Important institutions of the global system are trying to create medium and long-term solutions and responses on very important topics. However, it still seems very difficult to find solutions that hit home, as the two “black swans”, the coronavirus pandemic and the Russian-Ukrainian war, still leave many uncertainties hanging over them. The term “black swan” is defined as an event or process that causes irreversible and radical changes in global economics and politics. The first is the course of novel coronavirus variants. Will there be a new wave of high cases which will again negatively impact the global supply chain and safe travel conditions internationally?
Second, how long will the risk of global inflation, including rising global commodity and energy prices, triggered by the two black swans last? Third, as the pressure on global inflation continues, to what extent will the propensity of central banks to tighten monetary policy to halt rising inflation aggravate the risk of recession domestically and world? Fourth, could the risk of a global recession exacerbate the already existing problem of unemployment and slack, when many traditional sectors have yet to fully recover from the pandemic?
Fifth, if the risk of a global recession negatively affects exports and especially the tax revenues of countries, how to manage the spiral of global debt, which is already causing serious concern? While the rising global debt spiral is compounded by rising interest rates for global borrowers, the possible loss of public and private sector revenue and turnover caused by the global recession will cause- Are there new and deep problems in servicing and repaying debts? Sixth, how will the global risk to food security caused by the Russian-Ukrainian war be managed, and how will this process be managed if it causes a serious migratory movement in geographical areas likely to face at risk of hunger, particularly in Africa?
As you can see, even debates sparked by global climate change, vaccine issues, energy transformation, and digitalization are currently overshadowed by these six topics. Under the fifth issue mentioned above, the higher interest rate bonds issued and to be issued by the country’s treasury to finance government expenditure/support to reduce the negative effects of the two black swans on savings also revived the risk of the private sector crowding out effect, which was a chronic problem of the 1990s. What a strange world that we need global dollar liquidity to heal the wounds inflicted by two black swans, so that at the same time we need to reduce the risk of global inflation.
With the negative main effects and aftershocks of two black swans, are we entering a longer-than-expected recession? Are we talking enough about the change in consumption patterns and consumer priorities in daily life caused by the coronavirus on a global scale? Can we adequately discuss on the world’s busy agenda the risk of potentially entering a multifaceted and long-term global recession, which will result from the inability of conventional sectors to find jobs on a global scale and which become insignificant even though they don’t deserve it? I hope it won’t go unnoticed.