The aggregate data on new subsidies to agricultural producers and/or consumers since the onset of the pandemic are telling. Across fifty-four countries, the Organisation for Economic Co-operation and Development (OECD) found that governments devoted about $55.5 billion in additional public support to agriculture amid the pandemic in 2020 and $70.4 billion in 2021.

Since the war began, governments have enacted a host of policy measures, stepping up aid to farmers and consumers through subsidies, price caps, and other measures. In March 2022, the EU suspended a prohibition on growing food and feed crops on fallow land without loss of greening payments and instituted a €500 million support package providing additional assistance to farmers. Spain, Finland, and France made funding available to farmers to cope with high input costs. 

And such measures were hardly limited to Europe. On March 7, the Philippines allocated $467 million in new subsidies to farmers, most of them going to fertilizer. Weeks later, the Egyptian government capped prices on all categories of unsubsidized bread. In April, the Indian government expanded its fertilizer subsidy program, and in September it banned the export of broken rice and placed a 20 percent export tax on some other varieties. Lastly, some countries—including Egypt, Bulgaria, and Ukraine—are building resilience by accumulating reserves of food and feed commodities.  

Given the twin shocks of the war and Covid-19, and the fact that both drivers will have an ongoing impact on markets, many of these measures will be politically difficult to reverse and will remain in place much longer than originally intended.

A SECOND underappreciated implication of the war is the enormity of the impact of Russia’s ruptured relations with the West. Many experts are lost in battlefield updates, U.S. policymakers seem oblivious to the risks as they aggressively pursue the war, and the business community generally doesn’t get it.

The most profound risk is war between the United States/NATO and Russia. It is unlikely because the cost would be enormous for both sides. But given Ukrainian battlefield successes based in part on Western weapons, and Vladimir Putin’s view that control of the Donbass is an existential need for Russia, conflict is conceivable. Putin’s threat to use nuclear weapons makes the risks and possible implications for international relations greater.

More broadly, the relationship will be moribund for as long as Putin is president, and that could be a decade or more. Some Russian analysts now refer to the United States as “the enemy.” While true, it’s still quite a shock to hear for long-time Russia analysts. Neither side will be interested in meaningful relations with the other for a long time.

That leads to a series of risks. On nuclear arms control and strategic stability, Moscow will probably adhere to most of the provisions of New START until it expires in 2026—despite having recently suspended on-site inspections. But as of 2026, the nuclear relationship will probably rest on crude deterrence, much like in the initial years of the Cold War. Mutual transparency and limits will fall by the wayside. Thin levels of communication will stand alongside a broken relationship between the top nuclear powers.

For NATO and Europe, assuming no direct armed conflict, there will be an unstable, hot line of control in the middle of Europe just as Russia and the rest of the continent have decoupled in the energy sector. Along that line will be a newly muscular and cohesive NATO standing opposite a Russian buildup. 

Moreover, the West-Russia split will occur against the backdrop of the new “Putin Doctrine,” which asserts that former Soviet states will henceforth stay in Russia’s sphere of influence and not lean toward NATO. The doctrine pertains especially to what some analysts call historical Russia: eastern Ukraine, Belarus, western Kazakhstan, and Russia itself. But there and more broadly in the former Soviet space, expect more wars as neighbors try (with Western support) to move away from Russia. 

THE FINAL set of under-recognized implications of the war pertains to the international system. First, this war foreshadows a likely increasing number of wars in the current historical era. As I explained in the Winter 2021 issue of Washington Quarterly, the current period is one of bipolarity: the United States and China are the superpowers.

Bipolarity is more stable than the multipolar world that most observers predict, but it is less stable than the unipolar, U.S.-led world that existed from the fall of the Soviet Union in 1991 to the election of Donald Trump in 2016. Overwhelming U.S. power deterred challengers and suppressed most wars. Under bipolarity, though, leaders must judge the power of not one but two nations—a task made even more difficult because the bipolar system is new. 

The Ukraine conflict is the first major war of the bipolar era. Under bipolarity, more conflicts should be expected, including those between a great power and its neighbors (Ukraine), as well as proxy wars between a superpower and a great power over a third party (the United States and Russia over Ukraine). Putin tried to elevate Russia’s status in the system by weakening the U.S.-led order in Central and Eastern Europe, and by keeping NATO out of Ukraine. Russia’s leader, however, badly underestimated the strength and resilience of the U.S.-led grouping within bipolarity. This is an example of why wars are more likely under bipolarity than unipolarity—a misperception of relative power leading to war.

Second, nuclear weapons have played an underrecognized role in restraining both the United States and Russia. It is remarkable that the dimension of the Ukraine conflict pitting the United States/NATO against Russia has not already produced a military crisis. Both nuclear powers in the event seek to avoid direct conflict and the risk of escalation to the nuclear level that entails. Indeed, the shadow of nuclear weapons will continue to dampen escalation between the United States/NATO and Russia—it is the primary reason why war remains unlikely.

What are the long-term implications of the war for the international system? Many observers believe the West will get a huge boost if Russia loses. Others see a big hit to the international order if Russia wins, including a weakening of the norm against the use of force for territorial conquest. 

But history will likely view this war as a regional conflict that didn’t alter the international system. The war won’t affect the distribution of capabilities that produces the system. The United States and China were the superpowers in a bipolar world before the war, and they will be after it. Each side will have regions or spheres of influence. And within the robust U.S.-led grouping at least, the norm against conquest by force will remain alive and well.

THE WAR has significant and underappreciated implications for deglobalization, Russia’s relations with the West, and the international system. But what are the concrete impacts on geopolitics and markets?

Deglobalization in the energy sphere means that the market alone will no longer dictate flows. Instead, geopolitics will play an increasing role in shaping where these hydrocarbons go—and that in turn leads to regional groupings. Political alignment will also color related investment decisions and infrastructure choices. In addition, the growing “good oil”/“bad oil” relationship will spark specific global tensions. If Saudi Arabia becomes a “bad” producer, tensions between the kingdom and the West will skyrocket because Saudi elites won’t accept this dark shadow on their reputation. Meanwhile, Russia, Venezuela, and Sudan will see their pariah status worsen.

In the food arena, the war will be a long-term driver of upward pressure on food prices—both because of the uncertainty it creates about production and the support it lends to market interventions such as subsidies. These measures have the long-term impact of decreasing market efficiency and on balance boost prices.

Regarding Russia and the West, nuclear and other strategic arenas across the board will show lesser, even crude, levels of stability. The risk of overreaction in a crisis or an accident leading to escalation will increase significantly. Also, the war in Ukraine marks a lost generation of work by officials and experts on both sides trying to build better relations between Russia and the West. The Western analytic community must figure out what it got wrong, and then prepare a new action plan if there is another opportunity to engage Russia.

On the international system, we should expect more wars now, under bipolarity, when compared to the twenty-five years of unipolarity. The continuing challenge will be to assess where war is likely, and then take all possible steps to prevent it. A U.S.-China war over Taiwan is the most prominent case. But risk around Russia will remain very high. Direct conflict with NATO could be calamitous. Moscow’s support for Serbian leaders against both Bosnia and Kosovo, neither of which belongs to NATO, creates conditions ripe for war. And the new “Putin doctrine” demanding loyalty from neighbors will likely lead to conflict in Eurasia.

Cliff Kupchan is Chairman at Eurasia Group. He has worked on Russia for over thirty-five years in government, in the private sector, and served for two years as vice president of the Nixon Center.