With every major global event, we wonder whether that particular event is going to trigger an economic crisis. In each economic crisis, we often wonder how long its damage will last … and to find answers to these questions, we often go back in history.
No one likes economic crises. Nothing about them is fair, even when we expect them to “impose some level of equality” they bring nothing but distress, loss, frustration and even political unrest.
Even though economists have studied all aspects of financial collapses for at least two centuries, humanity cannot yet master the means to prevent these shocks from occurring.
In our lifetime, most of us have experienced two or three global economic depressions, including the ongoing one that was triggered by the COVID-19 pandemic in the first months of 2020.
Besides the global financial calamity of the pandemic, Lebanon has gone through one of the worst economic recessions of the 21st century in the country’s history. According to the World Bank, the crisis that began in October 2019 “could be one of the three most serious the world has known since the middle of the 19th century”.
In this article, we’ll go further back in history to try to find out more about older economic recessions around the world.
1. The panic of 1866
It was the collapse of London’s Overend, Gurney, and Company bank that triggered a whole international financial crisis, given the UK’s global lead at the time. The crisis was the culmination of several periods of financial distress, those that were described as “panic” before the actual collapse of the large monetary institution.
It had been the UK’s worst financial crisis until the shock of 2008.
2. The Wall Street Crash – 1929
Who doesn’t know the Great Depression that started on Wall Street in New York before its effects hit global markets in no time? This crisis lasted for 10 years and is still considered the most serious financial crisis in modern history.
The depression led to massive deflation rates, high unemployment and a sharp drop in industrial output, in addition to spikes in poverty and homelessness.
3. 1973 oil crisis
The crisis began at the same time as a full-scale war broke out between Egypt and Syria on the one hand and Israel on the other.
In an attempt to support the Egyptian and Syrian military and political position during the war, the oil-producing Arab states decided to impose an oil embargo on Western countries that have financially supported Israel, notably the United States, Canada. , Japan, the Netherlands and the United Kingdom.
The embargo that lasted from October 1973 to March 1974 had resulted in long-term historic increases in oil prices around the world.
4. Latin American debt crisis of the 1970s
This major financial crisis is the reason why Latin American countries often refer to the 1970s as Lost decade.
The aspirations of Brazil, Argentina and Mexico to increase their industrial potential in the early 1970s prompted the three countries to borrow large sums of money from the World Bank and other international monetary bodies, which were all intended for investments in local economies.
However, borrowing against oil futures had troubled their economies amid rising oil prices during the 1970s, leaving these countries in massive debt that was considered the most serious in history. from the continent.
5. 1991 Indian crisis
It was due to more than a decade of poor economic policies that the Indian economy suffered a profound collapse in the early 1990s, a collapse that had urged international financiers including the World Bank and the IMF , to stop their aid programs in the country.
The crisis ended with the liberation of the Indian economy and the government’s decision to airlift its national gold reserves.
6. Asian crisis of 1997
The crisis started in Thailand where the local currency was floated to support the currency’s peg to the US dollar. However, the financial calamity quickly spread to other parts of East and Southeast Asia, particularly Indonesia and South Korea.
7. The Great Depression of 1998 in Argentina
The economic crisis hit the country between 1998 and 2002, affected by the Russian and Brazilian financial crises. The crisis caused extremely high unemployment rates which led to riots across the country.
According to several sources, the crisis has caused more than 50% of Argentines to live below the official poverty line while 25% have not been able to meet their needs on a regular basis.
8. 2008 accident
It was the first global economic crisis of the 21st century. Starting in the United States with a real estate bubble that caused several banks to fail, the crisis quickly infected every country in the world, causing major meltdowns all over the world and leaving millions of people unemployed for years.
First, describe how much worse the 2008 financial crisis was.
Second image, the Corona Crash being the worst drop in the market in pip value pic.twitter.com/Tse6sDuwR8
– NÃTÃRÃÃÃSâ ï¸ (@Abu_khalipha) May 27, 2021
9. 2008 Spanish crisis
The crisis lasted 6 years and was best known as the “Great Spanish Recession“. Similar to the 2008 global crash, this collapse was caused by a real estate bubble across Spain, which was made worse by banks who hid real numbers from the public and experts, fooling the real estate market until ‘it exploded in 2008.
10. Greek crisis of 2009
The Greek economy was also not affected by the global crisis of 2008, where the lack of confidence in the local economy combined with the lack of flexibility in terms of economic policies resulted in extremely high public debt, which would have reached around $ 299.7 billion and crushing the country’s GDP.
Which of these crises do you think has had the greatest impact on the world today? How many crises have you experienced?