Three Reasons Why G7 Nations Are Worried About a Global Economic Crisis
There is a real possibility that the world will face a global economic crisis on June 26, 2022. The G7 nations are concerned about the global economy, especially because of the impact of high fuel and food prices. While this has already happened in countries like Zimbabwe and Venezuela, this scenario is not a foregone conclusion. Here are three major reasons why G7 nations are worried about this date.
First, there is an unrelenting conflict in the Horn of Africa. While the crisis in Yemen has abated, the prevailing security and humanitarian situation in the Horn of Africa remains a major concern. Terrorists and armed conflict threaten democratic reforms in these countries, while climate change affects the region’s well-being. And a global pandemic of COVID-19 is a concern, as it will have negative effects on health capacity building efforts.
Aside from promoting humanitarian aid for struggling states, the G7 should also encourage the use of special drawing rights for countries that cannot afford their own debt. These SDRs are supplementary international reserve assets designed to preserve liquidity in the global economy. The G7 should take this issue seriously. In addition, the G7 should promote the use of the IMF’s Special Drawing Rights, a supplementary international reserve asset.
The world economy was already in a dire state before the Russian invasion of Ukraine, and the war has only worsened this situation. The G7 leaders are worried about this situation because they believe that there is a global economic crisis ahead. If sanctions do not help, it will create a crisis that will hurt the economies of the G7 nations. So, it is vital to make a decision on the future of the world.
While the G7 leaders should be able to come up with a clear message for the world, they must also do so with respect to Ukraine. Some Western politicians have speculated that the G7 may become more powerful in years to come and serve as a forum for the U.S. to work out its problems. Nevertheless, the G7 should avoid positioning themselves as an anti-Russian and anti-Chinese alliance, as it could alienate the non-Western nations that triangulate between the G7 and Russia.
The US President Joe Biden arrives with State Premier Markus Soeder, and German Chancellor Olaf Scholz welcomes the G7 leaders to Munich, Germany. Although the G7 summit is being held against a dark backdrop, the war in Ukraine is already making the G7 leaders nervous about the global economy. It is also the first time that the G7 leaders have met before the onset of the COVID-19 pandemic.
The G7 nations must show that they are listening to other countries’ concerns and responding appropriately. Although Ukraine consumes most of the attention of Western capitals, there are still many issues facing other countries in the region that need urgent attention. In the meantime, efforts to resolve other conflicts and mitigate suffering remain on the agenda. A crisis on Ukraine and Syria cannot wait until June 26. But they must act on these issues before the world can truly stabilize itself.