Arab Steel Summit

Our economy and the global crises

The global economy has become more intertwined than ever before, and any crisis that occurs in a country or region causes other countries to suffer from its effects. We have also seen what happened to other countries of the world from the outbreak of the Corona pandemic, and how the developed countries paid the price of excluding the largest share of medicines and vaccines and neglected poorer countries, however, the results rebounded on them with new variables, which introduced them into successive crises. Moreover, how countries achieved low rates of Corona cases and deaths, and how their industrial production increased, such as China, but they were affected by the low growth rate in the rest of the world; as well as the decline in its exports demand. As we have also seen that, all countries of the world that depended on the tourism sector have suffered a lot from closures and travel restrictions to other countries. There are many examples of such, so the financial crisis that erupted in the United States in 2007 and 2008 had an impact on the rest of the world, despite being related to granting loans to purchase real estate without sufficient guarantees, which is considered as a local crisis, but the collapse of many banks pushed the crisis to affect the European countries and the third world.

The recent crisis came due to the ongoing war in Ukraine representing one of the biggest challenges and risks to the global economy, as it quickly transformed from its military nature into a wide and dangerous economic war, during which all economic tools were used until it reached the point of preventing Russia’s aircraft from flying over European airspace and vice versa.

This was even preceded by freezing the assets of banks, companies and individuals, preventing exports and imports, excluding banks from the international trading system. As well as a price war, speculation, and creating crises, the most dangerous thing that happened is that it introduced vital sectors for the whole world such as gas, oil, wheat and the rest of the grain.

Besides each party still prepares lists of sanctions against the other side, it will be affected by the results of its implementation, the mere discussion of European countries reducing their dependence on Russian gas and oil had quick and dangerous results on the energy market, and prices rose significantly. In addition to that, fears are increasing that the matter will reach a complete estrangement, and the rise in gas and oil prices to astronomical prices that no one imagined

As we are part of this world, and we import a great deal of wheat and oil derivatives, we will pay our share of international suffering. Despite the fact that we are not part to any battles taking place in Ukraine, which we do not know whether it will be possible to stop its expansion or it will continue to ignite and destroy with planes, missiles, and cannons, or with sanctions, embargoes and restrictions, however, indications do not indicate the imminence of any solution.