Officials and investors are starting to worry that the world is sliding toward a new era of great-power conflict, as the number of flashpoints multiplies from West Africa through Ukraine to the Middle East.
With countries scrambling to protect their interests and frozen conflicts again running hot, for some, the web of overlapping conflagrations carries echoes of the period before World War I when the pacts linking major opposing blocs dragged Europe into a continental war.
“History rhymes,” Gabrielius Landsbergis, foreign minister of Russia’s Baltic neighbor Lithuania, said in an interview on Monday, pointing to the number of countries lining up to challenge the US and its allies.
Hamas’s assault on Israel, which caught the security services there and in Washington off guard, brought the risks into focus for many investors, while research by Bloomberg Economics shows the fighting around the world is poised to do more damage to the global economy than at any time since 1945. With Western attention stretched between Ukraine, and China’s ambitions in the Pacific, the attack showed how opponents of the US-led global order might seize the moment to strike, increasing the risk of a fatal misstep or an escalation.
In the aftermath of those Oct. 7 attacks, billionaire hedge fund manager Paul Tudor Jones called the geopolitical environment the “most threatening and challenging” he’d ever seen, citing Iran and Israel as the most likely countries to trigger “a First World War cascade.”
“The world is now completely dependent on the good sense of leaders to avoid an Armageddon,” said Elliott Investment Management founder Paul Singer.
Bloomberg spoke to more than a dozen senior officials from the US, Europe, other G-20 nations and NATO, most of whom agreed to share their views on the condition of anonymity.
As Israel’s airstrikes on Gaza resume after a week-long pause, and Hamas gets a further extension, careful diplomatic efforts to prevent the war there from spreading wider have so far been successful, and yet the heightened global tensions have fueled concern that some sort of misjudgment could bring major powers into confrontation.
Chinese President Xi Jinping’s recent visit to the US saw him agree with US President Joe Biden to better manage tensions, a month after the China reaffirmed its support for Putin’s Russia.
Still, the reignition of fighting in the Middle East has “huge explosive potential not only for a regional conflict, but even a global one” said Czech President Petr Pavel, who was formerly chief adviser to NATO, last week in Prague. He said he saw acute dangers in how the war that began on Oct. 7 had started “to divide the world,” according to the CTK news agency.