The current state of global unrest helps no one and harms everyone
May you live in interesting times” is said to be an old Chinese curse.
The 2008 financial crisis, the pandemic, the floods, droughts, forest fires etc from climate change already
Record energy prices add to tides of rising inflation, and both sovereign and household debt.
Global trade and economic growth are hit, but the damage and suffering are unequally shared.
The US and Canada have grain and energy surpluses.
Both edge up interest rates, but only to restrain over-heating economies.
China’s growth is held back by its tight lockdowns, including Shanghai attain zero-Covid sufferers.
By far the worst hit is lower income, developing countries.
Some, like Somalia, Sudan, and Yemen combine drought, food inflation, and Covid-19.
Most have poor education and health systems. Their young populations have rising aspirations.
All poor populations are particularly hit by record food prices since food is a large part expenditure.
The UN Food and Agriculture Organization says food prices are still rising at the fastest rate for 14 years.
In March, global vegetable oil prices went up by 56% compared to a year ago, and cereals by 17.1%.
Rich Western countries combated the 2008 financial crisis fiscal and injections of cheap money.
Many developing, including IMF emergency disbursements and special drawing rights.
This meant weak economies were taking but at temptingly low or negligible rates of interest.
Yet now, cheap money is disappearing.
Rising interest rates drain weak reserves and make raising fresh loans even more difficult.
Even Lebanon, once a thriving financial centre, has declared bankruptcy.
Argentina, a country of great natural wealth and a wheat exporter, hovers yet again on the brink of default.
Fortunately in India, with its 1.4 billion population, Prime Minister Narenda Modi is in much better shape.
Foreign exchange reserves exceed $600bn and economic growth this year should be strong.
Tax revenues have risen.
Agricultural surpluses and grain exports will partly compensate for eased costs on energy imports.
Even so, many low-paid and middle diesel,
And swiftly rising in the wake of BJP’s success in winning four of five state elections, Uttar Pradesh.
Six increases came in a single week.
India is heavily dependent on imports of oil and gas and current high prices of both are a heavy burden.
Russia is offering very welcome discounts but deliveries from Baltic ports are limited and expensive.
What about Bangladesh? We are affected by energy and food inflation.
Our export markets are sensitive to slowdowns in customer demand and global trade.
Figures just released for the eight months till the end of March show higher import prices.
Especially for energy, and lower remittances have increased our trade deficit to an despite rising exports.