Macroscope | Don’t single out Russia or Ukraine war for the parlous state of the global economy

Name: ‘We will not stand by’: Nato heads of state meet to address Russia’s invasion of Ukraine
Uploaded: 2022-04-25T01:15:19.000Z
Duration: 3 min 51 s
Description: ‘We will not stand by’: Nato heads of state meet to address Russia’s invasion of Ukraine

For too long, we have papered over the systemic cracks as one crisis fed into another, sowing the seeds for today’s debt mountain, spiralling inflation and more

Unless the underlying causes are addressed, the war could push us towards the crisis to end all crises

Reading Time:3 minutes

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Protesters against government bailouts gather during the 2008 global financial crisis. The roots of today’s global economic woes date back to the failures of 2008 and beyond. Photo: AP

Anthony Rowley

Published: 9:15am, 25 Apr 2022

The major spring and autumn meetings of the International Monetary Fund and World Bank often take place against a background of economic and/or financial crises in one part of the world or another. But this year has seen the “globalisation” of such crises and the world is still only at the start of this unfolding drama.

Apart from the war in Ukraine and its economic fallout, we have a broader-based inflation crisis, an impending global debt crisis, a looming fiscal crisis, supply chain shocks, a looming capital flows crisis, sanctions wars and a global economic slowdown – as well as pandemic and climate change threats.

In more than 40 years of attending and chronicling international gatherings convened by the IMF and World Bank, I have never witnessed such a catalogue of economic and financial distress, nor seen so many economists making gloomy predictions.

The litany of woes is as depressing as it is long. As recently appointed IMF chief economist Pierre-Olivier Gourinchas observed at the spring meetings, as well as the twin crises of pandemic and war, there is a growing “risk of a more permanent fragmentation of the world economy” into geopolitical and economic blocs.

“Such a tectonic shift” would jeopardise the human and economic gains made over the past several generations and, he said, “represent a major challenge to the rules‑based framework that has governed international and economic relations for the last 75 years”.

03:51

‘We will not stand by’: Nato heads of state meet to address Russia’s invasion of Ukraine

Despite the links in causality between some of the multiple crises, the tendency to view them as one-off events, to blame others and to ignore underlying causes continues. Russia instigated the Ukraine war but the blame for inflation cannot be laid at Russia’s door as many are doing.

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Macroscope | Don’t single out Russia or Ukraine war for the parlous state of the global economy

For too long, we have papered over the systemic cracks as one crisis fed into another, sowing the seeds for today’s debt mountain, spiralling inflation and more Unless the underlying causes are addressed, the war could push us towards the crisis to end all crises

For too long, we have papered over the systemic cracks as one crisis fed into another, sowing the seeds for today’s debt mountain, spiralling inflation and more

Unless the underlying causes are addressed, the war could push us towards the crisis to end all crises