Difficult Times Ahead Amid Economic and Military Conflicts

With military and economic conflicts erupting over the last couple of years, it is understandable that many feel anxious about the future. On the economic front, the prevailing optimism regarding globalisation seems to be dissipating, with the COVID-19 pandemic disrupting the post-2008 recovery of the global economy. Post the 2008 market crash, much of the recovery was stimulated by easily available credit, which became unavailable as a result of the pandemic. Additionally, many major economies, including India, had to increase government spending to combat the effects of the pandemic. This completely upended the prevailing economic conditions, leaving both public and private entities in debt. Under these circumstances, the output and expansion of the private sector shrank.

Similarly, governments, now facing fiscal deficits, sought to re-evaluate their trade and spending practices. The United States of America (USA), which has been the hegemonic power for the last three decades, has begun efforts to change trade terms with multiple countries, especially India and China. This reflects, firstly, the precarious condition of the US’s economy, which has become debt-ridden post-pandemic. Secondly, it indicates that the hegemonic power views these two economies as threats and is attempting to negotiate trade deals that favour the US. Both India and China have resisted these efforts, leading to protracted negotiations and resulting in uncertainty. The US has also warned other countries of severe economic consequences if they align themselves with BRICS, the group of countries consisting of India, Russia, Brazil, South Africa, and China. This warning follows BRICS' expression of a desire to form their own currency to counter the hegemony of the dollar. Thus, the global economy appears to be navigating through uncertain times, with this uncertainty showing no signs of abating.

On the military front, the situation is similarly concerning, with wars in Eastern Europe and the Middle East casting a long shadow over global politics. While the war in Eastern Europe has reached a stalemate, the conflict in the Middle East seems to be escalating. Recently, Israel and Iran engaged in bombardment, prompting the US to intervene to halt the conflict. The situation in Gaza appears equally grim, although the US is attempting to mediate a ceasefire. These developments have alerted NATO, where, at the insistence of the US, member countries have agreed to spend 5% of their GDP on military expenditure. This marks a departure from the last 20 years, which had seen a reduction in military spending. The situation in South Asia also remains volatile, with countries like Pakistan, Bangladesh, and Myanmar becoming increasingly unstable, thereby raising security concerns for India. Similarly, fundamental disagreements in the South China Sea persist, which may escalate. In light of these economic and military challenges, the future of global politics seems uncertain, and we may be facing difficult times ahead.