Africa-Press – Gambia. The world’s economy is already on life support. Things have never been well ever since late 2019, it has been one assault after another, it began with Covid- 19 pandemic and before even fully recovering from it, Russia invaded Ukraine, and now again Israel is pounding Gaza both on land and air as it hunts for the Hamas militia. As a result, there are serious looming concerns the world over on the possibility of a tough global recession in the near future.
Larry Fink the CEO of BlackRock recently said “Rising fear creates a withdrawal from consumption or spending and so creates recession in the long run”. Of course, business elites make big investments and purchases only when they feel secure. Additionally, Jamie Dimon the CEO of JPMorgan compared the current global situation to that of the 1938 at onset of WW2.
The common thing about these commentaries of the above-mentioned Wall Street titans is that they are all based on the geopolitics of war and conflicts. As per the status quo, there are up to 32 active conflict zones globally. These could be civil wars, drug insurgencies or even ethnic fights that are majorly happening because communities have failed to coexist.
The sad reality is that all these conflicts are destroying not only lives and properties but also the environment, and not forgetting their psychological impacts on victims, more so children. As a matter of fact, some wars have more bigger impacts than others. Take for instance the Russia-Ukraine war and the Israel- Hamas war, they are being fought locally but their implications are being felt worldwide.
The world has been greatly relying on agricultural outputs from Ukraine and Russia. Additionally, Russia is one of the world’s largest suppliers of Crude Petroleum, Refined Petroleum, Petroleum Gas, Coal Briquettes, and Gold. Food and Energy are two essential commodities for the global economy and because of the war, both items are already very expensive. The same thing applies to Israel and Gaza, neither of them produce oil nor export bulk food but are both strategically located close to oil-producing nations like Saudi Arabia. Hence a barrel of oil is almost reaching $100.
Bloomberg recently released a report indicating that the UK is already in recession. The UK’s GDP dropped by 0.5% in the June quarter and most experts predict it will decline again by 0.1% in the awaited data for the September quarter which will be published sometime this week. Technically, if a country’s GDP shrinks in two consecutive quarters it means that country is in a recession.
A similar situation is happening in the Euro zones, a union of 20 nations that all use a single currency “Euros”. In the September quarter, the GDP of the Eurozone declined by 0.1% and this quarter is not any better. On the other hand, the latest report on the job markets in the United States shows the unemployment rate at 3.9% and yet in early April this year it was at 3.4 %. These statistics clearly signal that the US job market is not doing any better. Unemployment just like GDP is all birds of the same feathers.
The foreign investment data from Beijing is even more worrying, for the first time it’s reading in negatives. This means foreign investors pulled out more money than they invested in China, and it is estimated at about $12 billion.
If you connect the dots, you will realize just one key thing, should these wars drag on a little longer we are definitely headed towards a global meltdown. This will even be worse in the global south, for most countries have their currencies tagged to the dollar and the majority of them especially in Africa, do not produce what they feed on. All these calamities can still be avoided though.
In the past, wars were fought for the global good. Take for instance during WW2 all superpowers formed an alliance against Germany’s Adolf Hitler. Even though the war still affected the global economy, the mutual understanding then was that the war had to be fought. That was quite different from the wars we are fighting now. For instance, Russia’s invasion of Ukraine is not for the global good and neither is Israel invading Gaza. These are strategic and political wars that can be resolved through dialogue on a round table.
Russia was against Ukraine joining NATO, that’s not a humanitarian urgency but rather a political motive. Instead of talking things out, they decided to fight and today makes 622 days of that war. The same thing with Israel and Palestine if you look at the core of that conflict, there is an unresolved political issue which is the two-state solution. This can’t be resolved with force but rather dialogue. Wars should be used as the last resort and not the first response.
Source: Nile Post
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