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Anthony Rowley

Can the collective wisdom or clout of the almost 200 countries that make up the membership of the World Bank and International Monetary Fund (IMF) prevail against the United States and Israel, whose rash actions of declaring war on Iran have effectively declared economic war on the whole world?
We may get the answers to this critical question when the two so-called Bretton Woods institutions begin their annual meetings in Washington on April 13. The week-long gatherings provide an opportunity for rational discussion and maybe even collective action amid the Middle East crisis.
To be clear, neither the World Bank nor the IMF can replace the United Nations, though they were founded originally under the aegis of the institution. Their job is to provide economic policy advice and development finance rather than to broker settlements between warring powers.
However, by providing an umbrella at their annual meetings for peer-to-peer or leader-to-leader dialogue among nations with very different polities and cultures, they do offer an opportunity for very diverse nations to better appreciate the consequences of their unilateral actions on the broader global economy.
Running the world is a job for consensus-building, and while we do not yet have anything approaching world governance, the fact is that we are “all in it together” when it comes to global interdependence. The foreign policies of major powers reverberate internationally and should not be undertaken unilaterally.
This has perhaps never been so apparent, as the impact of the US-Israel war on Iran becomes clearer every day, despite an announced ceasefire. From a geopolitical, economic, financial and logistical standpoint, their combined assault looks more like the work of bungling amateurs than competent professionals.

As such, it is likely to have deep ramifications in unexpected areas, including a critically damaging effect on the artificial intelligence (AI) revolution and a collapse in stock prices inflated by the tech sector. The potential mayhem this implies is only just becoming clear.
A two-week ceasefire reached on Tuesday between the US and Iran has not removed this threat; it only defers it. A ceasefire is only as good as the reliability and integrity of the parties to the agreement. Those qualities are lacking where the US is concerned.
Even if the US enjoys a degree of energy self-sufficiency that could shield it for a while against the wider consequences of the Trump administration’s actions, the whole world risks being thrust “back to the Stone Ages”, to use an expression favoured by the US president, or at least into an economic ice age.
As a recent blog in the Atlantic Council by Hung Tran, a former IMF deputy director, noted, “Triggered by the Iran war and the de facto closure of the Strait of Hormuz, global supply chains have been severely disrupted, threatening not only global energy markets but also the artificial intelligence (AI) investment boom, which has played a central role in driving global economic growth.
“The knock-on effects of the crisis could soon ripple far beyond energy markets,” he said. “By driving up the costs of critical inputs such as electricity and semiconductors, it may also cast doubt on the AI investment boom.”

Hung Tran added: “Since many of the commodities and goods transiting the strait directly underpin the digital economy, the ongoing supply disruptions threaten the expected returns of many tech projects. For instance, the global oil and gas supply – roughly one-fifth of which passes through the Strait of Hormuz – not only fuels industrial production but also provides stable and low-cost energy to data centres.”
With what the blog termed the “cost-benefit calculus supporting the projected [US]$1.5 trillion in IT and AI investments now weakening, the equity valuations of high-tech corporations undertaking these projects have been marked down. Stock markets, led by the Nasdaq, have fallen … and are considered to be entering correction territory.”
A cooling of AI investment will also dampen the sector’s contribution to gross domestic product. “In 2025, IT and AI investment expenditures – accounting for 4.5 per cent of GDP – contributed as much as 39 per cent of growth in the first three quarters, or up to 25 per cent for the full year,” Hung Tran said.
Such arguments have been reinforced in other recent analyses. For example, Marcello Estevao, managing director and chief economist at the Institute of International Finance, wrote in the IMF’s Finance & Development magazine that “artificial intelligence is the defining driver of global economic conversation – and, increasingly, of economic growth itself”.

“The scale of computing power required for AI training and inference has made electricity generation and grid capacity critical macroeconomic variables,” he said.
“The macroeconomic implications are profound. Energy bottlenecks could delay AI diffusion, anchor a higher level of core inflation, and generate localised overheating even as other sectors remain weak. Grid investment is becoming a central supply-side constraint, blurring the line between industrial and macroeconomic policy.”
Against the cold logic of such analyses, the wanton destruction wrought by wars of the kind plaguing the Middle East is grotesquely irresponsible and inexcusable. Maybe – just maybe – the World Bank and IMF meetings can shame leaders meeting on the sidelines – particularly those in the Trump administration – into realising the folly of their actions.


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By attacking Iran, the US has put the global economic order in jeopardy


By attacking Iran, the US has put the global economic order in jeopardy.


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Can World Bank and IMF leaders rescue a global economy on the brink?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}By attacking Iran, the US has put the global economic order in jeopardy

By attacking Iran, the US has put the global economic order in jeopardy