Saturday, March 25, 2023

NATO calls on member states to move towards a war economy


Poland.- The NATO command calls on its member states to move towards a war economy.

The head of the military committee of the North Atlantic Treaty Organization (NATO), Rob Bauer, recommended that alliance member countries switch to a war economy to cope with the conflict with Russia.

Following the outbreak of conflict between Russia and Ukraine in February 2022, Western countries supporting Kyiv assured they would support their political and military ally with economic and military aid, but called for a direct confrontation with Russia. Without.

However, in early 2023, various European countries, in coordination with the United States, decided to send high-end tanks to Ukraine to support its operations against Russia, an action the Kremlin considered more involved in the conflict. .

Within this framework, Bauer announced in an interview with Portuguese television that NATO member states should increase the production of their defense industry. “It may mean prioritizing some raw materials, some production capabilities needed for the defense industry rather than the civil industry. Those priorities should be debated, in part, over the war economy in peacetime,” he said.

What is war economy?

A war economy is the situation in which, in the event of a war or catastrophe, the government controls the management of a country’s economic resources to focus on the struggle under its responsibility.

In particular, Philippe Le Billon, a French researcher, defines it as the set of economic activities that are conducted to finance war, which run through the production, mobilization and distribution of resources. These actions affect taxes, trade, or the rationing of goods. The objective is to manage the economy in such a way that the war ends without neglecting the population.

«The state, taking over the reins of the economy, shall give priority to the needs of the military. All this implies measures such as population mobilisation, rationing, production control and self-supply”, underlines the online educational platform Economipedia.

“War economy implies putting all the resources of a country into war, making maximum effort not only in the military field, but also in production in the service of the needs of the army. This means that not only are the soldiers mobilized at the front Not only is the civilian population mobilized as a workforce,” he said.

In a war economy, the educational site explains, the military receives priority in resource management, which may lead to rationing and the use of primers to control distribution.

In addition, the state exercises control over the primary sector, due to which it oversees food production and the management of energy resources. The heavy industry responsible for the production of war material also becomes more relevant.

«Equally, the urgency of war leads on many occasions to transform civilian industry into an industry destined for the production of military material. Thus, automobile factories start producing battle tanks, the civil aviation industry builds fighter planes or civilian shipyards build warships, ”explains the Economypedia portal.

Another dynamic of the war economy is the issuance of war bonds, state-managed securities that offer a fixed return over time for households and companies, while their acquisition allows them to finance their projects.

“The risk of this instrument is that after a war the national economy and finances are severely affected, which complicates the collection of interest,” he describes.

Nation World News Desk
Nation World News Desk
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