Commentary: Economics Cannot Guarantee Peace, Fuels Resentment Instead

The long-held belief that economic interdependence fosters peace is increasingly being questioned, as current global trends suggest it may instead be a source of friction and resentment. Economics professor Danny Quah from the Lee Kuan Yew School of Public Policy argues that the assumption that mutual economic reliance prevents conflict is no longer tenable.

Historically, the theory posited that nations deeply integrated through trade and investment would have too much to lose from engaging in hostilities. This created a powerful incentive to maintain peaceful relations. However, recent geopolitical developments and rising nationalism appear to be undermining this principle.

Quah suggests that economic ties can, in some circumstances, exacerbate tensions rather than alleviate them. Factors such as trade imbalances, competition for resources, and the perceived economic dominance of one nation over another can breed discontent. Consequently, relying solely on economic integration to ensure global stability may be a flawed strategy, necessitating a broader approach to peacebuilding that accounts for political and social dynamics.