Apurva Rakesh Pandey

Whenfuel prices surge on the streets of Colombo, fertilisers slip beyond the reach of African farmers, and Asian governments exhaust fiscal space to hold down subsidies, the reflex explanation is domestic mismanagement. That diagnosis is convenient—and often wrong. The drivers of these crises are frequently located far from national capitals, embedded in strategic decisions taken by a handful of power centres whose economic aftershocks travel effortlessly across borders. Contemporary conflicts may be geographically contained, but their costs are anything but.

This asymmetry—between where decisions are made and where consequences are felt—has become a defining feature of the global order. Power is concentrated; risk is globalised. Energy markets, shipping routes, insurance premia, and capital flows no longer merely reflect economic fundamentals. They have become transmission belts for geopolitics, carrying strategic intent into household budgets, food prices, and balance sheets across the developing world.

History makes this pattern unmistakable. The oil shocks of the 1970s did not remain an OPEC–West confrontation; they translated into 10–15 per cent inflation and debt crises across much of the Global South. The 1991 Gulf War and the sanctions regime that followed erased nearly half of Iraq’s GDP, but their secondary effects reverberated through energy markets and regional economies. The lesson was clear even then: when conflict intersects with global systems, its radius expands dramatically.

Globalisation was supposed to temper such outcomes. Interdependence, it was argued, would raise the cost of conflict and therefore restrain it. In practice, interdependence has done something else—it has accelerated the export of conflict-related costs. The Russia–Ukraine war of 2022–23 offers a textbook illustration. Wheat prices rose by 35–40 per cent; fertiliser exports were disrupted by 20–25 per cent. For low- and middle-income countries, this translated into food inflation of 8–12 per cent, fiscal stress, and renewed balance-of-payments pressures. The war did not have to be global to destabilise global livelihoods.

The problem intensifies when conflict threatens strategic chokepoints. The Strait of Hormuz, through which roughly a quarter of the world’s seaborne oil trade—and significant volumes of LNG and LPG—passes, has once again become a pressure point amid escalating tensions involving the United States, Israel, and Iran. Even limited disruption here sends oil prices swinging and insurance costs soaring, with immediate consequences for transport, manufacturing, and household energy bills far beyond West Asia. Geography, in such cases, becomes a multiplier of instability.

What emerges is a consistent sequence. Strategic choices are taken first, often with narrow security or political objectives. Economic consequences follow later, diffusing through global markets. Advanced economies, cushioned by deeper capital markets and institutional buffers, absorb part of the shock. States with limited fiscal capacity and high import dependence absorb far more. When Papua New Guinea’s Prime Minister James Marape remarked that countries like his are forced to pay for conflicts in which they have no role, he was not making a moral appeal; he was describing a structural reality.

This is why the prevailing international order increasingly looks less like a system that resolves imbalances and more like one that manages them—often poorly. It reactsto crises after costs have already been socialised across vulnerable economies, rather than preventing those costs from being externalised in the first place.

It is in this context that India’s contemporary diplomacy merits attention. Its shift from Cold War non-alignment to present-day multi-alignment is not rhetorical flexibility; it is strategic realism. India’s engagement with the Global South has focused less on symbolism and more on stabilisation—through vaccine diplomacy, food and fertiliser assistance, and diversified energy sourcing. Securing permanent membership for the African Union in the G20 was not merely an act of inclusion; it linked representation to agenda-setting in the world’s premier economic forum.

Yet stabilisation cannot rest on ad hoc measures alone. The next phase demands institutional ballast. Groupings such as BRICS and the wider Global South offer part of the answer, not as ideological counterweights but as shock absorbers. Instruments like the Contingent Reserve Arrangement and the New Development Bank, combined with local-currency trade and cross-border payment systems, can reduce exposure to volatile capital flows and dollar liquidity cycles. Their promise, however, depends on political discipline—on whether members can place collective resilience above bilateral competition. Still, alternative platforms are not substitutes for systemic reform. The architecture of global governance itself must be recalibrated to internalise the costs it currently externalises. Sanctions regimes need clearer economic impact assessments; trade rules must become more flexible in the face of supply-chain disruptions; financial systems require mechanisms that prioritise crisis liquidity for vulnerable economies.

Coordinated responses through the United Nations could strengthen multilateral crisis management, while the World Trade Organisation needs the mandate and agility to keep trade flowing during geopolitical shocks. In parallel, the United Nations Security Council must become more representative and more accountable, particularly when sanctions and interventions impose diffuse economic costs far beyond their intended targets.

Representation alone, however, is insufficient without accountability. Emerging powers must deploy their growing economic weight not just to expand markets, but to shape rules. Rule-making, not rule-following, is where lasting stability is built.

None of this assumes an end to power politics. Competition will persist; rivalry is intrinsic to international life. The challenge is not to abolish it, but to contain it within frameworks that dampen volatility rather than amplify it. If that effort fails, global fragility will cease to be episodic and become structural—a permanent condition rather than a recurring crisis.

A more inclusive and accountable decision-making order would not eliminate conflict, but it could prevent its costs from being indiscriminately exported. Stability, then, would no longer be a privilege enjoyed by a few resilient economies, but a shared global public good. The question confronting the international system is stark: will competition be allowed to slide into cascading instability, or will it be balanced by cooperation capable of sustaining a more predictable world?

(The writer is an alumnus of the University of Allahabad and writes on International Relations and Strategic Affairs)