Setback

The IMF slashed its global growth projection this year and next to just 3.6 percent. This is nearly a percentage point lower than its January projection and it is almost entirely due to Putin’s war in Ukraine.

To situate this number more dramatically, compare it with the 2021 global growth of 6.1 percent. Last year’s respectable growth number was achieved even as the world struggled with the pandemic – specifically the Delta and Omicron variants that swept across the globe.

The World Bank has an even drearier projection. The multilateral agency slashed its global growth forecast to only 3.2 percent.

The IMF’s projection might even be adjusted further downwards. When it announced its adjusted numbers, the agency underscored the assumptions it made: that the war will remain confined to Ukraine; that further sanctions will not target Russia’s humongous energy sector; and that the effects of the pandemic will continue to wane.

Not much confidence may be invested in those critical assumptions.

There is good and bad news in embattled Ukraine. The good news is that the gallant Ukrainian army appears to have repulsed Russia’s military offensives in the Donbas region. The bad news is that the war will likely drag on without a significant victory by either side.

More disturbingly, Russia is now warning the West that it will attack weapons deliveries to Ukraine. Moscow also threatened to position nuclear weapons close to the borders should Finland and Sweden abandon their neutrality and join NATO. In addition, the way appears to have been cleared to admit Ukraine into the ranks of the EU. All these suggest widening of the conflict Putin initiated.

Early this week, in the light of brutal Russian offensives in eastern Ukraine, France has called on her European partners to shut out energy imports from Russia. Germany, most dependent on Russian energy imports, had been hedging on this call from the start.

Russia earns US$1 billion each day from its oil, gas and coal exports. That money funds Putin’s war effort.

Should France get her way, energy costs are bound to spike across the board, not just for the Europeans but also for everybody else. That will be the price we have to pay to end this unjust war.

Rising energy costs will push up inflation across the board. High inflation, and the monetary measures to fight it, will cut growth for every country.

The outbreak in COVID-19 infections in China tells us this scourge is not done yet. A large portion of this economic superpower’s population is under some form of mobility restriction. Many of its factories are now shut down. This will have serious repercussions across the world’s supply chains.

Therefore, all the critical assumptions the IMF underscored in announcing its adjusted projections indicate that final global growth this year might even go lower. In addition to the factors mentioned above, the loss of Ukraine’s agricultural exports will cause a separate spike in food prices.

While all these are external to our economy, they will affect us nevertheless. We have to carefully plot our own economic recovery with global turbulence in mind.

Policy wonk

I took the trouble Tuesday morning to drive to Kamuning Bakery to listen to Gibo Teodoro. That was worth the drive.

Gibo once ran for president in 2010. Our electoral politics, thoroughly addicted to seeing matinee idols onstage, was not very hospitable to a candidate more disposed to discussing the details of policy issues at hand. Our electoral discourse is constantly reduced to the lowest common denominator.

Today, after over a decade in the private sector, Gibo has reentered political life. He is seeking a seat in the Senate. If he wins, that will, no doubt, raise the average IQ level of this chamber.

It is always rewarding listening to Gibo. I turn out a little more educated each time. He always has a fresh take on old issues and a new approach to problems that confound us.

At the Pandesal Forum last Tuesday, Gibo was at ease discussing everything from the pandemic response to our defense posture to the recovery of our tourism industry.  I can think of no other candidate who can navigate the gamut of policy concerns without tripping.

He will certainly be an asset to the next Senate. It is, after all, the role of that chamber to oversee the whole range of government. It is, in principle, the repository of the nation’s statesmen.

The Senate as a chamber has lost much of our people’s esteem lately. In the past, our people looked to the Senate as a forum where the Republic’s best options are brilliantly debated by the country’s best minds.

But it is never too late to begin restoring this chamber to its institutional mission of being the guardian of the nation’s best sensibility. Getting there requires some rehabilitation of the electorate’s appreciation of the grand role of this chamber.

In the last voter preference surveys I checked, Gibo was a few places away from the win column. He certainly has not relied on scandal-mongering or celebrity endorsements to advance his electoral goals. Not many of our voters know who he is and what value he would bring to our institutions.

I hope, in the remaining days of this campaign, that Gibo will get the endorsements that matter. We will all benefit from his winning a Senate seat. Our policies will be better refined if he plays a role in fashioning them.

Hopefully our electorate will reward serious thinkers like Gibo.