WASHINGTON, D.C.—The world economy is feeling the impact of what analysts call the most shocking experience ever in relation to energy issues, resulting from the war by the U.S. and Israel on Iran. The war has brought about a financial catastrophe that affects the poor and stifles the growth of developing nations.
New reports from the International Monetary Fund (IMF) and the Center for American Progress (CAP) confirm that the war has not only claimed the lives of thousands but is now strangling the global growth that many nations were counting on for survival.
According to the IMF’s latest World Economic Outlook, the global growth forecast has been slashed to a mere 3.1%—a figure corroborated by concurrent reporting from the New York Times. While these numbers may seem abstract to some, they represent a tangible loss of opportunity, jobs, and stability for billions.
“Absent the war, global growth would have been revised upward,” the IMF stated. Instead, the world is facing what economists call a “severe scenario” in which damage to energy infrastructure could cut global growth to a staggering two percent, plunging entire regions into a deep recession.
There are concerns that the impact on emerging and developing economies will be twice as severe as that on advanced nations. In Sub-Saharan Africa, where nations were already struggling with debt, growth forecasts have been cut to 4.3%, leaving little room to fund healthcare, education, or infrastructure.
At the center of this economic storm is what some critics call a strategy of starvation, taking hold following the effective closure of the Strait of Hormuz. At Final Call presstime, Brent crude oil prices were surging past $114 a barrel, driving the cost of living to a crushing new burden.
The CAP report, “The Human and Environmental Costs of the War in Iran,” released in early April, highlights how the U.S. blockade and the attacks have turned energy into a weapon.
This energy shock is the primary driver of a “global hunger and health crisis,” pushing an additional 45 million people into acute hunger. The skyrocketing cost of fuel has made it impossible for farmers in the Global South to afford fertilizer, much of which is trapped behind the naval blockades in the Gulf.
While the architects of war in Washington continue to fund the destruction with billions in unbudgeted spending, the American people are continuing to pay the “war tax” at every turn. Gas prices have surged past $4.00 a gallon, and inflation is projected to average 3.2% this year, a sharp increase from previous forecasts.
The New York Times analysis uncovers a profound irony: although the U.S. economy remains the “strongest of any large, advanced economy,” its growth is being undermined by the very conflict it initiated.
Domestic protests have erupted in hundreds of cities as the public grapples with the reality that, according to the CAP report, the $3.7 billion spent in the first 100 hours of the war could have been allocated to rebuilding deteriorating American cities, providing healthcare, or eliminating student debt.
Now the full price tag is coming into focus. In testimony before the House Armed Services Committee on April 29, Acting Pentagon Comptroller Jules Hurst III confirmed that the war has cost an estimated $25 billion to date—the first official government figure on the war’s total cost. “Most of that is ammunitions,” Mr. Hurst told lawmakers.
The disclosure came only after weeks of sustained Democratic pressure, drawing a pointed reply from Rep. Adam Smith, ranking member of the committee: “I’m glad you answered that question, because we’ve been asking for a hell of a long time, and no one’s given us the number.”
Mr. Hurst indicated that a formal supplemental budget request will be submitted to Congress once a full cost assessment is complete. The American Enterprise Institute has estimated the total cost of the conflict at between $25 billion and $35 billion.
With inquiries into accountability taking place in Washington, it is Blacks and Browns around the world—whether in Sub-Saharan Africa or the Gulf South—who carry the brunt of the greatest burden of a war that was never sanctioned by them and whose benefits they can never hope to reap.
The cost-benefit analysis of the war is not measured in terms of energy futures and military expenditure, but rather on the grim futures of the 45 million who have been thrown into poverty and the two million children who now face starvation.
—Nisa Islam Muhammad, Staff Writer