I hope that world pow­ers are look­ing at what the prospect of war in the Mid­dle East is do­ing to stock mar­ket re­spons­es, the price of oil, and the rise of in­ter­est rates with­in the frame­work of a per­sis­tent in­fla­tion chal­lenge glob­al­ly.

At the present time, stock mar­kets are tak­ing a fall, from USA to Eu­rope to Japan and Chi­na, and bond rates are much high­er than ex­pect­ed across USA and Eu­rope.

The Ukraine in­va­sion by Rus­sia raised the prospect of nat­ur­al gas and re­lat­ed prod­uct short­ages, threat­ened a rise in the price of oil, and in­creased the prospect of a wider war in Eu­rope and raised, fright­en­ing­ly, the spec­tre of nu­clear es­ca­la­tion by Rus­sia. But, in the long run, the glob­al eco­nom­ic and fi­nan­cial sys­tem has not been threat­ened by this war.

The Hamas’ sur­prise at­tack on Is­rael, which ral­lied world sen­ti­ment to Is­rael’s side, caused a stir in the world be­cause an Is­raeli re­sponse was in­evitable. The com­pre­hen­sive Is­raeli re­sponse, for a while, raised the prospect of high­er en­er­gy prices, which nev­er re­al­ly nev­er ma­te­ri­alised.

But the in­dis­crim­i­nate bomb­ing by Is­rael and con­se­quent wide­spread suf­fer­ing of the peo­ple of Gaza, cre­at­ed a very di­vid­ed world and un­leashed pas­sion­ate in­ten­si­ty.

When the Houthis, on the heels of Hezbol­lah, en­tered the fray, this brought the UK and US in­to mil­i­tary con­flict with the Houthis, and made the prospect of mil­i­tary al­liance be­tween the UK, USA, Eu­rope, and Is­rael re­al. The think­ing is that ter­ror­ists are not just en­e­mies of Is­rael, they re­main a po­tent threat to the West and to the world sys­tem.

Is­rael’s at­tack on some of Iran’s high com­mand in Syr­ia, drew out Iran, who is back­ing Hamas, Hezbol­lah and the Houthis. Iran’s at­tack on Is­rael elicit­ed a co­or­di­nat­ed re­sponse from Is­rael, UK, USA and Eu­rope.

The world is wait­ing now for a re­tal­ia­to­ry re­sponse from Is­rael, and wor­ried spec­u­la­tion is in the air about a wider war in the Mid­dle East in­volv­ing Is­rael and Iran, two sworn en­e­mies vowed to elim­i­nate each oth­er from ex­is­tence.

Iran’s at­tack on Is­rael was im­por­tant first, be­cause of the num­ber of lo­ca­tions in the Mid­dle East from which mis­siles and drones of var­i­ous types were launched by Iran, but al­so for the co­or­di­nat­ed re­sponse from the West which Iran’s at­tack met. Iran is every­where, but Is­rael is not alone.

Now, the world waits for Is­rael’s next move amidst calls for re­straint.

Mean­while, the price of oil has hit US$90, and eq­ui­ties have be­gun to sag, com­modi­ties are poised to rise and in­ter­est rates are mov­ing up.

The tem­per­a­ture of geopo­lit­i­cal ten­sions, in the midst of the po­ten­tial for a wider war pro­pelled by Mid­dle East­ern con­flict, has been ris­ing as well.

Chi­na has been ac­tive in the Tai­wan Straits and the South Chi­na Sea, as they have been in their air space and al­so ramped up ship­build­ing and in­creased mil­i­tary spend­ing by 14 per cent over 2022 to 2024.

The US has al­so in­creased its ocean and air­plane pres­ence in the re­gion, and have strength­ened mil­i­tary part­ner­ships with Japan, Aus­tralia and South Ko­rea, and are fly­ing B52s across the world. Chi­na re­mains aligned with Iran, North Ko­rea and Rus­sia, but is known to be trou­bled by the Rus­sia/Ukraine war, and very dis­turbed by the prospect of a Mid­dle East con­fla­gra­tion that can draw the big pow­ers in­to war. But leader-to-leader talks be­tween Chi­na and USA have re­cent­ly be­gun, and the bot­tom line re­quest of Xi Jin­ping to Joseph Biden is an agree­ment on “no con­fronta­tion, no con­flict” un­til the end of 2024 be­tween Chi­na and the USA.

But in gen­er­al, the prospect of a globe-threat­en­ing, wider war, makes the eco­nom­ic and fi­nan­cial sys­tem more un­sta­ble and volatile. Chi­na it­self has been liv­ing through a re­al es­tate crash, and is un­der se­ri­ous eco­nom­ic stress as ag­i­ta­tion and rest­less­ness grow in that coun­try. A Chi­na with low con­sumer de­mand, low in­vest­ments, slow­er growth and re­duced ex­ports, and di­min­ished FDI abroad, could not be good for the world econ­o­my.

Of course, when the big coun­tries sneeze, we in Trinidad and To­ba­go catch a cold. With an econ­o­my struc­tured like ours, there is no way that we can be in­su­lat­ed from con­ta­gion. On the oth­er hand, war is a hin­drance to grow­ing pros­per­i­ty and, in­evitably, for the qual­i­ty of life for peo­ple every­where. The mul­ti-lat­er­als should take due note in Wash­ing­ton DC this week. The big pow­ers should pause.