Question

Discuss economic threats to security and how the threats are being addressed.

Answer 1

The global economy faces many threats, but security, or geopolitical risk, is perhaps the most profound; it was a world war, after all, that ended the first great era of globalisation in 1914.Globalisation seems to provoke a reaction because of the changes it thrusts on to the social and economic order. The helplessness recalls the 1930s when the League of Nations, the great hope for security co-operation in the aftermath of the first world war, proved ineffectual in the face of Japanese, German and Italian aggression. Sanctions were imposed after Italy’s invasion of Abyssinia, but in a half-hearted and ineffective manner. Economics plays a part in creating these problems, of course. In the 1930s, both Germany and Japan were keen to expand their frontiers to gain access to resources. The war made nations realise their economies were now dependent on oil and that dragged the Middle East, with its religious disputes, to the forefront of global affairs. Conflicts were manageable during the cold war perhaps because neither Korea nor Vietnam really represented a vital economic interest to America or the Soviet Union. Indeed, both the USSR and China were largely cut off from Western economies. Now that both countries are part of the globalised economy, the potential for clashes has increased; hence the focus on trade at the Sino-American talks scheduled to begin on April 6th.

The World Economic Forum (WEF) issued a list of the biggest perceived threats to world stability. For the first time, economic inequality had dropped out of the top five biggest risks. The list, put together by WEF experts, was headed by war and unrest between states, followed by extreme weather events, the failure of national governments and state collapse, and high unemployment.

The threads are being addressed as:

1. Energy and Environmental Security

2. Conflict and Poverty

3. Competing in a New Era of Globalization

4. Global Imbalances

5. Rise of New Powers

6. Economic Exclusion in the Middle East

7. Global Corporations, Global Impact

8. Global Health Crises

9. Global Governance Stalemate

10. Global Poverty