Coordinated actions needed to deal with global challenges

A divided world begins this New Year unsure of coping with the challenges of war, higher military expenditure, slowing economic growth, climate change, Covid-19, and protectionism. Consequently, the uncertainties have grown.
 

Despite talks of peace negotiations, few see a quick end to the war in Ukraine. The United States and its allies are committed to supporting Ukraine, despite serious hardships, especially in Europe. Russia draws its financial support from China, India, and some other countries to keep the war going. Ukraine expects a major Russian military offensive in the next couple of months. Meanwhile, Russia keeps raining missiles on civilian infrastructure in Ukraine. What course the war or peace efforts will take is far from certain.
 

What is certain, however, is diversion of significant resources to military expenditure, especially in the major economies. Russia is stepping up its war capabilities. The United States and its allies are also enhancing their military capabilities to help Ukraine defend against Russia, best exemplified by Germany doubling its defense budget. The belligerence of China and North Korea has pushed Japan, Taiwan, and South Korea to abandon their pacifist stance and India to build better road infrastructure at the borders and invest more in defense production and acquisitions.  
 

As the Reserve Bank of India (RBI) says, the international economic order stands challenged, financial markets are in turmoil due to monetary tightening in various parts of the world, food and energy supplies and prices are under strain, debt distress is staring at many emerging markets and developing economies, and every economy is grappling with multiple challenges. The more likely scenario is inflation coming down due to normalisation of supply chains and tighter monetary and fiscal policies at the cost of global trade and economic growth, which are expected to fall significantly.  
 

All policymakers, big businesses, and people at large understand the effects of climate change and are making significant investments towards attaining net-zero carbon emissions in the next few decades. However, the urgency, funds and attitudinal changes needed to accelerate the transition fall short of the requirement. The possibility of severe weather conditions impacting agriculture output and the people dependent on agriculture-related activities cannot be brushed aside.  
 

The recent spurt in the new variant of Covid cases in China, Japan, South Korea, US, and some other countries is a cause for some concern. All the countries need to work together to contain the virus and its effects on the health of the people everywhere.

Many countries are turning inward and protectionist. Even the traditional champion of free trade, the United States, has imposed many trade barriers against China. The European Union has also decided to impose carbon tax on goods entering Europe with a view to protect its industries that comply with higher environmental standards.
 

After the Second World War, many multilateral institutions were established to address the global issues and resolve differences between various countries. In recent years, these institutions have been significantly weakened by the big powers. Given the challenges the world faces, coordinated actions are needed by all nations to bring about peace and prosperity worldwide. Hopefully, the G-20, under the leadership of India, will strengthen the multilateral organisations and bring about more cohesion in the way leaders of big economies view the challenges and whatever needs to be done.

email: tncrajagopalan@gmail.com