The effect of inflation on the economic growth and sustainability in emerging economies is gaining interest after the COVID-19 pandemic and the Russian-Ukraine war. There have been numerous restrictions to Russia and the effect is being felt by all, especially the emerging economies who mostly rely on import.
The war should end as soon as possible. It is affecting sustainable growth.
And Covid should come to an end as soon as possible!? That's probably too simple! Openness and participation in the process of globalization have paid off considerably for many countries in recent decades. However, too little attention was paid in the supply and production chains to whether the near monopoly position of some countries (especially Russia and China) did not entail the risk of political blackmail. You will have to pay much more attention to this in the future in order not to become a victim of blackmail. So, diversifying supply chains to break dependencies will be a key factor in achieving sustainable growth.
China has created a winning formula. Namely, 1. A competitively pegged exchange rate with the dollar in the financial market.
2. A focus on manufacturing competitive products in the goods market.
China's inflation has remained relatively modest in these times mostly because with such large trade surpluses, imports remain relatively cheaper. By and large what I am saying, this western fascination with free-market, deregulated systems is highly susceptible to volatility in times of supply and demand shocks. Its high time the world awoke from the oversold American dream.
Oh yes, the Chinese model, formerly referred to as state-monopoly capitalism by the German left, has had a successful economic outcome. However, the cost to the Chinese people is that they have to eke out a living under a strict dictatorship with tough personal surveillance using the latest technology. I much prefer the American and European model of free and open societies, which, however, also have their problems!
The question is about which is the way towards sustaining economic growth in these times of the filthy Russia-Ukraine war. I am not into geopolitics but I am led to feel that this is again yet another situational example clearly emphasising the wisdom and correctness of nations always maintaining multi multilateral business relations with not just one or two suppliers for anything.
Taking wheat for example the situation (pre-start of war) was allowed to grow into one where many countries allowed themselves to become next to totally dependent on supplies from only Russian and the Ukraine. And experience is now showing how bad a trading policy that turned out to be.
It's the old adage of "never putting all eggs (being these imports or exports!) in one basket.
John Consiglio
The University of Malta.
In fact, in the post, Covid 19 and Russian-Ukraine war commodities prices continuously rose. This increment in the price of goods and services became a severe problem, especially in less developed countries. To overcome this problem and stabilize the economy, the government must plan short and long-term development programs and subsidize manufacturing industries and the agriculture sector to produce more. Consumers also must adjust their consumption patterns from time to time.
Dear Professor Petersen,
Dear collegues,
The economical growth of the developing countries (GDP) is really interesting after the Covid-19 pandemic and during Russia-Ukrainian war.
the economical growth of any country is affected differently from endogenous and exogenous factors. For example, Georgia During the year 2022, in January-April GDP growth was 10,5%. And this process took place while Georgian foreign trade import is nearly 70%.
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