In the post–COVID-19 recovery phase, the global economy growth was gradually returning to stability. However, this fragile recovery has been repeatedly disrupted by rising geopolitical tensions and war-like situations across several regions. Conflicts between neighbouring countries have emerged as a serious threat to world economic growth, international trade, and global supply chains.
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War represents a negative shock to the global economy. Border conflicts and prolonged hostilities interrupt production processes, damage infrastructure, and destroy physical and human capital. Prominent examples include the Russia–Ukraine conflict, tensions between China and Taiwan, the India–Pakistan war, the Israel–Palestine conflict, and confrontations involving the United States, Iran, and Venezuela. Such conflicts not only destabilize the country’s economy directly involved but also create ripple effects across the global economy.
Many countries specialize in the production of specific goods and are globally recognized for their output contribution to the world markets—such as energy resources, agricultural commodities, technology, or manufactured products. When war disrupts these economies, production declines sharply. As a result, affected countries become unable to participate effectively in global supply chains and international trade. This leads to shortages, rising prices, and uncertainty in global markets.
The economic consequences are severe. Directly, war leads to loss of income, employment, and a decline in living standards in conflict-affected regions. Indirectly, other countries also experience reduced growth, inflationary pressures, and supply disruptions. Thus, the standard of living and income levels of even peaceful nations are adversely affected.
In conclusion, the war hampers world peace and causes large-scale destruction of people, economic growth, global trade, and supply chains. In an increasingly interconnected world, peace is an essential for sustainable development and shared prosperity. Avoiding the war is not only a humanitarian necessity but also a fundamental requirement for global economic stability.
By-Dr Mrutyunjaya Sahoo, Assistant Professor, Paari School of Business, SRM University – AP, Amaravati, Andhra Pradesh
