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Wednesday, 25 June 2025

 OF THE PEACE BELLS AND WAR DRUMS


Lately there is not a day that in a place on earth they don't explode missiles, attack drones and in the meantime let's remember that people die. In the last conflict between Israel and Iran, 28 people died in Israel and there were 3000 injured, Iran triggered 550 missiles and 1000 drones, and 610 Iranians died. And now theoretically the parties will sit at the table and settle their differences. New York Times columnist Thomas Friedman predicts that after armed conflicts like those mentioned, in addition to Ukraine, Gaza, Lebanon, Syria, Iraq, Yemen, Somalia, Eritrea, Mali, Pakistan and India, etc., states will organize themselves and new governments come that promote peace and development. The belikers lose to peace.


In this day-to-day war threats, oil prices have become a constant concern. And some critical places, such as the Strait of Hormuz, where 30% of the world's oil passes, were in evidence. Paradoxically, oil prices fell, and stocks around the world rose. We can almost say that armed conflicts are good for business. And in particular, the NATO meeting in the Netherlands this week, where 32 member countries, under pressure from Trump, decide to increase their military spending to 5% of GDP, changes the paradigm of the next decade of development. While until recently the development engine was consumer products and services, such as smartphones, information technologies, new cars, medical equipment, smartTV, etc., now they are tanks, rifles, ammunition. The military sector is unfortunately the vanguard of technology, but for war purposes, and then there is something left for the survivors, such as GPS, the internet and even Pilates. It is frightening, because the decision of politicians to be prepared to kill ourselves is more important than the well-being of the population, as the Prime Minister of Spain said, and is frightening and worrying for the new generations.


Rearmament and high military spending will probably generate GDP growth. Where is the inflection point when the results of these investments are used in destruction, no one says. The companies involved in this effort will grow, and the rest, how is it?


It is interesting to observe in this paradox, how China acts, without engaging directly in conflicts, but without ceasing to be concerned about the tariff war and its competition with the US. Neither one thing nor the other disappeared from the map. The missiles in the skies of the Middle East did not erase other problems, including climate change, by the way touching the skin of Europeans and Americans with high temperatures and fires.


What about Brazil? With political disorders and public accounts in a state of calamity, threatening democracy itself, it is only possible to repeat the popular belief: God is Brazilian.

A 3.5% Guideline Would Require Large Increases in Defense Spending for Most NATO Members

Defense spending as a share of GDP, 2024 (estimated)


 

A chart of NATO defense spending as a share of GDP by country, showing that in 2024 most countries met the 2% guideline but most would need large increase to meet the proposed 3.5% guideline

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