WASHINGTON DC, Apr 16 2026 (IPS) - War is again defining the global landscape. After decades of relative calm following the Cold War, the number of active conflicts has surged in recent years to levels not seen since the end of the Second World War.

Meanwhile, rising geopolitical tensions and heightened security concerns are prompting many governments to reassess their priorities and spend more on defense.

Beyond their devastating human toll, wars impose large and lasting economic costs, and pose difficult macroeconomic trade-offs, especially for those countries where the fighting is taking place.

Even without active conflicts, rising defense spending can raise economic vulnerabilities in the medium term. After the war, governments face the urgent post-conflict task of securing durable peace and sustaining recovery.

In an era of proliferating conflicts, our research in two analytical chapters of the latest World Economic Outlook highlights the deep and prolonged economic harm inflicted by war, which has particularly affected sub-Saharan Africa, Europe, and the Middle East.

We also show that rising defense spending—which can boost demand in the short term—imposes difficult budgetary trade offs that make good policy design and lasting peace more important than ever.

Economic losses

For countries where wars occur, economic activity drops sharply. On average, output in countries where fighting takes place falls by about 3 percent at the onset and continues falling for years, reaching cumulative losses of roughly 7 percent within five years.

Output losses from conflicts typically exceed those associated with financial crises or severe natural disasters. Economic scars also persist even a decade later.

Wars also tend to have significant spillover effects. Countries engaged in foreign conflicts may avoid large economic losses—partly because there is no physical destruction on their own soil.

Yet, neighboring economies or key trading partners with the country where the conflict is taking place will feel the shock. In the early years of a conflict, these countries often experience modest declines in output.

Major conflicts—those involving at least 1,000 battle-related deaths—force difficult trade-offs in economies where they occur. Government budgets deteriorate as spending shifts toward defense and debt increases, while output and tax collection collapse.

These countries may also face strains on their external balances. As imports contract sharply because of lower demand, exports decrease even more substantially, resulting in a temporary widening of the trade deficit.

Heightened uncertainty triggers capital outflows, with both foreign direct investment and portfolio flows declining. This forces wartime governments to rely more heavily on aid and, in some cases, remittances from citizens abroad to finance trade deficits.

Despite these measures, conflicts contribute to sustained exchange rate depreciation, reserve losses, and rising inflation, underscoring how widening external imbalances amplify macroeconomic stress during wartime. Prices tend to increase at a pace higher than most of central banks’ inflation targets, prompting monetary authorities to raise interest rates.

Taken together, our findings show that major conflicts impose substantial economic costs and difficult trade-offs on economies that experience conflicts within their borders, as well as hurting other countries. And these costs extend well beyond short-term disruption, with enduring consequences for both economic potential and human well-being.

Spending trade-offs

More frequent conflicts and rising geopolitical tensions have also prompted many countries to reassess their security priorities and increase defense spending. Others plan to do so. This situation presents policymakers with a crucial question about trade-offs involved with such a boost to spending.

Our analysis looks at episodes of large buildups in defense spending in 164 countries since the Second World War. We find that these booms typically last nearly three years and increase defense spending by 2.7 percentage points of gross domestic product.

That’s broadly similar to what is required by North Atlantic Treaty Organization (NATO) members to reach the 5 percent of GDP defense spending target by 2035.

Ramping up defense spending primarily acts as a positive demand shock, boosting private consumption and investment, especially in defense-related sectors. This can raise both economic output and prices in the short term, requiring close coordination with monetary policy to temper inflationary pressures.

Overall, the aggregate effects on output of scaling up defense spending are likely modest. Increases in defense spending typically translate almost one for one into higher economic output, rather than having a bigger multiplier effect on activity.

That said, the multiplier or ripple effects of such spending vary widely depending on how outlays are sustained, financed and allocated, and how much equipment is imported.

For instance, output gains are smaller and external balances deteriorate when the stimulus is partly spent to import foreign goods, which is especially the case for arms importers. By contrast, a buildup of defense spending that prioritizes public investment in equipment and infrastructure, together with less fragmented procurement and more common standards, would expand market size, support economies of scale, strengthen industrial capacity, limit import leakages, and support long-term productivity growth.

The choice of how to finance defense spending entails critical trade-offs. Defense spending booms are mostly deficit-financed in the near-term, while higher revenues play a larger role in later years of defense spending booms and when the defense spending buildup is expected to be permanent.

The reliance on deficit financing can stimulate the economy in the short term, but strain fiscal sustainability over the medium term, particularly in countries with limited room in government budgets.

Deficits worsen by about 2.6 percentage points of GDP, and public debt increases by about 7 percentage points within three years of the start of a boom (14 percentage points in wartime). The resulting increase in public debt can crowd out private investment and offset the initial expansionary effect of defense spending.

The buildup of fiscal vulnerabilities can be mitigated by durable financing arrangements, especially when the increase in defense spending is permanent. However, raising revenues come at the cost of reducing consumption and dampening the demand boost, while re-ordering budget priorities tends to come at the expense of government spending on social protection, health, and education.

Policies for recovery

Our analysis also shows that economic recoveries from war are often slow and uneven, and crucially depend on the durability of peace. When peace is sustained, output rebounds but often remains modest relative to wartime losses. By contrast, in fragile economies where conflict flares up again, recoveries frequently stall.

These modest recoveries are driven primarily by labor, as workers are reallocated from military to civilian activities and refugees gradually return, while capital stock and productivity remain subdued.

Early macroeconomic stabilization, decisive debt restructuring, and international support—including aid and capacity development—play a central role in restoring confidence and promoting recovery. Recovery efforts are most effective when complemented by domestic reforms to rebuild institutions and state capacity, promote inclusion and security, and address the lasting human costs of conflict, including lost learning, poorer health, and diminished economic opportunities.

Importantly, effective post-war recovery requires comprehensive and well-coordinated policy packages. Such an approach is far more effective than piecemeal measures. Policies that simultaneously reduce uncertainty and rebuild the capital stock can reinforce expectations, encourage capital inflows, and facilitate the return of displaced people.

Ultimately, successful post-war recovery lays the foundation for stability, renewed hope and improved livelihoods for communities affected by conflict.

This IMF blog is based on Ch. 2 of the April 2026 World Economic Outlook, “Defense Spending: Macroeconomic Consequences and Trade-Offs,” and Ch. 3, “The Macroeconomics of Conflicts and Recovery.” For more on fragile and conflict-affected states: How Fragile States Can Gain by Strengthening Institutions and Core Capacities.

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PORTLAND, USA, Apr 15 2026 (IPS) - Who should be responsible for providing care and covering expenses for the elderly? Should it be governments, the elderly themselves, their families, a combination of the three, or a new societal arrangement?

As populations age and more elderly individuals live longer lives, there are relatively fewer workers and less tax revenue, causing governments to struggle with the challenge of providing care for the elderly. This struggle is particularly notable in the provision of nursing care and health services.

The challenge is mainly driven by the growing demand for care, workforce shortages, and rapidly rising costs. These issues are expected to become increasingly difficult to sustain in the upcoming years.

Furthermore, this challenge is complicated by age discrimination towards elderly individuals. This discrimination is increasingly prevalent and has a negative impact on older people’s physical and mental well-being. It is associated with earlier death, poorer physical and mental health, and slower recovery from disability in older age.

The proportion of the world’s population aged 65 years or older has doubled from 5% in 1950 to 10% today and is expected to reach 16% by 2050. Most of the world’s elderly are below the age of 75, with 41% in the age group 65 to 69 and 29% in the age group 70 to 74 (Figure 1).

Source: United Nations.

The increase in the proportion of elderly individuals is significantly greater in many countries. For example, in Japan, the proportion of elderly has increased six-fold since 1950. Similarly in Italy and China, the proportion of elderly has tripled since 1950. By 2050, it is projected that approximately one-third of the populations of Japan, Italy, and China will be elderly (Figure 2).

Source: United Nations.

In addition to population ageing, life expectancy at birth for the world’s population has increased from 46 years in 1950 to 74 years in 2026. It is projected that by 2070, the global life expectancy at birth will nearly reach 80 years, with many countries, such as France, Japan, Italy, Norway, Spain, Sweden, and Switzerland, expected to reach life expectancies at birth of around 90 years.

Elderly individuals in need of care are more likely to be women, 80-years-old and older, and live in single households. Many of them experience social isolation while living at home, which negatively impacts their mental and physical health. Additionally, these individuals typically have lower incomes than the country’s average.

The cost of providing care for elderly individuals varies drastically across countries. Costs for care are mainly driven by labor costs, healthcare infrastructure, and government subsidies.

Governments, especially those leaning towards political conservatism, are hesitant to cover the increasing expenses associated with care for the growing numbers of elderly. In the United States, for example, the president recently announced that it’s not possible for the federal government to fund Medicare, Medicaid, and child care costs. Instead, he argued that the one thing the federal government must take care of is the country’s military spending

Many high-income countries rely on migrant workers with irregular work contracts, to fill labor gaps, often operating with limited legal protections and standardized training. The situation is further complicated by poor working conditions, comparatively low salaries, and a lack of recognition making recruiting and retaining care workers difficult.

High-income countries have relatively high annual costs for care, while low-to-middle-income countries typically rely on family members to provide assisted care for the elderly.

For example, in the United States, the average annual cost in an assisted living community is approximately $75,000. Care in Switzerland is also expensive, with nursing home costs averaging over 100,000 Swiss francs annually. Similarly in Germany, the average annual cost for nursing home care is roughly between 36,000 to over 48,000 Euros.

Among OECD countries, publicly funded elder care systems still leave nearly half of older people with care needs at risk of poverty, especially those with severe care needs and low income. Out-of-pocket costs represent, on average, 70% of an older person’s median income across OECD countries.

Governments, especially those leaning towards political conservatism, are hesitant to cover the increasing expenses associated with care for the growing numbers of elderly.

In the United States, for example, the president recently announced that it’s not possible for the federal government to fund Medicare, Medicaid, and child care costs. Instead, he argued that the one thing the federal government must take care of is the country’s military spending.

Conservative and authoritarian governments typically do not see much economic benefit from government spending on elderly care, as they perceive the elderly as a societal burden. They argue that health care costs for the elderly is negatively correlated with economic growth and tend to oppose publicly funded efforts for life extension, advocating for limited government spending in these areas.

Furthermore, these conservatives and government officials often stress the importance of individual responsibility and solutions from the private sector. They believe that the costs of caring for the elderly should be borne by the elderly and their families.

However, the total cost of care for the elderly is often unaffordable for most families. In many OECD countries, elderly individuals risk falling into poverty without substantial financial assistance from their governments.

Some countries, such as Germany, Japan, South Korea, and the Netherlands, have implemented mandatory enrolment in elder care insurance. These programs are typically funded through mandatory payroll contributions.

In many countries, however, informal care for the elderly is still provided by family members, with the majority being women. This informal care is facing increasing strain due to factors such as urbanization, declining fertility rates, dual-career families, workforce mobility, and rising financial costs, all of which are putting pressure on the capacity of families to care for elderly relatives.

Although the need for elder care is rapidly increasing worldwide, the ability of existing systems to respond to current and rising needs remains limited in many countries. Most individuals in need of care rely on families and informal caregivers for support, while care services remain expensive, unstable, and difficult to access. These circumstances place significant strains on families, caregivers, and health care systems.

Further complicating care systems is the fact that elderly individuals often suffer from chronic health conditions. Some common health issues experienced by the elderly include Alzheimer’s disease, arthritis, asthma, back and neck pain, cancer, cataracts, chronic obstructive pulmonary disease (COPD), dementia, diabetes, frailty, falls and injuries, heart disease, hearing loss, high blood pressure, high cholesterol, osteoarthritis, stroke, and urinary incontinence. Furthermore, as individuals age, they are more likely to experience multiple health conditions simultaneously (Table 1).

Source: World Health Organization.

In conclusion, as a result of population ageing and increased longevity, countries are facing the challenge of providing care for their elderly citizens. The question of who should be responsible for meeting the rapidly growing need and expenses for elderly care remains a contentious issue in many countries.

The general public believes that the government should take on the responsibility of providing care for the elderly. In contrast, many governments, concerned about the escalating fiscal burden, prefer that the elderly and their families themselves provide the necessary care and be responsible for the expenses. Still, others believe that a new societal arrangement is needed to provide care for the elderly.

Joseph Chamie is a consulting demographer, a former director of the United Nations Population Division, and author of many publications on population issues.

NEW YORK, Apr 15 2026 (IPS) - Every powerful actor in the Israeli-Palestinian conflict professes to seek peace. The US and EU repeat the two-state mantra, the Arab states invoke Palestinian rights, AIPAC proclaims its defense of Israel’s security, and Israeli opposition parties promise “responsible” leadership and stability.

Yet each, in its own way, has enabled and entrenched a destructive status quo—shielding Israel from accountability, normalizing permanent ruthless occupation, and rendering Palestinian statehood ever more illusory while fueling radicalization on both sides.

The US as the Prime Enabler

Successive US administrations have long recited support for a two-state solution, yet in practice, Washington has done more to bury that prospect than to realize it. For decades, the United States has shielded Israel from real international accountability while refusing to use its vast leverage to compel any meaningful movement toward Palestinian statehood.

By turning the “peace process” into an empty ritual, the US has provided cover for a status quo that is neither peaceful nor temporary.

At the same time, unconditional US military, financial, and diplomatic backing has enabled Israel’s relentless settlement expansion and creeping annexation of Palestinian land. American officials issue ritual complaints about settlements, but the financial and military aid kept flowing and the vetoes at the UN kept coming, signaling that no red line would ever be enforced.

This toxic mix of lofty rhetoric and impunity has locked both peoples into an ever more entrenched, zero-sum conflict and foreclosed the only viable formula—two states—for ending it.

The Gaza war has stripped away any remaining illusions. Even amid mass devastation and accusations of genocidal conduct, Washington has continued to arm and protect Israel diplomatically, becoming complicit in Israel’s war crimes. To be sure, in the name of protecting Israel, the United States has gravely imperiled Israel’s viability as a democratic state and its long-term security while setting the stage for the next violent conflagration, to Israel’s detriment.

The Arab States’ Shortcomings

The Arab states, though never tiring of affirming the justice of the Palestinian cause and the necessity of a two-state solution, have consistently fallen short of their words. Although they possess enormous strategic weight—withholding or granting diplomatic recognition, and opening markets, energy, airspace, and security cooperation—they have rarely used these tools to force Israel to choose between occupation and peace with the Palestinians.

This failure has signaled to Israel that it can normalize relations with some Arab states, à la the Abraham Accords, while maintaining its grip on Palestinian land without risking any backlash.

Even in the face of Israel’s genocidal war in Gaza, most Arab governments limited themselves to statements, summits, and carefully choreographed outrage that stopped well short of meaningful pressure.

The Arab states that normalized relations with Israel continued to protect key political and economic ties, while the front-line states—Egypt and Jordan—maintained security coordination that shielded Israel from real strategic isolation.

By doing so little when so much was at stake, Arab states have become, in effect, accomplices to the perpetuation of the conflict they denounce. Their inaction has left Palestinians without a credible Arab shield, allowed Israel to entrench settlement and annexation, and pushed the two-state solution—the only realistic path to a just peace and security for both Israel and the Palestinians—to the wayside.

The EU’s Shortsightedness

The European Union is Israel’s largest trading partner and a major source of investment, technology, and diplomatic legitimacy. Yet, it has systematically refused to wield this considerable leverage to force a choice between occupation and peace with the Palestinians.

Instead of linking market access, research cooperation, or association agreements to clear benchmarks on settlements and Palestinian rights, Brussels has largely confined itself to criticism and symbolic measures that Israel has comfortably ignored.

The EU’s posture has effectively insulated Israel from serious economic or diplomatic consequences for entrenching an apartheid one-state reality of perpetual domination.

At the same time, although individual EU states, including France, the United Kingdom, and Spain, have recognized the Palestinian state, they have done virtually nothing to turn that recognition into hard power; arms exports and trade preferences continue with Israel as usual. Recognition becomes a cheap, cost-free declaration rather than a meaningful constraint on Israeli policy.

Thus, EU passivity has helped normalize occupation and settlement expansion while leaving Palestinians without an effective European counterweight, making a genuine two-state solution ever more remote, to the detriment of both Israel and the Palestinians.

AIPAC’s Culpability

AIPAC presents itself as a friend of Israel. Still, by relentlessly reinforcing the country’s most hardline positions, it has turned “pro-Israel” into a rigid orthodoxy that equates any pressure on Israeli governments with betrayal, thereby narrowing the range of policies American lawmakers feel politically safe to support.

For decades, AIPAC has backed Israeli governments without qualification—endorsing military campaigns, providing political cover for settlement expansion, and supporting a maximalist posture toward the Palestinians.

It rallies Congress behind unconditional aid, arms transfers, and diplomatic protection. This has helped Israeli leaders believe they can permanently deepen occupation and de facto annexation while still counting on automatic American support.

AIPAC has refused to use its considerable leverage to press for peace-oriented concessions and territorial compromise. Instead, it has rendered the two state solution an empty slogan while supporting the Israeli policies that make it impossible. In doing so, AIPAC has directly contributed to the ever worsening conflict and put Israel’s security under constant threat.

Still, AIPAC has not awakened from its blind support that jeopardizes Israel’s very existence and, with that, scuttles any prospect for an Israeli-Palestinian peace.

Israeli Opposition Parties’ Dismal Failure

Israel’s opposition parties have failed to offer a credible, sustained alternative to the right’s permanent conflict paradigm, and in doing so have gravely weakened Israel’s chances for peace. Instead of forcefully championing a two-state solution, most opposition leaders tiptoe around the very words “Palestinian state,” intimidated by electoral backlash and the charge of being “soft” on security. Their political inaptitude has allowed the right to define what is “realistic,” narrowing the political options to endless occupation and recurrent war.

Thus, they have directly contributed to the current impasse, making the conflict ever more intractable. Without a major party willing to argue that Israel’s long-term security depends on a two-state solution, the public hears only variations of the same message: manage, contain, punish, but never resolve. This abdication cedes the strategic debate to the extremist Netanyahu and his messianic lunatics, who are creepingly implementing their scheme of greater Israel, which would bury any prospect for peace.

It is a dire reality for the country that the opposing parties failed to coalesce and present a united front to push for a two-state solution, even following the Gaza war, which has unequivocally demonstrated that after nearly 80 years of conflict, only peace would provide Israel with ultimate security.

Every leader from these parties feels they are the most qualified to be the prime minister, but has failed miserably to offer realistic plans to end the conflict.

By failing to unite, organize, educate, and mobilize Israelis around a clear two state vision, these parties are undermining Israel’s security, eroding its international standing, and endangering its very future as a Jewish, democratic state.

The record of these five enablers is devastating. They made a just peace ever more remote, pushing Israel precariously toward an apartheid one state reality it cannot sustain morally, demographically, or strategically, while abandoning the Palestinians to the cruelest, inhumane occupation.

They must change course now—or condemn Israelis and Palestinians to generations of bloodshed that will erase Israel’s reason for being and extinguish Palestinian nationhood.

Dr. Alon Ben-Meir is a retired professor of international relations, most recently at the Center for Global Affairs at NYU. He taught courses on international negotiation and Middle Eastern studies.

IPS UN Bureau

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