War and disruption must be avoided, global priority is to restore normalcy: FM Sitharaman

Union Finance Minister Nirmala Sitharaman on Wednesday underlined the need to restore normalcy to the world and highlighted the cost of war that has led to supply chain disruptions and higher inflation globally.

“In no way can there be sufficient justifiable reasons for skirmishes or wars. I think the first effort, the global priority for this decade, should be to restore normality. Talk, sit and discuss. War must be avoided. Disruptions must be avoided,” he said at the Global Economic Policy Forum 2024 organized by CII.

The minister further stressed that it is up to everyone, including industry, government, policy makers, citizens and citizen forums, to try to restore normality around the world.
“They (wars) are the main cause of supply chain disruptions. “They are the main cause of disruptions in food value chains,” he stated, while underlining that inflation is the biggest global challenge that does not “respect borders” and no country can address it alone.

“I think the root cause is disruption, skirmish, war and as a result the world is facing a challenge that is reflected in many ways in our economies,” the minister said.

He also noted that the industry will have to realign its policies taking into account the country’s political and strategic decisions. To address supply chain disruptions, Sitharaman said there is currently a need to combine economic priorities with political and strategic needs.

He also urged the industry to work together with small and medium units to see how they can support large units as much as they support job creation. “Today, the problem is not economic success, which is just production, but also economic success that can distribute benefits to those who expect jobs and salaries,” he said, adding that technology will make the task easier.

The Minister of Finance also highlighted that another priority of the decade must be that countries are responsible for borrowing and managing their debt. “Intergenerational debt is increasing in countries… Responsible economies cannot function with loans so large that the next generation and the one after that already know what they are obliged to pay…”, he said, adding that the priority should be to manage finances and borrow to build assets.

While India also fell deeper into debt during the Covid-19 pandemic, he said the government remained “super conscious” that it cannot burden coming generations with debt that is not sustainable.