Pointing towards the ongoing Israel-Hamas war and Ukraine conflict, External Affairs Minister S Jaishankar said that these conflicts have emerged as a key contributor to global volatility and the consequences are visible beyond the immediate geography, adding that the prevailing situation in the Middle East is still “not entirely clear”.
Emphasising that terrorism has long been practised as a tool of statecraft, Jaishankar said that any expectation that conflicts and terrorism can be contained and their impact is no longer tenable.
Speaking at the Kautilya Economic Conclave, Jaishankar said, “A second contributor to volatility is conflict in a globalized world where consequences spread far beyond the immediate geography. We have already experienced this with respect to Ukraine. The ripple impact of what is taking place right now in the Middle East is still not entirely clear… In different regions, there are smaller happenings whose impact is not inconsequential…”
“There is also the less formal version that is very pervasive, terrorism which has long been honed and practised as a tool of statecraft… Any expectation that conflicts and terrorism can be contained in their impact is no longer tenable,” he added.
Highlighting that no danger is too distant anymore, Jaishankar said, “A big part of this is clearly economic, but do not underestimate the danger of metastasis when it comes to radicalism and extremism.”
He further said that the position of India is currently far better today than it was before. “… There has been a lot of evidence to show… that we are far better off today than we were a decade or 2 or 5 before. Because every set of solutions throws up a new generation of problems. We constantly dissect, analyse, debate, and sometimes even agonize,” he said.
“The really good people in my business also imagine, anticipate, and foresee… We need both an evolutionary approach as well as audacious thinking… The reason for that is the churning on multiple fronts that the world is going through…,” he added. Jaishankar further stressed on direct disruptive impact of climate change on the international economy, as well as the concerns of the global economy.
“We have long debated that climate challenges as a trend undermine the well-being of our planet. However, as weather patterns shift, they can affect the loads of production as well as the supply chains that emanate from them. Given the increasing frequency of such weather happenings, this is now a risk that we need to build into our calculations,” Jaishankar said.
He added, “The working of the global economy has itself added to the concerning side of the ledger. The last few years have witnessed rising debt often resulting from a combination of imprudent choices unbiased borrowings and opaque projects. Market volatility has been difficult for smaller economies with a narrow trade basket to handle. Those highly exposed to tourism or remittances have experienced the consequences of slowdowns very strongly. International financial institutions have not been able to respond adequately, whether due to paucity of resources or lack of priority”.