom on countries until that’s what they want. Australia doesn’t have that influence or power and is generally seen as America’s lapdog. However, these are real problems that need real solutions and it shouldn’t be left up to a single country to determine the morals and values of the world.

I don’t necessarily have the solutions, but I will say this: A lot of countries do not have the luxury to play morality politics and for a significant number of them; practical reality, economic necessity and wealth prosperity will triumph over any kind of ethical Eden we may be striving for.

Thus concludes this week’s exercise. I’m sure it has left you with more questions than answers.