Introduction –
The Globalization and the Capitalist democratical system of the ruling state is still not perfect model, the Covid-19 pendamic hamper the world earlier economically very badly. The Russia Ukran war, Covid-19 pendamic, Geopolitical disputes between developed countries and developing countries is the another reason of 2023 recession.As per the World Bank report on 15th September 2022, observations that all the major countries central banks increasing interest rate very frequentely which is a sign of recession in 2023.
So in this article we try to observe the pattern of recession and various aspects of the cause of recession in the world. Those countries who are stronger economically sustained themself in this situation but it is very difficult time for developing countries and poor countries of the world. The World Banks earlier shows their fears on hunger situation in these countries after uncontrolable inflation.
We cannot just analyzed the economy with only one prospective so we try to check the deplomatic success of the various countries through the International platform. Because America and European countries always profiting the economic crises in the past specially by America. European countries consumed the wealth of the world through colonization and USA by capitalism and wars.
What is Recession ? –
In the time of recession people lose employeement, Inflation rises continuely morethan three quarters of the year and GDP drops in this period. In 1974 economist Julius Shiskin set a new criteria for defination of recession i.e continueous two quarter GDP declines. The growth of any state or Country depend upon the production of that countries, if that falls the employeement affects and if sales affects due to prices (Cruide oil, natural Gas,Iron) of production cost increases the inflation becomes uncoltrollable with unemployeement.
After Globalization and technology revolution in the world no country remains seperate from the other, Every country in the world depends on the other by some other import therefore if recession comes in one country it affects the other like domino effect. and whole world suffers the recession. This comes under natural recession very rarely but by the economic model of capitalist structure and geo-political effect of the world.
Most of the recession looks like artificial than natural in nature, the facts behind this conclusion is because cruide oil politics we have seen earlier by 50 years. After the end of World War-II we have seen the proxy war nearly above 50 years between Russia and America.This is not the political article but economy and recession are more influence of geo politics of the world therefore we have to discussed the background of recession.
History of Recession ? –
After the World War-II America become the super power of the world arena replacing the Great Briten due to their defence producer Industry profited by world wars. The Europe and their colanies suffered depression after World War-II but America become super power. The formation of the United Nation America influenced most of the organ of the organization and after controlling oil economy they become more stronger with establishing US Dollar as a International trade currency.
Even though America is the biggest economy in the world but still they suffered 14 official recession and their capitalist model established through out the world with Globalization which means if one country having recession it was affected the others also like domino effect. The Europe and America benefited the most natural resources of the earth through colonization and capitalist democracy model(Globalization) Between 1960 to 2997 21 advanced economy of the world faced recession approximately 10% period of this time.
Srilanka and England have the latest example of recession crises faced and most of the European countries having unemployment and inflation problems including super power of the world America.Industrialization produced large scale produce system which makes recession period cycle between the decades. As per the World bank report most affected countries in the recession period in past was poor countries and after that developing countries where uncontrollable inflation creates panic in their economi and starvation problems increases. In the developed countries people only loses their financial status but other poor countries affected the most by recession.
How 2023 Recession Impacts on the Global Economy? –
As we know that Globalization policy accepted by most of the member countries of the United Nation which means every country has trade between other country and dependancy over eachother is there as earlier there was no such things like International trade as freely as today we have seen. So One Country economy colaps it affects the others also. Covid-10 pendamic hit the growth of world economy very badly because of lockdown situation.
The Russia Ukrain war also the another important reason of recession because most of the countries dependant on Russia and Ukrain on Import of food and natural resources. As we have seen the European countries like Germany are dependant on Russia for their gas requirement is concerned which is affected by this war. Another reason of recession in 2023 will be that Saudi Aribia is the major exporter of oil and member of OPEC who stragetically influenced by Russia to offend against America diplomatically.
Therefore where the World Bank declared the GDP of the world corrected regularly due to symptoms of recession period in 2023. We have seen the crises in Srilanka where we ignore it by saying that it is developing country so this crises will be faced most of the poor and developing countries after pendamic.As far as India is concern we have affected by inflation rate increase with unemployement rate. As per the United Nation Conference on Trade and Development (UNCTAD) the India’s GDP affected by 7.8% than England’s GDP 6.8% which create political instability.The world economy has total loss since 2016 was nearly about USD 17 Trillion, which is 20% income affected by the recession.
Recession Crises in UK Economy –
The British Prime Minister resigned after 45 days office because of failure of settling the economic crises in England, She was came with policy of tax cutting and controlling the inflation but common citizens of England went against this policy. Which they presumed that this policy is in the favour of rich people of England which sooner he reversed the decision but it was too late.
The United Kingdom has presumed declined of GDP AT 2023 will be 6.8% which will be lesser than the India’s presumed GDP decline but their political awareness and opposition parties took pressure on the Prime Minister to resigned the post for responsibility of failure in economic instability in England. The Recession situation is facing every country of the world but we have seen the unstability in the United Kingdom politics because of it is oldest democracy where citizens are more aware of their rights to agitate.
The United Kingdom loss their supremacy after the World War-II where war againstt Germany completely destroyed their economy and damaged their colonization structure. In 2016 United Kingdom diceided to exit from European union which is called the Brexit which affect their economy by 1.2% to 4.5% GDP loss and 1% to 10% per capita income hamper by this decision of UK.The migration of the people of European Union became reduced after Brexit which affects the services in Briten which is another reason of recession crises.
Recession Crises & Impact on Indian Economy –
When Recession hit America earlier in 2007-08 every body worried about affect of that recession on India but India survived that recession period. Indian peoples have a habit of savings which is lack in Europe and America so any recession India will have the potential of facing it very well. The World Bank worried about the people who lives in developing countries and poor countries when recession hit these countries because inflation creates hunger situation so it is concern to the World Bank.
As earlier we have given the data of GDP loses where India has more damage than United Kingdom which is worried point for Indian Economy. As Covid-19 pendamic affect every country of the world but India has more affected due to unorganzed secotor is more than 90% so migration from major cities to their villages were higlighted by the social media globally. Therefore it scares more if 2023 recession affects the Indian Economy. Because it is already we have seen the inflation increased drastically with unemployement rate is increased.
We have seen the economical crises in Srilanka, Somalia, Laos which worried point to the World Bank and International Monitary fund organization. Every Country try to reserve US Dollar as a security for buying things Internationally India has a reserve remains 9 months earlier it was more than 12 month. More debts, privatization, Global trade, makes economy more favorable to America and Europe rathar than India. The capitalist model of democracy is not the perfect model in the world which needed much improvement and India also have to consider this things.
Geopolitical Reasons of Global Recession –
There is International currency in the world i.e. US Dollar after dominance of USA on oil supply which has affected after Russia Ukran war because all the countries of European Union and America tries to seperate Russia from the world as a Villain through media but one side they strategically isolated Russia from the world and mainly from European Union. Which was not like by Russian Government and they also made the counter strategy to destroy the monopoly of America towards OPEC and major suppliers of oil resources.
The most of the Gulf countries suffering internal civil war which is conspiracy of world dominance strategy by super power to maintened their supremacy. The pendamic period also criticized by some thinkers that most of the countries not handle it properly and there is some hidden conspiracy theory speculation ran through social media.The main stream media and the United Nation denied these theories but now we are facing recession in 2023 which has one of the reason of recession.
Earlier most of the countries printed currency with substituting gold but now most of the countries break that rule and print money without support of any physical value. The digital money make it more difficult to represent paper currency with virtual money i.e eletronic form of money.Accesive printing of money by any country is cause of inflation in that country. America has different senario because their currency is International currencyy which every body want to reserve in their country for International trade. The one of the major reason of inflation and recession in the world.
Features of Global Recession –
- The Covid-19 pendamic came with affecting the growth of world economy after that every thought that economy will be recovered but Russia and Ukrain was more hampered the economy and now the World Bank, IMF pridicted that world will see the recession in 2023.
- Recently Srilanka and United Kindom suffered with great recession that affect inflation and unemployment.
- The United Kingdom has changed the leadership between this econimic crises and the new Prime Minister Rishi Sunak taken charged which is very difficult time for them to recover their economy.
- India is also having great inflation and unemployment problems dealing with and now predicted with more than 7.8% GDP loss in 2023 with the survey Report of the United Nation Conference on Trade and Development(UNCTAD).
- Brexit policy of the United Kingdom hamper more to their economy than Covid-19 pendamic because accebility of skillfull employment easily available before Brexit but it was very difficult for their economy.
- America also facing the recession with unemployment and inflation situation which affect the whole world due to their International currency.
- Industrial revolution and mass production is the root cause of continues recession after particular times world facing after 19th century till now.
- After formation of Globalization and technology revolution in the world every country is depend upon each other so if recession affect any of the country it affects whole like domino effect theory.
- OPEC recently dicided to reduce their production which also affect the global market and specially America where Saudi Arebia is the main reason of this decision.
- Symptoms of recession is GDP drop continuesly above two quarter of the year, hike in inflation, increasing interest rates, unemployment etc.
Critical Analysis of Global Economy –
As per the World Bank Report and IMF all the central bank of the various countries increasing their interest rates regularly to control the inflation. But if that not work in any country then it affects whole corporate sector and the Government also because those Governments requires debts which is cost them more which creates more problem for their economy. There is not just interest increase solve the problem of unemployment and inflation contol because there is few another serious problems affect the economy.
America is the major country of the world where recession could have been start because they have the world’s biggest economy so recession start from them and that start already from now but its serious affect we can see at the end of 2023. As per economy experts Roubini’s prediction is made by them that stock market may lose 40% growth from the recession. When inflation and unemployment comes together it will be called as the stagnation period where only increasing interest rate is not enough to solve the problem.
The deglobalization, protectionism, revokation of manufacturing plants from China creates cost of production value increase problem, most of the developed countries population having more age than productivity requires, migration restriction policy of most of the countries, climate changes which affects the manufacturing plants, Covide-19 pendamic and most important war between Russia -Ukran These are the impacts of recession over the world in 2023. Those countries who survives from this situation will be of lesser debts and habits of saving combination.
Conclusion –
As we have seen the most of point of views towards world recession problems in 2023 which given signs of it through inflation and unemployment in most of the countries in the world. As we have discussed that todays capitalist democratic model is not perfect as we consider and it requires lots of improvement. Because interest of the few peoples creates problems in one day and its affects the whole economy with wrong objects of policy making.
Here we have seen the global problem of recession and the history of recession through Industrial revolution and technology revolution where we came to the world of globalization. Where every country is depended on each other through trade or services. But ambitions of some powerful countries hamper the peace and humanity which last in to the crises of economical recession.
The centralization of wealth to worlds few people is the real problem of economic crises we have regularly facing from recent years and todays inflation crises of the United Kingdom is comes after 40 yrars. Which shows that how they affected by the policy making and protectionizm decisions taken by the government. So the Srilanka affected with political change and economical change both with together as we have seen with leadership change in England.
