WWIII?

2009 has brought with it a new type of conflict. In the war of People versus the Economic Recession, it seems round 1 may belong to Recession

WWIII?

2009 has brought with it a new type of conflict. In the war of People versus the Economic Recession, it seems round 1 may belong to Recession

THE desperate images of human suffering and blood letting in one war have eclipsed a much greater bloodless suffering in another.

Heart rending images left by Israel's determination to neutralise the security threat from Hamas in Gaza have sidelined the more profound encroaching misery escaped by no one on our planet.
Economic recession.

While the toll of Palestinian victims mounts inexorably, global fears of that recession envelop us all. No one is immune.

Apart from wincing traders' faces or heads in hands, the financial upheavals of the past year never had the dramatic images to match those from an armed conflict.

Yet the impact is profound for us all in ways which are far more sweeping.

On Thursday as TV news bulletins still lead on the latest Middle East carnage and the UN pushed for an enduring ceasefire, President-elect Barack Obama made public his Recovery and Re-investment Plan for the US.
He told the world it was to save America's economy from a catastrophic slump even more dire than what it is already experiencing. Why? "We start 2009 in the midst of a crisis unlike any we have seen in our lifetime" he said. If the US fails to reverse the "severity" of its accelerating economic slide: "our nation will sink deeper into a crisis that, at some point, we may not be able to reverse".

Obama concluded: there must now be the spirit previous generations used to "face down war, depression and [quoting President Roosevelt in the 1930's depression] fear itself".

Things are that bad.

We hear of friends or colleagues who are suddenly out of work. Once self confident executives seem fearful, chastened and suddenly different.

Many do not want the embarrassment of sharing their unexpected predicament. But like a mother-to-be who tries to keep secret that she is four months pregnant, there are always unmistakeable signs in faces and demeanour.

A quiet, social tragedy is unfolding in every community, whether well-off or struggling; whether rich or poor.

In my own city suburb, Christmas Day was not just about family celebration.

Our vicar bravely broke with the large congregation's expectations of traditional thoughts about the birth of Christ. He risked reminding us all of the new level of personal suffering, not just so visibly in Zimbabwe or Burma, but more silently around us among neighbours, acquaintances and many more we don't know.

He spoke of a "cauldron of turmoil", with a "level of insecurity I have never known in my entire life".

Pragmatically he added: "We will just have to get through it, but at great cost to our nerves and lives."

Then the profound alert: "The future world will be different. Our values will change".

He and Obama shared the same assessment. The vicar reflected my own pessimism: not only about new realities no one should dare wish they can wish away, but also the new more restrained lifestyle we must all learn to adopt.

But does the message sink in? Can the smart mindset of the next generation adapt from a life of assumed plenty and wealth, to a new one of adversity and frugality?

Anxieties are already moving one stage further to a depression. The IMF's managing director predicts "even darker" times in the coming months, and probably years.

During 2008, we entered the realms of the unimaginable and unthinkable. As if confronting war and a new enemy, politicians, civil servants, corporate executives and the senior bankers all had to stretch their minds into uncharted territory. As some eventually conceded, old mindsets and assumptions are no longer relevant.

Managing years of success and growth is no preparation for the hand-brake turn needed to manage survival.

There is now a dramatic parallel to a World War Three but without the bombs, artillery and blood.

World War Three? Over dramatic? I don't think so.

I just re-checked my introduction to our BBC World Debate at the Davos World Economic Forum at the end of January 2008. We highlighted "The worst global economic crisis in 60 years". We asked is "the credibility of governments and banks at stake" and "How will it affect you?" Our title suggested: "the global economy: is it in shock?" with the possibility of a "perfect storm".

Many in our debate accused us of being over pessimistic and too dramatic. China and India would be relatively immune if the worst case scenario did develop during 2008. India's Finance Minister P Chidambaram told us the Indian economy was relatively decoupled from any future disasters in the US.

Twelve months on, the reality is different.

China and India are not immune. Worldwide, the poor have endured the pain and shock of months of spiralling food and energy prices. The middle class have seen their hard earned assets like houses lose value, largely because of the sleight-of-hand devices dreamt up by smart thinking financial wizards using money that did not really exist. Most of the rich have watched the value of their portfolios disintegrate, many because of hokey financial schemes that either pushed credit rules beyond their limits or were downright criminal.

We now know that no one whether in politics, government, banks or the corporate world even conceived as possible the even darker financial events that engulfed us all in 2008.

There was denial. Limited, traditionally calibrated mindsets could not envisage the possibility of global insolvency and crashing oil prices. They were not on political and corporate radar screens.

A comparison with a World War Three?

Terror attacks, insurgencies, political unrest remain a vivid, dramatic and tragic staple diet of global news coverage. The Mumbai attacks which I covered outside the Taj and Oberoi hotels confirmed proliferating attempts to use terror to de-stabilise our lives and systems.

But 9/11 in New York, 3/11 in Madrid, 7/7 in London and a host of other dark acts of terror showed that our systems and ways of life remain largely resilient and in tact. In Mumbai the Taj Tower and Trident hotels have reopened. Guests have defiantly returned to make their point.

The economic slump is different.

Just as our global system of peace and stability was once threatened by Hitler or a nuclear strike in the Cold War, bankers and politicians confirm that our economic and financial system almost self-destructed and disintegrated in late 2008.

Is even worse to come?

When US Vice-President-to-be Joe Biden warns that the US economy is close to "tanking", the answer has to be 'yes'.

Like in the Middle East, there is no enduring halt to upheaval that means we can say the world's economic war of unknown scale and dimensions will soon end.

World News Today with Nik Gowing is on BBC World News from Monday to Friday at 2130 Hrs