Polycrisis

Polycrisis

Subject: Economy

Context

A new word, ‘polycrisis’, has entered the academic and policy lexicon to describe the multiple anxieties that have enveloped the world over the past 30 months.

Concept:

Polycrisis:

• It was first used by former European Commission president Jean-Claude Junker to describe Europe’s combustible situation in 2016 which combined indebtedness with Brexit, climate change and a refugee crisis.
• Economic historian and Columbia University professor Adam Tooze has been popularizing the term ‘polycrisis’ according to whom–
  • “Polycrisis is not just a situation where you face multiple crises. It is a situation where the whole is even more dangerous than the sum of the parts.”
  • A global polycrisis occurs when crises in multiple global systems become causally entangled in ways that significantly degrade humanity’s prospects. These interacting crises produce harms greater than the sum of those the crises would produce in isolation, were their host systems not so deeply interconnected.
• The interesting thing about polycrisis is perhaps its dualistic structure: a set of common crises which afflicts the world today with an additional layer unique to each country or region.
  • For example-EU–everything else remaining the same, the region faces an urgent energy crisis. government.
  • India–Apart from the global factors that have adversely affected inflation, interest rates and currency values, India will have to address a unique set of challenges in the domestic economy–growing joblessness, a relatively stagnant economy and heightened sectarian tensions.
• Interconnected Stressors-Multiple anxieties that have enveloped the world over the past 30 months:
  • Climate change to aggravating all the above problems
  • Global lockdowns breaking down well-established supply chains
  • Raised protectionist walls higher, putting global trade and globalization in jeopardy
  • Russia-Ukraine crisis causing deep geopolitical crisis including re-ignition of nuclear threats, indebtedness of poor nations for energy and foodgrains
  • Slow burn USA-China cold war
  • Inflationary trends causing central banks increasing interest rates
  • Further dampening business sentiments and economic growth prospects