Even a lay person knows the reasons behind the present crisis facing the world economy, thanks to the revolution in information technology. But the way out? No one knows, not even experts. For factors causing the crisis are beyond the control of experts on economy or wars. In fact, they are only capable of reasoning and explaining things as they are, but, in most cases, clueless about the future turn of events.
The post-Covid crisis in the world's commodity market is well understood. Experts have been as a rule assessing the magnitude of disruption caused to the global supply chain and forecasting how the world economy might fare in the short, mid and long term. But who knew that there would be a war in Eastern Europe and the entire world would be engulfed in it by default? And as ill luck would have it, both the warring nations, Russia and Ukraine, are also the leading growers of foodgrains, wheat in particular. And Ukraine is also the major source of global supply of sunflower oil. Unsurprisingly, disruption caused by this war has thrown the world's foodgrains and edible oil market into a state of unforeseen uncertainty. But as if it was not enough, Russia, the main player in the ongoing war, happens to be the world's biggest producer of oil and natural gas.
But, except foodgrains, whose supply was disrupted by the war, that of oil and gas was not. But then why has oil price spiralled out control in the world market.
Here, again, the cause and effect chain is working neither in a simple nor in a linear fashion. For Russia, despite the war, would not mind its oil and gas to be made available to the rest of the world. But the big powers including America and Europe, would not allow that. Why? Because they decided that as the aggressor in the Ukraine war, Russia deserves to be punished by way of imposing economic sanction sanctions on it. Ironically, European nations are also the biggest consumers of Russian oil and gas. This triggered the oil speculators to increase oil price still higher. Knowing full well that economic sanctions on Russia and embargo on the latter's oil and gas will only boomerang on them, Europe still went ahead with its punitive actions against Russia.
And hence is the vicious circle in global food and energy market. To put differently, geopolitics has now entered the scene to compound the existing economic crisis of the world.
Who is going to lose most as a result? Needless to say, worst losers are the poorer nations and their people.
Though inflation at the moment is a global phenomenon due to reasons delineated in the foregoing, its impact will not be even on different economies. In fact, the rich nations with their robust economies, stronger currencies and better social security arrangements, will be able to protect the poor segment of their populations better and for a longer duration.
But the less fortunate nations have already begun to face the music for no fault of theirs.
Even worse, these nations are trapped in yet another complication rooted in the world's existing financial order dictated by the same big powers. As according to this order, the economic worth or the value of assets in the possession of an economy is measured by the yardstick of US dollar.
Consider the case of Sri Lanka. The country has failed as an economy as it has depleted all its reserve in US dollars. The Sri Lankan Rupees are just pieces of paper! Falling value of Pakistani rupee against US dollar is another instance of a country in deep economic crisis.
We, in Bangladesh, are also concerned because of the rising pressure on our own US dollar reserve due to rising import bills.
But the major powers behind this crisis are silent. Rather than accepting responsibility and coming forward to stand by the vulnerable countries hit hard by the crisis, the big economic powers are just looking on and pointing the accusing finger at each other. The West says it is the war in Ukraine and Russia is to blame. Russia, on the other, thinks it is the Western sanctions, that is the villain of the piece.
To the rest of the least developed and the developing world, it is both.
And it is against an unpredictable global backdrop that Bangladesh is trying to look forward to a better future for its people and allocating its scarce resources to that end.
How can it plan, for example, for the next one year, when the
world around has been deliberately rendered uncertain by the great economic and military powers?
But Bangladesh has seen worse. It has survived a devastating war for its freedom. Its people are born fighters against recurrent natural calamities. Neither the recent pandemic could diminish the spirit of people.
So, undaunted, the nation as always will be bracing itself for the turbulent days ahead.
