THE G20 summit in Bali has brought together leaders from twenty countries to discuss the major problems facing the world, with the geopolitical and economic fallout of the ongoing Ukraine war figuring at the top. Russia’s invasion of Ukraine has been the singlemost factor for the current setback to the global economy. In today’s globalized world, events in one part of the world trigger far-reaching fallout in other parts. There have been foodgrain and fuel shortages which have driven up prices and this has been a matter of great concern for developing countries.
The continuing war, however, is bad for the world economy as the shrinking of the US economy through the April to June quarter shows. A slowing US economy will have far-reaching effects on the world. And this is happening at a time when the global economy was gradually recovering from the debilitating fallout of the Covid-19 pandemic, a once-in-a-century event. The countries were opening up and letting the economy function normally. International travel has also returned to pre-pandemic levels.
World leaders thus want an early end to the war. The United States and its allies heaped pressure on Russian president Vladimir Putin to resolve the crisis, pinning the high global food and fuel prices at his door. However, Russia still has allies in China, India and South Africa at the summit, who have so far not gone entirely along with the western narrative on the war.
India’s economy has also been hit hard by the Ukraine war. Record inflation has pushed food prices of many essential commodities beyond the purchasing power capacity of the common man. Thankfully, India has imported oil from Russia at subsidized rates. This has made it possible for the government not to hike the fuel rates.
That said, India’s economy is not out of woods yet. India’s growth has been projected to decline to 6.8 percent after registering a healthy increase of 8.7 percent in the last fiscal year. The war in Ukraine thus remains a danger. If it drags on, the global economy, and with it, the Indian economy, is likely to come under severe stress again. Therefore it is incumbent on the world to come together to resolve the crisis in Ukraine and find a solution that addresses the concerns of all the parties involved. Otherwise, as prophesied by leading economists, the world is heading inexorably toward recession. And there can’t be a more appropriate occasion to do so than the G20 summit, which brings together the leaders of the twenty most influential countries in the world.
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