Dr. Arvind Kumar*
Currently the world is grappling with so many challenges the list is never ending- War, natural disasters, climate change, pollution, resource crunch, inflation, disease and death. Today’s world economy looks vulnerable. It’s still recovering from a bout of inflation exacerbated by Russia’s invasion of Ukraine last year. Another war in an energy-producing region could rekindle inflation. The human costs of this war will be felt not only in Israel and Palestine but also in India by its potential to impact inflation and economic slowdown at a time when the economy has barely begun to emerge from the shadow of the Covid-19 pandemic. Broader consequences could extend from renewed unrest in the Arab world, to next year’s presidential election in the US, where gasoline prices are key to voter sentiment. In all these cases, the direction is the same — more expensive oil, higher inflation, and slower growth — but the magnitude is different. The geopolitics of this region is going to impact the geo economics globally. It has raised significant concerns on a global scale. World Bank president Ajay Banga has labeled it as an unnecessary global economic shock because the conflict threatens to disrupt the positive trends of decreasing inflation and stabilizing prices and wages. The wider the conflict spreads, the more its impact becomes global rather than regional. Instead it’s facing a new conflagration. Russia’s invasion of Ukraine, the US–China trade war and rising tensions over Taiwan show that geopolitics is back as a driver of economic and market outcomes. In the Middle East, it never really went away.
Palestine and Israel conflict has further polarized the world into two camps. Israel and the Palestinian territories are among the most climate vulnerable places on the planet. It is already creating hunger, global warming, pollution and most important of all blatant human rights violation on both sides. All of us are regularly bombarded with news and counter-news about these very big and dangerous things, and the challenges of making this world safer, healthier and more just. These challenges are overwhelming and will have long term effects on the world’s economy, environment and the losing battle we are waging against climate change. India’s stance on the current conflict is clear by Prime Minister Narendra Modi’s expression of deep shock at the attack, and said that India stood in solidarity with Israel. India’s trade with Israel, at about $10.7 billion in FY23, may be seriously impacted if operations at the three largest ports of Israel-Haifa, Ashdod; and Eilat are disrupted. These ports handle shipments in agricultural products, chemicals, electronics, machinery, and vehicles. India’s merchandise trade with Israel happens mostly through the Eilat port, located on the Red Sea. Fortunately, so far there is no report of port disruption. The real impact would depend on the duration and intensity of the war. It could also affect the progress of the India-Middle East-Europe economic corridor by disruption in the normalisation process between Saudi Arabia and Israel, which was a foundation for the corridor. If a country like India has been placed at 111 in the Global Hunger Index 2023 imagine what is going to happen in war torn countries.
Colossal impacts on the world
Like Middle East wars of the past, the conflict too has the potential to disrupt the world economy and even tip it into recession if more countries are drawn in because the region is a crucial supplier of energy and a key shipping passageway. A sharper escalation could bring Israel into direct conflict with Iran, a supplier of arms and money to Hamas, which the US and the European Union have designated a terrorist group. In that scenario, Bloomberg Economics estimates oil prices could soar to $150 a barrel and global growth drop to 1.7% — a recession that takes about $1 trillion off world output. Of course, secondary effects like these aren’t top of mind after the past week’s human tragedy. India may feel the heat in other ways if its assiduously cultivated relationships with the Gulf nations are impacted by unequivocal support for Israel’s war on Hamas and its silence over the targeting of Gaza’s civilian population. Nearly 8.5 million Indian workers in West Asia, account for 65 per cent of all Indians working abroad.
A large majority of the dead on both sides are civilians. Dozens of Israeli hostages have been taken to Gaza. Missiles and a looming ground attack threaten the lives of Palestinians trapped in the enclave with no escape route. The devastation is raising emotional temperatures, and makes military escalation more likely.
The third decade of the 21st century started with a pandemic disrupting our lives and livelihoods. The world had just started to heal from the shocker when came the Russia Ukraine war and now this surprise, coordinated assault on Israel by Palestinian militant group Hamas — one of the deadliest and most brazen attacks in years — brought renewed attention to an old and continuing problem: the Israeli-Palestinianconflict that has vexed the Middle East for decades. The US, the European Union, India and several other countries have all condemned the Hamas attacks on Israel. The US, Israel’s closest ally, has over the years given the Jewish state more than $260bn in military and economic aid, and is promising additional equipment and ammunition. It also sent an aircraft carrier, other ships and jets to the eastern Mediterranean. Russia and China have both refused to condemn Hamas, and say they are maintaining contact with both sides in the conflict. However Russian President Vladimir Putin blames US policy for the absence of peace in the Middle East. Regional powers Iran and Qatar meanwhile are key supporters of Hamas, as well as that of another regional enemy of Israel, the Lebanese Hezbollah movement. Questions have been asked about its role in the recent attacks after reports that it gave the go-ahead for them days before.
Way Forward
The UN Human Rights Council expressed deep concern at how hate speech and incitement to violence have surged since Saturday, fuelling anti-Semitism and Islamophobia in the region and globally. It is evident from bitter experience that vengeance is not the answer, and ultimately innocent civilians pay the price. To address these challenges, it is crucial for both parties to engage in dialogue and find sustainable solutions. Building cooperative efforts to manage and conserve shared water resources, investing in environmentally friendly infrastructure, and prioritizing post-conflict environmental rehabilitation efforts are all crucial steps forward. Furthermore, international organizations, NGOs, and the global community must support initiatives that focus on environmental conservation, restoration, and sustainable development in the region. Everyone is fighting over the land, but if we’re only going to spend our energy on politics, there won’t be any land worth living on left. The Israeli-Palestinian conflict not only exacerbates human suffering but also has significant environmental consequences that must not be overlooked. With water scarcity, pollution, contamination, deforestation, and habitat destruction being some of the key environmental disasters associated with the conflict, urgent action is needed to mitigate these impacts. Incorporating environmental considerations into political negotiations and peace processes will not only benefit the environment but also promote human well-being and reconciliation. By addressing the disasters of the conflict they have to work towards a more sustainable and resilient future for both communities, ensuring that humanity and peace go hand in hand. The world cannot afford more polarization and need to find solutions guided by the full respect for international humanitarian and human rights law.
*Editor, Focus Global Reporter
