Measuring the economic has moved to the centre of the policy debate. Not everyone shares this assessment. Some analysts contend that the risks have been overstated and that markets have already priced in most of the downside. The evidence for this more optimistic view is real, but it rests on assumptions about stability that recent events have repeatedly challenged.

History offers some guidance, though not much comfort. Previous episodes of this kind were resolved only after a combination of sustained external pressure and a shift in domestic incentives — conditions that do not yet appear to be in place.

The bigger picture

The economic stakes are considerable. Conservative estimates suggest that disruption on this scale could shave between 0.3 and 0.7 percentage points off regional growth next year, with the heaviest burden falling on import-dependent economies and low-income households.

Ultimately, the question is not whether the system will be tested again, but how prepared it will be when that happens. On current evidence, the answer is: better than before, but not yet good enough.

Resilience is not a product you buy once. It is a capability you build and rehearse every single day.

Technology is both part of the problem and part of the solution. The same digital tools that enable faster coordination also create new vulnerabilities, from data leaks to targeted disinformation campaigns that exploit existing social divisions. This is where questions of measuring the economic become most acute.

Lessons from history

The private sector has emerged as an unexpectedly important actor. Companies with global footprints increasingly find themselves making decisions with geopolitical consequences, often without clear guidance from governments.

  • Short term: contain immediate risks and protect the most exposed groups.
  • Medium term: strengthen coordination and information-sharing between agencies.
  • Long term: invest in resilience, diversification and institutional capacity.

At the international level, the picture is mixed. While multilateral forums have produced statements of shared concern, concrete commitments — on funding, on verification, on enforcement — remain thin.

Our analysis of open-source data covering the past eighteen months points to a clear inflection point in the second quarter, when the frequency of reported incidents more than doubled. That trend has since plateaued, but at a level well above the pre-crisis baseline.

The policy response

Local communities, meanwhile, are adapting in ways that rarely make headlines. Municipal authorities, civil-society groups and private firms have developed informal networks that in some cases respond faster than national institutions.

For policymakers, the challenge is one of sequencing. Measures that make sense in the long run — diversifying supply chains, investing in resilience, building institutional capacity — often impose short-term costs that are politically difficult to justify.

Risks to watch

None of this means that a negative outcome is inevitable. But it does suggest that the window for preventive action is narrowing, and that decisions taken in the next six to twelve months will shape the landscape for much of the coming decade.

Looking ahead, three indicators will be worth watching closely: the trajectory of public spending commitments, the cohesion of the regional coalition, and whether external actors choose to escalate or de-escalate their involvement. For more context, see our research library.