International institutions have long analyzed the global and regional risks that affect and will affect the world economy and global trade. Until 2020, global climate change was the number one risk in global analyses, while the second and third on the list were cyber security and geopolitical instability. The threats of a possible global virus pandemic ranked eighth, and new security-related threats ranked ninth. The two topics that were at the bottom of the global threat rankings happened one after the other: COVID-19 and the Russia-Ukraine War, two 'black swans' that shook the world economy and global trade.
Today, the crisis in the Middle East, rising tensions in the Asia-Pacific and the Russia-Ukraine War are the top three threats to the world economy and global trade. The deepening international and regional conflicts also threaten the course of global commodity prices. Therefore, the range of fluctuations in global energy prices, precious metals prices and even agricultural products and food prices may widen. This is precisely the point that puts the world's leading central banks in a dilemma.
Should they adopt a new course in monetary policy to counter the negative impact of international and regional geopolitical threats and uncertainties on production, trade, exports and investments, or should they remain cautious in the face of a global inflation bubble that could re-accelerate? From Keynesian to neoliberal, opinions will, of course, differ. After all, in the analysis of global risk headlines, the threat of global inflation and the threat of a tightening in the supply chain go hand in hand in the current geopolitical environment. The serious volatility observed in international markets over the past ten days is a distant memory when compared to other risk headlines.
However, the real threat between now and 2030 is geopolitical fragmentation exacerbated by the shaken credibility of multilateral international organizations. The lack of trust among the world's leading economies is not only crushing the hopes of finding solutions to global problems together; it is also intensifying the search for 'protectionism' as an aggravating problem. The rise of protectionism is the biggest threat to global trade. Therefore, restoring mutual trust among leading countries and strengthening the prestige and credibility of multilateral international organizations are the most crucial issues for the next five years of the world economy and global trade. Otherwise, we risk a very dark global economic outlook in 2030. If that future materializes, how will the world economy find sustainable solutions to the global debt vortex and the climate crisis in 2030? It is not even possible to think of sustainable solutions to the threat of cybersecurity, exacerbated by developments in the field of artificial intelligence, which even the governments of leading economies do not know how to regulate, or to the possible effects of global migration and aging on global population and employment.
