Victor EzejaDirector General of the World Trade Organisation (WTO), Dr Ngozi Okonjo-Iweala, has emphasised the need for a quick resolution of the Israel-Hamas conflict.
She warned that if the conflict escalates across the region, it would have dire consequences on global trade.
Dr Okonjo-Iweala made the call during this week’s annual meetings of the International Monetary Fund and the World Bank in Morocco.
While expressing her optimism for a swift resolution of the conflict, She cautioned that if the conflict were to spread across the region, it could have a “really big impact” on the already fragile global trade flows.
“We hope this ends soon and it’s contained. Our biggest fear is if it widens because that will then have a really big impact on trade,” Okonjo-Iweala said during an interview with Reuters. “Everybody’s on eggshells and hoping for the best.”
The WTO DG raised concerns about how the ongoing violence in the Middle East could exacerbate existing trade-related issues, including rising interest rates, a tense Chinese real estate market, and Russia’s conflict in Ukraine.
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“Global uncertainty is already limiting trade growth, but this would be exacerbated by the sudden onset of war between Israel and the Islamist Hamas group that controls the Gaza Strip,” Okonjo-Iweala noted.
“There is uncertainty about whether this is going to spread further to the whole region, which could impact very much on global economic growth. We hope it will end because it does create this uncertainty. It’s another dark cloud on the horizon.”
The World Trade Organisation, based in Geneva, halved its projection for growth in global goods trade this year due to ongoing challenges such as inflation, higher interest rates, China’s weakening economy, and the conflict in Ukraine.
The WTO’s initial projection in April of a 1.7% growth in the volume of merchandise trade for 2023 has been revised down to just 0.8%.
Looking ahead to 2024, the WTO predicts a 3.3% growth in the goods trade, a figure largely consistent with its earlier projection of 3.2% from April. As global trade faces an uncertain future, the world watches with bated breath, hoping for a swift resolution to the Israel-Hamas conflict and an end to the cloud of uncertainty that looms over the global economy.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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