Combatting the Global Economic Crisis

The growth of the Indian economy is being adversely affected as a result of the global economic slump. The German economy, which is the largest in Europe has slid into recession after two consecutive contractions. Economists have identified rising gas prices caused by the ongoing Russia-Ukraine war, as the main reason behind the economic crisis. Other European countries may face similar conditions in the near future if peace does not soon return to Eastern Europe. On the other hand, the US economy is also losing steam and may tip into recession soon. Reports coming out of China are also not encouraging as it is showing a downward trend. Among top nations of the world, England is slightly better placed as it may not go into recession in the ongoing fiscal.

Undoubtedly, India has every reason to worry about the global economic scenario as it will adversely impact India’s export market. Estimates predict that India’s export may contract about 12 per cent, if the global economy does not show any signs of recovery, which will have a big impact on India’s growth prospects. Thus, a contingency plan is required to keep the country’s economic growth rate intact. Some out of the box ideas should be encouraged instead of harping on about traditional ones, the world and its requirements are both fast changing. Acknowledging these changes, India should change its focus on export to minimise the potential damage. An option could be to focus on the IT sector as export of computer hardware may be a good option in this troubled time. Simultaneously, India should work to establish itself as an alternative supply hub to keep the economy going.

Along with adequate economic measures, there is an urgent need to expedite political and diplomatic efforts to safeguard the world economy. Countries should put pressure on both Russia and Ukraine to end the war at the earliest. While the west should stop sending military aid to Ukraine, countries like China and other Russian allies should press upon Russia the futility of war. In today’s world, the affects of war are far reaching. The present economic situation of Germany is a clear example of how other countries get affected by war. When gas was supplied by Russia, the German economy was going strong. But it has slowed down as the country has had to depend on alternative energy and high price gas sources as a result of the war.

It is time for us all to realise that war will never bring any solution to problems, but rather compounded them further. The world is yet to overcome the setbacks it suffered due to the pandemic and the war has further worsened the situation by preventing the return of normalcy. India should use its G20 presidentship to bring the warring sides to the negotiating table and aid the world in preventing further catastrophe. Peace must prevail in order for the global economy to regain its health.