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Ramaz Abesadze
GLOBAL THREATS OF ECONOMIC SECURITY

Annotation. The national economy is greatly influenced by both economic and non-economic factors occurring in the world. The paper discusses global economic and non-economic threats of economic security. The following are distinguished from global economic threats: economic crises; energy problems; poverty; food; resource depletion (exhaustion of oil, natural gas, coal, timber, non-ferrous metals, shortage of water resources); space exploration, useage of the World Ocean resources, etc. Global threats of a non-economic nature include: peacekeeping; disarmament and arms control; problems of developing countries; demographics ; ecological problems (catastrophic environmental pollution: pollution of the atmosphere, water and soil; reduction of biodiversity; climate change: global warming; ozone holes, greenhouse effect; international terrorism; drug trafficking; ethno-political conflicts; protection of the human rights and freedom; preservation of cultural diversity; cybersecurity, and etc.)

Keywords: economic security, global threats, economic crisis, energy and food problems. 

Introduction

The term "security" began to be used around the 12th century and meant a person's peaceful spiritual state, his/her protection from any danger. However, in this sense it was not introduced into vocabulary and had been used very rarely. Later, the term " the state security" was introduced, which meant the struggle to protect the interests of the state. Later, the category "security" was divided into some separate areas. In this regard, "national security, the basis of which is economic security", has a paramount importance for individual countries. National security involves the protection of concrete country and its population from external and internal threats in all areas of activity. The term was first used in 1901 by President of the United States of America, Theodore Roosevelt, in his address to the nation - "On National Security". Officially, the term "national security" arose in 1947, when the United States of America adopted the law "On National Security". First of all, national security serves to protect and implement national interests. For the protection and realization of national interests, “economic security” has a great importance, since without appropriate economic security, the requirements of national security (national interests, improvement of human well-being) cannot be met. National security requires a variety of means: modern equipment, technologies, information and telecommunications tools, and etc. It can be said that the basis of a country's national security is its economic security.

The main content of economic security is that, the country must ensure the constant protection of the vital economic interests of  individuals, society and the  state and is fully focused on a dynamic development of  economy, both in a peaceful conditions and in conditions of domestic and external extreme situations. It is implemented at the international, national, regional, enterprise and personal levels. The most important interests of it are based on the innovative development of economy and increasing its competitiveness: socio-economic and military-political stability; efficient use and distribution of resources; protection and implementation of the national priorities of individual state; sustainable development; increasing the well-being of  population and the country's defense capabilities.

Implementation of economic security involves the development and implementation of a system of measures that ensures the independence, identity, and development of the country's national economic system,  prevention of domestic and foreign threats, and adoption of preliminary measures to prevent anticipated threats. An appropriate organizational structure is also required to implement economic security. 

Global economic threats

National economic security is highly dependent on ongoing processes worldwide, therefore global security has a great importance, which implies ensuring security from  deterioration of  the living conditions on the Earth and, in general, from destruction of humanity. Global security problems concern all states and each person. There are global economic and non-economic threats that affect national economic security. The following are noteworthy from global threats of an economic nature: economic crises; energy, poverty, and food problems; resource depletion troubles: depletion of oil, natural gas, coal, timber, non-ferrous metals, shortage of water resources; space exploration, use of the World Ocean resources, and etc. The following are notable from global threats of a non-economic nature: peacekeeping; disarmament and arms control; problems of developing countries; demographic problems; catastrophic environmental pollution: pollution of the atmosphere, water and soil; reduction of biodiversity; climate change: global warming; ozone holes, greenhouse effect; international terrorism; drug trafficking; ethnopolitical conflicts; protection of human rights and freedom; preservation of cultural diversity; cybersecurity, and etc.

An economic crisis is the most severe and destructive manifestation of  deep contradictions of the cycle of reproduction, during which production sharply decreases, unemployment and inflation increase, and the level of well-being of  population decreases. During an economic crisis, agrarian, stock exchange, monetary and credit, currency, and financial crises may occur. At the same time, a crisis also carries potentially the positive properties. During a crisis, contradictions are resolved and a new, higher stage of economic development begins.

The world has gone through several economic crises: The Great Depression of 1929-1933 was the first global crisis. The economic downturn lasted four years and peaked in 1933. The effects of that crisis were not eliminated until World War II. Between 1929 and 1933, the world economy contracted by 15%. International trade halved, and unemployment in the United States and Europe exceeded to 25%. The third of all American banks went bankrupt. John Maynard Keynes's approaches became popular in order to stop the Great Depression, advising the government to increase budget spending to stimulate aggregate demand;during the 1973 oil crisis, the world price of oil increased fourfold (from $3 per barrel to $12), which made it difficult to produce goods in western countries, reduced supply, and increased prices. There were several reasons for increase in oil prices, but the most important was the embargo imposed by the oil-exporting Arab countries on the supply of oil to the west. The embargo was caused by the war between  coalition of Arab countries and Israel. Western countries supported Israel. The reasons for increase in oil prices were also the decrease in oil production in the United States, the end of the Bretton Woods system (fixed exchange rate system), which led to depreciation of the dollar and increased demand for oil in the world. As a result of the increase in oil prices, the world economy entered into recession. The United States and Great Britain were particularly affected, where inflation reached to double digits. That process was called "stagflation", a combination of words stagnation and inflation. During the oil shock, governments spending to stimulate economy did not work, because the problem was the supply constraints caused by high oil prices, not the decline in demand. The correct approach was to support production by reducing taxes and regulations,as well as by increasing access to bank credits; the oil shock was repeated during the 1979 oil crisis, in that time when the world price of oil was risen from $15 to $39 per barrel. The main reason was the reduction in oil supplies, which followed the Islamic Revolution in Iran. The world supply of oil fell by 4%, that led to panic and expectations of price increases, which caused oil prices to rise 2.6 times. In 1980, the Iran-Iraq war began, which further reduced oil production. The 1979 oil shock was also followed by "stagflation" in many countries of the world. The world economy shrank by 5%, in some western countries there was double-digit inflation, and stock prices fell down. The elimination of  negative consequences of the second oil shock is largely due to the work of British Prime Minister, Margaret Thatcher and the US President, Ronald Reagan who carried out similar reforms, which were associated with tax cuts, privatization, and a general reduction for the state intervention in economy. Monetary policy was also tightened, with price stability becoming the main goal of monetary policy; the Asian financial crisis began with a financial crisis in Thailand, which spread to South Korea, Hong Kong, Malaysia, and the Philippines. It affected China, Singapore, and Taiwan relatively lightly. The crisis began in the stock markets and banking sector due to high corporate borrowing, which turned into government debt crises. The economies of the countries affected by the crisis shrank by 8% in total. The debt-to-GDP ratio doubled in some countries. In 1998-1999, East Asian countries had fixed exchange rates, and during the crisis, their foreign exchange reserves were significantly reduced, as they were sold. Eventually, they switched to floating exchange rates and received a $40 billion aid program from the International Monetary Fund to overcome the crisis; the financial crisis of 2008-2009 had the most severe consequences since the Great Depression. It affected all countries of the world, because by that time the level of economic globalization and interdependence of countries was very high. There are also differences of opinion regarding the causes of that crisis, but one thing is clear – the crisis began in the financial sector, from excessive bank loans and increased prices of securities, which is called a “financial bubble”. There are also differences of opinion regarding what was the cause of financial bubble itself: the excessively soft monetary policy of the Federal Reserve System or weak regulation of the financial sector. The crisis actually began in the summer of 2007 in the US real estate market, with  failure of substandard mortgage lending. The world economy shrank by 3.3%, many banks and financial institutions went bankrupt. Those which did not go bankrupt were severely affected or became the subjects to nationalization. The bankruptcy of  American investment bank, Lehman Brothers, with a 158-year history, in 2008 stands out, which caused panic and exacerbated the crisis. The private financial sector was supported by the state, which increased the volume of state debt of countries. The unemployment rate in developed countries increased from 5% to 9%. The real estate and stock prices decreased significantly, which meant the impoverishment of their owners. The world began to emerge from the crisis in 2010. It took  two to three years to overcome the crisis. Governments mainly resorted to budget support programs. To stimulate demand, banks in developed countries significantly reduced refinancing rates and at the same time tightened banking regulations [Namchavadze 2020]; The coronavirus pandemic crisis arose during the massive spread of an infectious disease in the world, with governments taking measures to ensure human safety. Restrictions on economic activities in economy lead to the restriction of market mechanisms, partial or complete cessation of the functioning of enterprises, which was followed by an economic downturn, deterioration of the well-being and comfort of a large part of society. The most affected sectors were tourism, transport, small and medium-sized businesses, the processing industry, oil extraction, automobile production and electrical engineering,financial sector,retail trade,the field of Arts, sports, recreation and entertainment, and the least affected were the food industry, communications, electricity, international transportation, and etc.

The main reason for  emergence of  energy problem is an intensive use of mineral fuels, which began in the twentieth century. The scarcity of resources forces humanity to strictly conserve energy. This problem is related to such major issues like: the climate change, environmental degradation, security, poverty, health, food production, agriculture and water resources.

The first mention of energy problem dates back to 1970. At that time, scientists began to argue that humanity would soon have difficulty by providing transport and enterprises with fuel. It was then when the prices of oil and oil products increased, as a result of which the prices of electricity, motor fuel, air transport, heating and other services increased too. After that, the global economic crisis began. It affected almost every country and every person on the planet. Subsequently, the crisis ended, but the energy problem did not disappear. Scientists believe that in the near future  energy sector will change significantly. The greatest emphasis is placed on the use of natural energy sources, namely: water; wind; solar and "geothermal" energy. Nowadays, scientists are also developing the new nuclear reactors that will generate a huge amount of energy, while being as safe as possible for the environment. But the disadvantages are that in any case there will be radioactive waste and the maintenance of a nuclear power plant is too expensive. Scientists are developing various devices for everyday life that save energy, therefore, this has a positive effect on nature and to some extent solves the global energy problem. Non-renewable energy resources are also being discovered and exploited. Currently, world oil reserves are about 1.7 trillion barrels, world natural gas reserves are trillion cubic meters, world coal reserves are trillion tons. The supply of nuclear fuel (uranium and plutonium) is limited, but nuclear energy still plays an important role in the energy sector. The existing reserves allow the use of nuclear reactors for a long time  [Ocenka... 2024].

The global food problem is an insufficient supply of food products to the population of the planet. It is manifested mainly in the poorest countries of the Third World and is becoming increasingly acute with  growth of their population. Nowadays, the total number of humans who are suffering from food shortages exceeds 1 billion people. The fact is that population’s growth is outpacing the growth of agricultural production and the development of its technologies. However, there is an opinion that even with  current level of development of agricultural and livestock technologies used, it will be possible to feed more than 10 billion people [Продовольства... 2024]. 

Non-economic global threats

The real possibility of beginning the World War III, the peacekeeping process, disarmament and arms control are main global issues of mankind. Nowadays, the world has accumulated so many means of mass destruction (nuclear, chemical, bacteriological), the full-scale deployment of which poses a great threat to the existence of humanity. Today, there is already talk of using new types of means of mass destruction, the action of which, in many cases, exceeds the existing ones. For example, such weapons which are based on the new physical principles can be: directed energy, laser, electromagnetic, infrasonic, radio-frequency, geophysical (tectonic, ecological, climatic, ozone), genetic weapons, etc. Even Immanuel Kant, in his treatise “For Perpetual Peace”, wrote: a destructive war will lead us to eternal peace, only to the gigantic cemetery of humanity [Kant. I. 1989.]. Therefore, he demanded the prohibition of war. The World War I and the World War II had confirmed the truth of these words, which gave impetus to founding of the United Nations. The main mission of this organization is to protect military-political security. But tensions still arose between the two great powers, the Soviet Union and the United States of America, and their satellites, which is known as the “Cold War”. A large-scale war was avoided, in our opinion, as a result of the use of atomic and thermonuclear weapons, since the mass use of these weapons would destroy humanity and no one would win. Even after the end of the Cold War, complete peace was not established. In one and/or another regions of the world, although in local, significant military confrontations periodically are breaking out, which overshadows the achievements of globalization.

Problems of developing countries. This is the problem of relationships between developed and developing countries. Since the standard of living between the North and the South differs greatly, various problems have arisen that have a global character. For example, large-scale forced migration from developing countries to developed ones, non-payment of foreign debt, the threat of spread  infectious diseases worldwide, etc. Developing countries, include the states with a market economy and with a relatively low level of economic development. However, there is a significant difference between the states included in that group according to the level of economic development, and the process of their differentiation continues even today. The most difficult situation is in less developed countries, they are characterized by the lowest standard of living in the whole world (extremely low income, poverty, difficult living conditions, unsatisfactory health, insufficient education or complete lack of it, high mortality at a junior ages, poor life expectancy, and etc.)

The leading position in their economy is occupied by backward, including the archaic forms of agriculture. Industry is very poorly developed. The exports from these countries mainly include traditional products. The most difficult economic situation is in the countries of tropical Africa, which is, first of all, the result of deteriorating natural conditions and incorrect economic policies. Naturally, the large difference in economic levels between developing countries poses a threat to stabilization in the world, including economic stabilization. Therefore, the efforts of international organizations, especially the United Nations, are aimed at eliminating this problem.

Demographic problems.The problem of economic development and world population growth has become acute since 1950s. A large number of scientists and politicians believe that the world's population has reached a critical limit and it is necessary to find ways to stopping it. Among the negative aspects of population growth, it is worth noting that population growth requires a corresponding growth of the economy, which has a huge negative impact on the environment; since natural resources are limited, in conditions of endless population growth, they may not be enough to meet the growing needs of mankind. Back to the 18th-19th centuries, the British economist and demographer Thomas Robert Malthus argued that population growth would exceed the production capacity, which could have catastrophic consequences. Nowadays, there are already a number of global problems related to resource depletion. The problems of population growth in the world received special attention after the World War II, as growth rates are reaching unprecedented levels. The Declaration adopted at the Stockholm Conference on Environmental Protection held under the auspices of the United Nations in 1972 expressed concern that population growth was creating problems in the field of environmental protection and  appropriate measures should be taken. The problem of population growth was also addressed at the international conferences in Bucharest (1974) and Mexico City (1984), which focused on countries where had been already a disparity between population size and natural resources to take appropriate measures to restore the disturbed balance. The United Nations conferences in Rio de Janeiro in 1992 and Cairo in 1994 were also imbued with the same spirit. Subsequently, at international forums of the United Nations, the great importance of stabilizing population growth in the world in order to achieve sustainable economic development was repeatedly emphasized. During the two million years of human existence, the Earth's population has been very small for a very long time. 12,000 years ago, it was only 5 million people, and at the beginning of our era, it was only 250 million. The 20th century was a century of unprecedented population growth on the Earth, when the population increased from 1.6 billion to 6.1 billion. Moreover, if the first billion increase (from 1 billion to 2 billion) took 123 years (1804-1927), the last billion increase occurred in just 12 years (2005-2017) and amounted to 7,515,384,153 people [... 2018]. Along with increase of population, its highly uneven distribution by territory on Earth (more than 70 percent live on only in 15 states) also causes problems, as does the large difference in population growth rates between developed and developing countries. If decrease in population growth is observed in the developed countries, population growth rates in developing countries are still too high, despite the fact that real measures have been taken in a number of countries (China, India, Singapore, Taiwan, etc.) to reduce the birth rate. An important demographic problem is changes in the demographic structure. If a demographic explosion occurs in countries with low economic development, a demographic transition begins in countries with high economic development (replacing a sharp increase in the population rate with its also sharp decrease), as a result of which population growth stabilizes. Thus, the problem of population growth is a universal world problem, but each country must manage to solve it separately, since they face completely different problems. Providing the population with drinking water is also an important problem. The energy problem should be highlighted separately. Calculations show that with population growth, energy consumption in the world increases by a factor of four.

The problem of developing human potential. In the modern world, there are still countries where the level of education is on a very low level. The duration of study, according to the International Bank for Reconstruction and Development, is about 4 years in East Africa. In tropical Africa, less than 3 years, and in west Africa, only 2 years. There is still a problem of eliminating illiteracy in the world. In Africa and South Asia, the number of illiterate people among the adult population is 40%.

The global ecological problems: Climate change.  The climate change occurs as a result of an abnormally high concentration of greenhouse gases in the Earth's atmosphere. Various human activities cause excessive emissions of greenhouse gases into  atmosphere. And this, in turn, leads to an increase in the greenhouse effect, which in turn leads to increase the global temperature and, accordingly, the global warming. Climate change refers to both global warming and the phenomena that occur as a result of this process, or global warming, such as the melting of glaciers on mountains and the disappearance of ice sheets in the oceans; rising sea levels; floods; increased precipitation; the strengthening and frequency of storms; the so-called "heat waves"; frequent and prolonged droughts; tropical cyclones; forest fires; shifts in the flowering periods of plants; and some others. All these issues lead to a disruption of the usual balance of nature and poses various threats to humans as well as to all forms of life on the Earth. Accordingly, it can be said that the global warming is one of the manifestations of climate change, which causes the melting of glaciers on mountains and the melting of ice sheets into the oceans, which gradually leads to a rise in sea levels and the covering of the best lands by the oceans. If greenhouse gas emissions into atmosphere continue at the same pace, the Arctic ice will no longer exist by the summer of 2040. Since 1880, the average sea level has risen about 23 centimeters. In the last 25 years, the rise of sea level has amounted to about 8 centimeters. In 2023, the global average sea level was 10 centimeters higher than in 1993. In the Pacific ocean, 5 islands of the Solomon Islands have completely sunk due to rising sea levels, and at least 20 percent of the other 6 islands have been covered by water. The complete disappearance of the Greenland ice sheet alone will lead to a rise in sea levels of about 7 meters, which will have devastating consequences for billions of people, the complete melting of glaciers in the mountains and the gradual disappearance of ice sheets in the oceans will lead to a rise in sea levels of about 70 meters. Destruction and impoverishment of the geofund. Scientists have calculated that over the past 200 years, 9,000 species of plants and animals have been lost, the number of minerals is gradually decreasing. The problems of pollution of the world oceans with wasted products of energy, chemical and military industries is growing rapidly, which is very dangerous, because this can lead to decreasing in the water and food resources as well as a disruption of  oxygen balance in the atmosphere. 

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