The conflict that occurred between Russia-Ukraine not only had an impact on the political aspect but also on the economic aspect of Russia. Since the first attack launched against Ukraine, the country has had to face the withdrawal of foreign companies. Foreign companies from various sectors––from finance, food, media, technology to energy––suspend and/or scale back their operations in Moscow. The symbolic step was taken by 4 (four) United States brand icons, namely PepsiCo, Coca-Cola, McDonald's, and Starbucks on Tuesday (8/3/22). Apart from these companies, there are hundreds of other companies engaged in their respective specialized fields that have also withdrawn and suspended their operations in Moscow.

In its action, not all companies stop their business operations completely. Some just suspend, some other stop their operations in certain fields and continue to sell other commodities. One of the universities in the United States, Yale University, managed to compile the actions of approximately 500 (five hundred) companies withdrawing from the Russian market in 5 (five) categories of reducing operations––withdrawal, suspension, scaling back, buying time, and digging in. Withdrawal is the complete cessation of the company's operations. Suspension is the opening of options for re-engagement while limiting surgery. Scaling back is the reduction of activity in certain business sectors while continuing with other businesses. Buying time is delaying investment while continuing the substantive business. Digging in is a refusal to reduce activity.

McDonald's announced on Tuesday (8/3/22) that its 850 (eight hundred and fifty) outlets in Russia will be temporarily closed, resulting in the emergence of a chain of local McDonald’s copycat restaurants in Russia called Uncle Vanya. Starbucks went further than McDonald's by suspending all business activity in Russia, including shipping its products. Meanwhile, PepsiCo will reduce sales of beverage products but will continue to sell other important products, such as formula, milk, and baby food. Of course, all these actions are not carried out without reason. According to PepsiCo CEO, Ramon Laguarta, as a food and beverage company, humanity must be applied to the business they run. McDonald’s CEO, Chris Kempczinski, added that the conflict in Ukraine and the humanitarian crisis in Europe had caused great suffering to civilians which is why his company will join forces to condemn aggression and violence and pray for peace.

In addition, some companies that hesitate to suspend their activities have to deal with encouragement and pressure from the public. Switzerland-based company, Nestle, initially refused to stop its business activities in Russia, but when a public awareness campaign was launched boldly featuring Nestle's bloodstained chocolate bars, the company later announced that it would be suspending work in Russia. However, there are also several other companies that are determined to continue their operations in Russia, including the French retail company Auchan, which defies public opinion and stated firmly to remain in Russia as well as several banks with large exposure in Russia which also ignore this exodus.

Based on Kompas.com's records, since the end of 2021, cooking oil supplies in Indonesia have experienced a drastic decline and price hike. Facing this phenomenon, the Ministry of Trade of the Republic of Indonesia (Kemendag RI) has set a series of policies, starting from determining the Highest Retail Price (HRP) to Domestic Market Obligation (DMO) and Domestic Price Obligation (DPO) starting January 27, 2022. DMO is a policy that requires all migrant producers who do export to allocate 30% of their production volume for domestic needs, while the DPO is applied to regulate the price of crude palm oil (CPO) in the country. With the enactment of the HRP policy of Rp. 14,000/liter with the difference in prices in several packaging variations, cooking oil supplies are increasingly becoming scarce as cooking oil prices fall in the market.

Recent developments in the government's attempts to ensure the availability of cooking oil have now led to the revocation of the HRP for packaged and bulk cooking oil and the revocation of the DMO and DPO policies. The revocation of the cooking oil HRP policy by the government aims to get a new balance through the market mechanism. The government also reported that with the implementation of DMO policy some time ago, producers found it difficult to ensure supplies of cooking oil due to higher CPO prices than HRP so that several oil processing factories were forced to close because they could no longer run their factories. The consequence of the revocation of the policy is the return of the domestic packaged cooking oil price to the world CPO price of Rp. 24,000/liter. Along with the revocation of the HRP, currently cooking oil supplies have returned to normal and are nearing an abundance. Based on information obtained from several sellers (18/3/22), the number of store requests for cooking oil needs has been met up to 100%.

In line with the revocation of the HRP, DPO, and DMO policies, the Government established a policy of increasing CPO export rates with the aim of ensuring that cooking oil raw materials are still available domestically. According to the Indonesian Minister of Trade, when the CPO price is above the level of US$1,000 per tonne, there will be a flat tariff of US$175 and for every CPO price increase of US$50 per tonne, there will be a tariff increase of US$20 per ton for CPO. Therefore, the export levy plus export duty from the original US$375 per tonne will change to US$675 per tonne. Hence, exporters will most likely choose to sell CPO domestically rather than abroad because it will be more profitable. This mechanism is considered to be able to maintain the stability of domestic supply.

The erratic weather has poorly affected the dynamics of agriculture in Indonesia. A number of conventional farmers––who rely on chemical inputs, especially pesticides and chemical fertilizers––in several parts of Indonesia, one of which is in Gorontalo Province, have to lament the fate of crop failure losses because they cannot determine and predict when it is dry and when it rains (2/2/22). Apart from farmers in Gorontalo Province, several farmers in Pangandaran Regency also complained about poor harvests. One farmer from Cileuncang, Suryaman (45), complained about the quality of his rice harvest with very small and abnormal grains as a result of his rice fields being frequently flooded (6/2/22). The extreme rain was also complained about by a farmer from Cijulang, Wawan Kurniawan (38), who received poor yields (6/2/22).

With uncertain conditions, these farmers had to delay planting and experience crop failures. Currently, conventional farmers are faced with a lack of information on weather forecasts and technological stagnation which then contributes to the losses they experience. Conventional farmers are used to relying on astrology to determine their farming activities, but with climate change troubles them to predict the weather. The inability to determine the weather then results in the death of horticultural crops and corn and the possibility of pest attacks. Apart from horticulture and maize, the main food sector, such as rice, was also negatively affected.

The extreme weather and crop failures experienced by the farmers have a negative impact on food prices which are increasingly soaring. According to the Head of Research Centre for Indonesian Policy Studies (CIPS) Felippa Ann Amanta, climate change can disrupt food availability and threaten food security. Reduced production levels can lead to an increase in food prices which has an impact on food access, affordability, and utilization. One of the increases in food commodities was found in Makassar, especially for cayenne pepper and shallots. In the case of cayenne pepper, the selling price of the commodity reached Rp. 70.000,00 per kilogram, with an increase of Rp. 20,000.00 since the previous week (9/2/22). Meanwhile, shallots are sold at a price of Rp. 40,000.00 per kilogram, with an increase of Rp. 5,000.00 per kilogram in the previous week (9/2/22). In addition, in January 2022, the price of rice on a national scale increased. The average price of premium quality rice in the mills reached Rp. 9,824.00 per kg, an increase of 1.57 percent compared to the previous month, while the medium quality rice in the mills reached Rp. 9,381.00 per kg, an increase of 2.77 percent. The low harvest in November to December 2021 and the hydrometeorological phenomenon in early 2022 were the causes of the increase in rice prices.

Seeing this spike, the National Police's Food Task Force (Satgas) predicts that the prices of basic necessities––including red chili peppers and shallots––will increase ahead of the month of Ramadan and the celebration of Eid al-Fitr. Apart from the surge in demand for imported commodities, bad weather also contributes to the decline in supply. To deal with this, as quoted from the Chairman of the Association of Indonesian Chilli Champion, Tunov Mondro, the government must take concrete steps and interventions to overcome the skyrocketing food commodity prices.

Monday (28/2/22), the Russian currency, the Ruble, was observed to have fallen drastically. The ruble plunged into 106.01 per dollar in Moscow and closed Wednesday (2/3/2022) at 106.02 after hitting a record intraday low of 118.35, recording a drop of more than 10% on the day. This decline is a result of the war that occurred between Russia and Ukraine, where countries in the world impose economic sanctions on Russia. A series of sanctions in the form of blocking major Russian banks from the international payment system or the Society Worldwide Interbank Financial Telecommunication (SWIFT)––a system that migrates billions of dollars from thousands of banks and other financial institutions around the world––comes from large and superpower countries, such as the United States and Europe. The impact of this blocking has prompted old Russian investors to seek new investment asylum to new safer zones, namely the yen and the US dollar.

In addition to the Ruble's fall, shares in major Russian banks also slumped as a result of sanctions imposed by western countries. Share price of Sberbank––Russia's largest lender––down 95% on the London Stock Exchange on Wednesday (2/3/22) to trade at $0.01. This fall marked the lowest point in Sberbank's share price which led to its withdrawal from the European market. A spokesman for Sberbank stated that it, in particular its European subsidiaries, had experienced abnormal cash outflows following the Russian invasion of Ukraine. Apart from Sberbank, major Russian stocks, including Novatek, Lukoil, and Rosneft, also experienced similar declines. In order to stabilize financial markets, the Central Bank of Russia intervened in the foreign exchange market and also expanded the Lombard list. Apart from Russian stocks, global stocks also experienced a similar decline to the Jakarta Composite Index (JCI), where the JCI recorded a fall into the red zone with a decline of nearly 2% on Thursday (24/2/22). US stock markets were also sluggish, with the Dow Jones Indus AVG, S&P 500 Index to Nasdaq Composite slumping.

The sharp devaluation undergone by the Ruble has the potential to cause inflation and will most likely result in a bad impact on the Russian population who are likely to be suffocated by the prices of the soaring goods. Prices for homemade products, which are mostly imported, will skyrocket and the cost of traveling abroad will increase. In addition to inflation, the stock market could be in danger of closing. This economic downturn could also affect Russian military operations, with possible pressure on the smooth running of the operation. Russia's internal economic turmoil is expected to worsen shortly as the ruble's slumping value and falling stock prices forced supply activity to stop as a result of low demand.