The coming global wealth destruction

Between AI-driven cyber chaos, two wars, and street mayhem, global prosperity is no longer guaranteed

The late Gen Bipin Rawat talked of the armed forces’ preparedness to take on not just a two-front threat, but a two-and-a-half-front one. The half front he referred to was the internal threat to the country’s unity and integrity. We now need to extend this analogy globally. The half-front threat is no longer limited to our subcontinent; it now confronts major countries in Europe and could possibly engulf America in the future. Only autocracies or countries with monocultural populations seem to be partly immune to this threat today, as scenes from France, Italy, Spain, Albania and elsewhere strongly suggest. The US could face its own half-front if Donald Trump’s party loses the November elections, as seems likely.

 

The half-front threats are not limited to visible ones alone. We now need to add the invisible ones too — the threat from artificial intelligence (AI)-driven cybercrime and fraud, the amplification of small internal problems into major ones using disinformation and AI fakes, and the most obvious one — the threat to jobs from rapid technological improvements, which are deliberately being suppressed by AI evangelists by showing us only AI’s benefits.

 

Once jobs are impacted in a big way, the half front will become even more aggressive than the external threats to India and many other countries. We should not ignore the debt time-bombs now being mishandled by many European countries (Greece, Italy, France among them) and some large AI companies too, which are borrowing money hand over fist — and at huge interest rates. These are running into trillions of dollars, and any bond or equity market collapse could trigger a major wealth destruction spree globally.

 

As I write this column this week, the cyber-threat headlines are deeply concerning: State Bank of India has just reported a large breach of customer data, which has now surfaced on the dark web; HDFC Bank is probing the leak of crucial and confidential data; a Bengaluru-based cybersecurity firm, eMudhra, apparently used weak cryptographic keys that could have allowed crooks to fake trusted digital certificates; government websites in Europe went dark after AI exposed flaws in the PHP programming language; a Chinese-speaking hacker used AI agents and tools to hack into almost 100 websites; and Japan has declared a cyber emergency after a wave of cyberattacks that led to the exposure of data on over 14 million citizens and affected over 600 corporate and public bodies. And we have not even added the rogue AI agents that our large language model companies have let loose on an unwary public.

 

India is simply not recognising the extent of the potential risks to our economy and national wealth posed by the two-and-a-half-front threat, aided by potentially destabilising AI-led cyber and other attacks.

 

India’s apex cyber protection organisation, the Computer Emergency Response Team (CERT-In), has been issuing many advisories to the public, banks and corporations about rising threats to poorly architected legacy software and hardware systems, but millions and millions of small and medium businesses, and ordinary citizens, are simply unaware or unable to do anything about it.

 

We quite simply have to become more paranoid about our cyber vulnerabilities, and we could begin by declaring a red alert on cyber threats, or even a cyber emergency, as Japan has done. Yes, this kind of alert or emergency will have a sharp short-term negative impact on business confidence and trust in devices and digital spaces, but it is better to be safe than sorry. The damage — like, say, a debilitating attack on a major player in the banking system — will be far greater if we choose to stay silent.

 

The only comfort India can draw from its own vulnerabilities is that the world is not becoming any safer, as the threats facing Europe and Japan show. But as a lower-middle-income country with millions teetering just above the poverty line, we cannot afford a major financial or economic meltdown. Or street protests that can spiral out of control. Protests over even genuine issues could end up being amplified by malignant cyber warriors, attracting lumpen elements that may end up damaging property and businesses, as we are seeing in Europe.

 

This is happening when the world’s most powerful countries are unable to end two wars that are pushing up living costs for the vulnerable, which will only make the internal half-fronts more volatile. This is not the time for any country, especially democratic ones, to fetishise street protests in the name of liberal values when these could spill over into something worse. In Albania, angry crowds hurled petrol bombs at government buildings and set fire to the Supreme Court.

 

When we put all these things together, we should come to the following conclusions: One, we are just a few political and economic missteps away from setting off a major wealth destruction spiral globally that will dwarf the 2008 global financial crisis; two, the threats to jobs and livelihoods will accelerate the downward spiral if we allow things to get worse on the streets.

 

The message for India and the world is simple: First, fix and defuse the domestic half-front through dialogue and strong preventive action (one is not a substitute for the other); second, bring the two unfinished wars to an end even if it implies that underlying issues have not been resolved; and third, start work on reforming global institutions, if necessary by creating trustworthy systems outside what the Big Two are willing to accept.

 

Whether it is the United Nations or the World Trade Organization or the International Monetary Fund and the World Bank, the era of Western hegemony is clearly coming to an end, and even the West is not on the same page anymore.

 

Europe, in particular, is splintering, and the political middle everywhere is being outgunned by those on the Left or Right. The old so-called “liberal” order has become a pale shadow of itself, degenerating into a caricature. Any liberal democracy that seeks to cancel the Right or Left will end up cancelling the workable middle position where compromises are possible. In India, the Left occupies the intellectual and elite spaces, while the Right (assuming we can call the Bharatiya Janata Party right-wing, which is far from reality) occupies many formal positions of power. The two need to make peace.

 

Solutions need consensus, and a consensus cannot be forged by silencing or cancelling voices that may not agree with you. The street will not, however, provide any better answers. 

 

The writer is a senior journalist.