How have wars and conflicts shaped global economic development?

Economic destruction: Wars and conflicts can destroy infrastructure, disrupt production, and displace people, all of which can have a devastating impact on the economy. Increased government spending: Wars and conflicts can lead to increased government spending on military and security, which can crowd out other government spending, such as on education and healthcare. Increased taxes: Wars and conflicts can lead to increased taxes to pay for the costs of the war. Reduced trade and investment: Wars and conflicts can lead to reduced trade and investment, as businesses become more risk-averse and consumers are less likely to spend money. Global economic instability: Wars and conflicts can lead to global economic instability

Wars and conflicts can have both positive and negative effects on economic growth. It all depends on the type, duration, intensity, and outcome of the conflict, as well as the initial conditions and policies of the affected countries. There are many factors to consider here, as you can see. Besides the obvious things, like the destruction of physical and human capital, and military spending, displacement of populations and refugees, the negative effects can be the following: Disruption of trade and market access (imports, exports, foreign investment) Insecurity and uncertainty increase (risk of violence, instability, corruption) Erosion of trust and social cohesion, such as the bonds between people, communities, and institutions, and more.

In my opinion, the entire mankind is now in a position where we have so many issues to deal with rather Wars and conflicts. The world is changing day by day so as our entire universe. Thus, the economy has a pivotal role to play in shaping the world for next generations. I agree with the fact that wars and conflicts has a major impact on our global economy but the global leaders can play a big role in helping these conflicts resolution and peacekeeping. This could only be possible when we all agree to the fact that we belong to this planet earth which is only living planet in our solar system and we have to give proper consideration for it.

One observation I've consistently found insightful is the resilience of war-torn nations. However, from firsthand experiences, this resilience doesn't equate to a swift economic rebound. Conflicts create long-term socio-economic impacts. Children in conflict zones face interrupted education, posing risks to our future global workforce. While we can rebuild war-damaged infrastructure, restoring international trust is more complex. With resources diverted to defense, technological innovation suffers. The environmental aftermath of wars is another overlooked cost. In our interconnected world, understanding the hidden impacts of wars is crucial for global stability and progress.

After decades of work on moving towards universal/global pricing, regional or global conflicts construct a rationale for differentiating pricing, supply alongside administer the flow of capital. Decades of work done by WTO to achieve better global economic outcomes stands at reversal. Other than the direct economic impact and in order to sustain growth bilateral conversations along with participation in active trading blocs remains imperative during such times. Since capital flow is also restricted, sovereign economic policy gains prominence for shaping economic and social growth.

Wars are very expensive enterprises. The US invasion of Iraq in 2003 for instance Cost the global economy $6 trillion according to my calculations. On the other hand, Nobel Prize Winner Professor Joseph E. Stiglitz estimated them at $3 trillion in his book titled: The Three Trillion Dollar War". The difference between me and him is that I included in my calculations the impact of the rise of crude oil price from $30 a barrel before the invasion to almost $100 after on the global economy in addition to the destruction of Iraq's oil industry. He only included the costs of the war to the United States. Dr Mamdouh G Salameh International Oil Economist Global Energy Expert

From my readings, there's a perspective that wars can be a catalyst for unforeseen progress. However, having delved deeper, I've found the reality to be multifaceted. Wars, undeniably, have driven technological leaps; think of the Internet's military origins. Post-conflict scenarios also often carve out new global trade avenues and foster robust diplomatic ties. For instance, the Cold War tension indirectly fueled the space race, propelling technological advancements. However, while these economic and technological gains are tangible, it's paramount to juxtapose them against the intangible human costs and ethical considerations.

As the saying goes, “never waste a crisis”. History has been a witness that when the human race has been pushed to make amends, innovation has been at its peak. There is opportunity in such periods to change the paradigm and build a geographically balanced, equitable and sustainable society.

Wars and conflicts have had significant impacts on global economic development throughout history. 1. Destruction of physical infrastructure 2. Disrupt trade and create barriers to international commerce 3. Diversion of resources toward military expenditures 4. Displacement of populations and the creation of refugee crises 5. Technological advancements and innovations driven by military needs

On the positive side, wars and conflicts can also lead to: Technological innovation: Wars and conflicts can lead to technological innovation, as governments and businesses invest in new technologies to win the war. Economic growth: Wars and conflicts can sometimes lead to economic growth in the short term, as governments and businesses spend more money on military and security. New markets: Wars and conflicts can sometimes lead to the opening up of new markets for businesses.

War and conflict have impacted the way states regulate their economies, with fragile and conflict-affected states lacking proper mechanisms to control economic activities. Policies such as taxes, subsidies, import quotas, and tariffs are introduced to stabilize and protect domestic economies. These tools are essential for economic reform in stable countries with functioning institutions. However, in many countries like Somalia experienced war and conflict economy in the absence of government economic governance, traditional Xeer law plays a critical role in facilitating trade in a stateless economy. The effectiveness of a stateless economy and alternative mechanisms for economic governance remain a question and many others.

Reflecting on historical precedents, I've often pondered the saying, "from ashes rise new beginnings." Yet, the aftermath of wars presents a dual-edged sword. While post-WWII Europe saw the Marshall Plan fuel economic recovery, many African nations, mired in conflict, face stunted growth. Wars can spur technological innovation and open avenues for reconstruction investments. But juxtaposed is the lost human potential and infrastructural damage. This duality underscores the unpredictable economic dance of war and peace.

The adage of growth has been a percentage but in my opinion growth is a relative word. To say X% of growth is good, bad or ugly depends on global growth and whether the country is adding or losing share of the pie. Example: If a country has 4% growth when the world is stagnated, it means that the country is gaining a larger share of global commerce. The same 4% growth is not noteworthy if the world is also growing at ~4%. Economic growth is relative to a region/globe.

It is no coincidence that most major wars followed periods of very deep economic depression in the world. Wars tend to stimulate the economy increase employment and sharpen innovations. However, the damage they inflict on humanity and the global economy and the misery they bring to the world outweigh such ill-gotten advantages by a very long shot. Dr Mamdouh G Salameh International Oil Economist Global Energy Expert

Sometimes wars can have a positive effect on growth by stimulating technological innovation, industrialization, and institutional reforms, especially if the conflict is short-term and ends with 100% victory. Let’s take the US Civil War and World War II: they are often mentioned as the periods of accelerated economic development of the United States. On the other hand, such turbulent periods can have a negative effect on growth by destroying physical and human capital, disrupting trade and financial flows, increasing public debt and inflation, and creating political and social instability. And again an example here: the Syrian Civil War has resulted in a loss of GDP of over 60% and significant displacement of more than 50% of the population.

Drawing from historical narratives, I've discerned that wars often act as unpredictable tide-turners for global trade. For instance, the Suez Canal Crisis in the 1950s disrupted a major trade artery, reshaping global shipping routes. On the flip side, post-conflict eras like after WWII saw the establishment of the General Agreement on Tariffs and Trade (GATT), fostering multilateral trade cooperation. While conflicts might birth new trade dynamics or push for technological adaptations boosting competitiveness, they simultaneously pose threats to established trade networks and induce economic isolationism. Thus, the interplay between conflict and trade is a complex ballet of disruption and evolution.

Historically trade was regional and with the advent of improvements in transport, trade became intercontinental. Then came the imperial rule which lasted a few centuries. Irrespective to the place of trade it was all Europe denominated. Implying that a trade in Asia would still be attributed to an European country. Fast forward to the last century, sovereigns traded amongst each other with the moving fleets and in land infrastructure being collectively owned. Over the last couple of decades, individual countries have started to build economic and military presence in strategically important locations. With commerce and S-chains in the background, larger countries are extending the colonial mindset with an adopted approach on trade.

Here the impact is twofold as well. While creating new markets, opportunities, and alliances, especially if the conflict is global or regional, we can see some trade increase. But imposing barriers, sanctions, and boycotts, especially if the conflict is bilateral, the effect on trade is negative (e.g. the war in Ukraine).

One area that is often overlooked is the catalytic impact of the language of the victors in driving trade. An obvious example is the English Language which has served as an enabler for trade for former British colonies but also as a driver for American influence on global trade. This linguistic benefit is clearly asymmetrical in favour of both British and the US goods and services relative to the former English-speaking colonies (with identical parallels for Spain and France and their colonies), but that is secondary to this discussion. Closely tied to this is access to university-educated English-speaking talent from those former colonies. This talent also drives demand for goods, services and intangible financial assets such as music.

There is no doubt that wars do affect global trade by changing trade routes, volumes and costs. A case in point is the Ukraine conflict and its impact on global energy. The conflict has caused a shift of Russian oil and gas exports from west to east meaning from the European Union (EU) to China, India and the Asia-Pacific countries. So instead of the EU receiving Russia's cheap and plentiful piped natural gas, it was forced to buy American LNG supplies at prices 3-4 times higher than Russia's piped gas. This has had a disastrous impact on the EU economy which is projected to grow this year at an anemic rate of 0.8%. Dr Mamdouh G Salameh International Oil Economist Global Energy Expert

From my studies, the phrase "necessity is the mother of invention" frequently emerges in the context of warfare. The Cold War, for instance, saw a surge in technological advancements like the Internet due to defense imperatives. However, it's not a one-size-fits-all scenario. While challenges posed by wars can indeed spark unprecedented innovations—think of the medical advancements during WWI—they can simultaneously stifle civilian R&D due to resource allocation to defense. Moreover, while war-induced urgencies can break bureaucratic shackles, accelerating innovations, they can also lead to brain drain or limit global collaborative efforts. Wars, thus, cast a dual shadow on the landscape of innovation.

To not repeat the phrases, wars and periods of conflict change the status quo resulting in forcing to think out of the box. While innovation comes in various forms, the concept of money changed the thought process forcing people to think within the box. With bilateral barter trades starting to happen, the money concept box is starting to see some cracks. The result is the sowing of controlling money transfer platforms and maintaining a synthetic market (fx) for trade which didn’t quite tie back to the value purchased or sold. If similar innovation can be found then it should lead to a much fair world in times to come.

Wars and conflicts can foster innovation by increasing the demand for new technologies, products, and services, especially if the conflict is long-lasting or very intense and severe. World War II stimulated such innovative technologies as radars, jet engines, nuclear weapons, computers, etc. But of course, military spending and the reduction of human resources hinder innovation.

While wars maybe increase inequality (or be caused by inequality itself), post-conflict societies present unique opportunities for social and economic reform. Understanding how conflicts impact inequality can inform policymakers about the vulnerabilities and needs of marginalized groups. Thanks to a globally connected society, now more than ever we can actively participate in helping push for inclusive policies and initiatives, we can help rebuild societies with greater focus on equity and resilience.

Wars and conflicts can have long-lasting effects (either positive or negative) on economic development, long after they end. Some countries may experience a kind of a “peace dividend” after a conflict ends, as resources are reallocated from military to civilian purposes, trade and investment resume, and institutions are reformed. In that case, the countries enjoy rapid economic recovery and growth. Other countries may face a “conflict trap” after a conflict ends, as they remain vulnerable to relapse into violence, stagnation, or fragility. As a result, such countries may suffer from recurrent civil wars, coups, etc.