“The impact of sanctions on Russian business abroad and Hungarian business in Russia: parallel stories of adjustment”, Kálmán Kalotay and Csaba Weiner (IWE CERS, Hungary)

The global economy has gone from one crisis to another over the past few years. The COVID pandemic was not over yet when the war in Ukraine erupted, adding to the uncertainty of the times. The October 2022 World Bank/IMF growth projections are down again, and even if economies are not affected in the same way, all are impacted. Among emerging economies, oil, gas, and commodity producers may fare better, while others will see their situation further aggravated because of rising food and energy prices. Global value chains (GVCs) have been one of the backbones of globalization, interconnecting economies all over the world, and bringing into the production line many countries that were not part of the traditional production and trade networks. Decades of liberalization enabled GVCs to develop based on economic rather than political imperatives. But this has changed since the Global Financial Crisis and the ensuing recession. The US-China trade war is an illustration of this progressive shift. The COVID pandemic and the conflict in Ukraine have further highlighted the increasing role of governments in business and economics and exposed the vulnerabilities of global value chains. Added to that the climate change imperatives and societal demands, and we can see that we are entering a period of profound transformation of GVCs. This is likely to have substantial consequences for emerging economies as many have built their economic growth on increased GVC participation. The transformation of GVC is not the only parameter weighing on emerging markets’ future. It is in this context that the EMI Report monitors the performance of emerging market multinationals. It also examines the growth prospects of emerging economies in today’s highly complex and uncertain world. The Report also analyzes the transformation of GVCs over the past two decades, and deals with GVC related issues, such as the potential impact of sustainable finance on GVCs, or how financial innovations could help micro and small enterprises (MSMES) integrate GVCs. The following summarizes the key messages of the chapters included in this volume

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