Economist Emin Garibli touched upon various aspects of the problem in an interview with AzVision.az.

- Recently, there has been a sharp rise in prices for many goods on world markets, especially food. What do you think, is the cause of the ongoing inflation in recent events, or does this problem caused by the crisis of 2009-2013?

- The world's population keeps growing, and limited resources are declining. As a result, more than one billion people are currently suffering from starvation in the world. There is a war between material resources and the scientific and technical process. Which one will dominate? I will even give brief information: in the 60s of the last century, studies were conducted that this would lead to big complications in 2020...

- ... That is, 60 years ago…

- Yes, at that time they already said so. In general, the crisis of 2009-2013 compared with the crises that began at the beginning of the last century, which subsequently led to the "Great Depression" of the 1930s. Resources are becoming scarce and the population is growing. All these factors are most likely to cause new crises.

- Could the large-scale social payments issued around the world during lockdowns and a sharp decline in production caused by the pandemic be considered to be one of the causes of these events? 

- In general, what has been happening in recent years? Developed countries developed at a faster pace. The gap between developing countries has widened. This, of course, led to a crisis and rising prices. Developed countries, that is, countries with large financial resources, began to put a lot of resources into circulation and pursued a monetary policy in such a way that the money supply increased. Again, there was a difference: those who had the opportunity were able to take advantage of it, and those who did not have the opportunity missed opportunities. As restrictions increased, production declined, the aggregate supply of the global economy contracted, and demand began to rise. When people were at home, they had to eat as before. But the proposal, i.e. production declined, leading to a crisis. Several reform packages put into circulation $2-3 trillion. This led to an increase in the money supply and prices.

We still focus on food products. Of course, the most sensitive problem is food, then energy, and so on. The problem is the limited natural resources. Today, economists predict that this is a signal of an even greater crisis in the future. What crisis? There are already questions about whether the dollar will maintain its leading position.

- Do the current tough Western sanctions against Russia play a catalytic role in accelerating the crisis and rising prices?

- As you know, Ukraine and Russia account for 30 percent of global wheat exports. If there is a decline in wheat yields in these countries, this may exacerbate the situation. I would like this conflict not to drag on for a long time and not lead to further complications. Regional countries, of course, will be affected.

Today there is a great danger in terms of food. But if we look at the Russian economy itself, although there are some restrictions, let's see what it exports. Petroleum products, natural gas, copper, gold, etc. Their market price rose, and increased dramatically, many times over. The price of gas has increased 3-4 times, the price of oil has increased from $60 to $110, and so on. So there is a balance here. But if we go back to the period 2009-2013, we see that it all started with trade wars. This, in the end, can come from “soft wars” and lead to such bloody wars as in Ukraine. I think that even if this military conflict ends, the economic struggle will continue. And this, as you mentioned earlier, will affect the pace of development of today's global economy. Again, there are fears that this could lead to more serious global problems.

- By the way, can a sharp rise in prices and a shortage in discount stores for the poor and middle classes, even in the developed countries of Europe, lead to the bankruptcy of the middle class, which is the backbone of the economy in the West?

- As soon as this war began, of course, oil and gas prices began to rise, which negatively affected the middle and lower classes. On the other hand, there were limitations: they did not work for a long time. What do we also see? In Europe, the demand for labor has risen sharply. Because the number of people willing to work has decreased. This is also a big problem. As you know, if people do not work for two years, that's a problem. Of course, this cannot but affect the middle class. As a result, the structure is already changing. The digitization process is in progress. The population is likely not to be able to keep up with these prices. One of the main points is the lack of highly qualified specialists. Growing prices will accelerate these processes and act as a catalyst. Since the 1970s, they say that “a new era begins, the oil era is over, the gas era is over…” However, real statistics suggest that the oil demand is growing by at least 5 percent every year. Europe's energy resources are depleted and its dependence on other countries has increased. Other countries will use this as political pressure.

- According to many experts, one of the main causes of the sharp price hikes is the lack of raw materials, especially problems with logistics. What can you say about this?

- During the pandemic, we witnessed that the old transport corridors no longer meet today's demands. There are crises in the largest channels, which do not meet the emerging demands. What needs to be done? In order for any economy to be sustainable, new standards are needed, and here nature should not be harmed. There is a transition to new standards, and a lot of money has already been allocated. This, in turn, led to an increase in the money supply, and what are we seeing today? Today there is a transition to a new technological order, and the old transport corridors do not meet them. We, Azerbaijan, Turkey, and other countries in the region, of course, should take advantage of this situation and increase our importance by allocating financial resources. The vector of development of the world economy has shifted towards Asia. Where did the production come from with an increase in trade? It was delivered by sea, which took a month and a half. But if we - Azerbaijan and other continental countries - allocate the necessary resources and work together, this will increase our significance and serve to solve the problem.

- Against the backdrop of such contradictory and complex problems, is it possible to localize the economies of the Caspian countries, and in this context, what joint efforts should be made, including by Turkey, to neutralize such difficulties?

- We must inevitably establish cooperation. We wanted this before. At that time, it was rather an "invisible hand" in the economy, so the market economy itself would regulate the process. But today, states are in dire need of regional integration, economic integration, and cooperation. Today, in the face of the global crisis, it is impossible not to unite. If we talk about food, about wheat, we know that Kazakhstan has a large territory. What will regional integration lead to? At least the allocation of resources to solve this problem. One country has a lot of oil, another country has other resources, and we can cooperate and enter other markets. I want to be a little more optimistic that this is a chance for us. Today, we can cooperate and enter a new era of development after overcoming this crisis.

More about: Russia   Ukraine   economy   foodcrisis