Interconnectedness and the 2nd Shock Wave

A salient and dark article on the 3rd world impact of the current financial market contagion was posted today by Michael Klare, on March 18, 2009, in a blog titled, appearing in Foreign Policy In Focus, titled, The Second Shockwave. Klare writes, "While the economic contraction is apparently slowing in the advanced industrial countries and may reach bottom in the not-too-distant future, it's only beginning to gain momentum in the developing world, which was spared the earliest effects of the global meltdown. Because the crisis was largely precipitated by a collapse of the housing market in the United States and the resulting disintegration of financial products derived from the "securitization" of questionable mortgages, most developing nations were unaffected by the early stages of the meltdown, for the simple reason that they possessed few such assets. But now, as the wealthier nations cease investing in the developing world or acquiring its exports, the crisis is hitting them with a vengeance. On top of this, conditions are deteriorating at a time when severe drought is affecting many key food-producing regions and poor farmers lack the wherewithal to buy seeds, fertilizers, and fuel. The likely result: A looming food crisis in many areas hit hardest by the global economic meltdown."

This same theme was also vocalized by the heads of the World Bank and the International Monetary Fund within the past three months. We are interconnected. The huge contraction in spending and demand in developed nations may have severe impact and result in political upheaval in 3rd world countries. And if conditions worsen signficantly in the developed world, nation-states may fratricide into smaller states as disunion and disproportionate pain-sharing may cause some to leave their peers. Coalitions formed in times of peace and plenty may not last the famine of releief and developed nation spending.