International security and the world economy

The recent increase in international tension associated with Iran and Afghanistan raises many questions about the longerterm health of the international economy. There is growing concern about potential conflicts affecting sources of key raw materials, serious problems in the international payments system and growing domestic priorities on defence production. Strategic political decisions rather than private business decisions are likely to affect the future course of the world economy. This is especially true because of the increasing political dependence of the industrial countries on developments abroad. The author examines the historical setting of inter-dependence, the current dilemmas created by it and the policy steps likely to dominate the next decade.