United Nations (UN) Secretary-General Antonio Guterres has warned that the longer the Strait of Hormuz remains choked, the harder it will be to reverse the damage.
He was addressing the media in New York as the conflict in the Middle East entered its third month.
A double blockade of the key waterway by both Iran and the United States (US) has curtailed navigational rights and freedoms and is impeding the delivery of oil, gas, fertilizer and other critical commodities to global markets.
As economic pressure weighs on all actors, President Donald Trump asserted Wednesday that the US navy blockade was 100% foolproof and that Iran would have to concede to US demands.
The UN Chief warned the current standoff would bring economic pain far beyond the current conflict.
“As with every conflict, the whole of humanity is paying the price, even if a few are reaping huge profits. The pain will be felt for a long time to come. Consider these three scenarios, based on forecasts from multiple sources: First, one where restrictions are lifted today. Supply chains will take months to recover, prolonging lower economic output and higher prices. This year’s global economic growth will still drop from 3.4 to 3.1%. Global inflation, which had been declining, will climb from 3.8 to 4.4%. Global merchandise trade growth will shrink from 4.7% last year to roughly 2% with some meaningful supply chain interruptions.”
Guterres called this a best-case scenario, arguing that the world was still reeling from the shocks of the COVID-19 pandemic and the war in Ukraine amid additional economic distress wrought by the war.
He cautioned that were the war to drag on, economic indicators would deteriorate further pushing millions more into poverty, some 45 million would face extreme hunger and hard won-development gains would be reversed overnight with worries that a global recession could make the consequences not just cumulative, but exponential.
“The longer this vital artery is choked, the harder it will be to reverse the damage and the higher the cost to humanity. Developing countries will be hit the hardest, as crushing debt impedes their ability to cope with jobs lost, deeper poverty and more hunger. This crisis has already locked in losses for months to come. Every day that ships cannot move escalates these costs and amplifies their reverberations across the global economy.”
The UNSG had a message for the parties to the conflict as he again urged dialogue.
“Open the Strait. Let all ships pass. Let the global economy breathe again. That requires more than physical reopening. It requires shipping to be safe, predictable and insurable. Simultaneously, I urge all parties to refrain from actions that could undermine the ceasefire. I have remained in close contact with a number of parties, as has my Personal Envoy Jean Arnault.”
As the economic strangulation continues in the region, the question remains what the next diplomatic off-ramp looks like for Tehran and Washington as the world waits for a viable pathway to peace.
VIDEO | Guterres says navigational rights through the Strait of Hormuz must be respected:
