The Upcoming Hurricane in Global Economy

Talal Abu-Ghazaleh

·      
As I expected in previously
published interviews and statements, the world has entered the phase of what is
known as Stagflation (Stagnation & Inflation), which is an odd and
difficult combination, meaning while there is stagnation in all forms of commercial
activity, either goods or services, their prices remain high, despite the
availability of surplus.

·      
As long as we believe in what we
are informed by the United States of America, as the President of the largest
American bank (JP Morgan) announced that a hurricane is coming after the global
economy and that his bank, as it warns of this, would like to reassure the
American public that it is preparing to face this upcoming change.

·      
What is noteworthy in Jamie Dimon's
statements at a financial conference in New York is the following: "I said
there’s storm clouds but I’m going to change it … it’s a hurricane" and he
advised analysts and investors to stick to very conservative policies. Therefore,
from an honest standpoint, I say, "It is the soundest advice to
acknowledge the existence of the problem and to confront it with feasible
measures."

·      
The US Federal Bank announced
that the program known as "Quantitative Easing" will be reduced
through quantitative tightening to reach $95 billion per month. Jamie Dimon
says, "This is the highest level of tightening that America has witnessed
since its founding, and it is an event that will be documented in the
history books in the next fifty years."

·      
I say this because it would be
wise to acknowledge the truth and work to confront it boldly and frankly. I do
not think that such advice can be described as pessimistic, tarnishing the
economic reputation, or frustrating to citizens, rather, it is a protectionist
approach to what is expected to occur according to all international indicators
and standards that I did not formulate, but studied and analyzed.

·      
We have heard many analyzes in
the media that this expected hurricane, as Jamie Dimon called it, is the result
of the European-American-Russian “Ukrainian” war (my article dated 1/3/2022).
The war in Europe may have its impact, but the fact that the world must
acknowledge is that this situation is the result of unilateral trade sanctions
imposed by countries on each other.

·      
We now live in a world with no
applicable system or respectable global leadership.

·      
I remember that, during my
presence on the WTO Expert Council, we emphasized that any trade sanctions may
only be imposed in accordance with global trade agreements and governed by the
WTO’s legal body, which is an independent dispute settlement body that decides on
sanctions on whoever imposes unilateral sanctions, including paying
compensation for the damages resulting from those unilateral actions. On more
than one occasion, I have warned that the complete neglect of the global trade
system, which all countries of the world have agreed on through global trade
agreements signed by all world governments, will eventually lead to the
destruction of that system until we live in a world without respected systems or
global leadership.

·      
As for the supply chains that I
had the fortune to study during my tenure at the WTO and for which I was alone
on the Expert Council in my opposition to their feasibility because they are
perishable; while we find great benefits in saving the cost of production
through the production partnerships between countries whereby each country
provides part of the components to achieve an integrated quality of production and
its total cost, however, unilateral trade sanctions that one of the partners in
this chain can impose results in paralyzing the entire product. This is what we
see, not only in the current European-American-Russian war but also in global
trade as a whole. Here, I that unilateral sanctions produce negative effects on
the concerned parties and others.

·      
The major powers need to
formulate a new world order.

·      
I think it is my duty to announce
that I look at this situation with positive concern, because positive concern
leads to solutions, as opposed to negative concern. Accordingly, I say that
what the President of JP Morgan called a ‘hurricane’ will intensify, and with
it, the wars will increase in cruelty and will involve larger segments of the
world until the major global players come together and understand that there will
be no victor among them in this third world war led by “China, Russia” and
“America-Britain”, and that they must formulate a new world order from which
new global leadership will emerge. I say this with an appreciation for what America
has done for the world because its acceptance of the new world order is in its
interest before that of others.

·      
The hurricane will only continue
to grow until major powers realize that there can be no victor among them.

·      
I say to those who accuse me of
pessimism and frustration that Talal Abu-Ghazaleh Global is constantly working
on developing appropriate programs to confront the hurricane. I also believe in
the benefits of positive concern that is imposed on us, (and here, I address my
colleagues in our institutions) to always be positively concerned, daily and
constantly, because every stage and every day requires procedures to confront this
hurricane to achieve success. We should not wait for the event to happen, but
rather work diligently to confront it to achieve the minimum losses and even achieve
success as well as benefit from it. I repeat what I always say; that even in
wars and disasters, there are opportunities that can be taken advantage of.

·      
Therefore, in the monthly report
submitted by each of the two hundred activity managers, they should each
exercise positive concern in mentioning the expected upcoming challenges
and present their proactive recommendations on how to address them.