Cost of living will continue to rise for three years, Dubai World Government Summit hears

Leading economist says the pandemic has disrupted the global supply chain, driving up prices

Roberto Azevêdo, the former director general of the World Trade Organisation, speaks at the World Government Summit in Dubai on Tuesday. Pawan Singh / The National

The cost of living will continue to rise for at least another two to three years, the former director general of the World Trade Organisation has warned.

Speaking at a session at the World Government Summit in Dubai on Tuesday, Roberto Azevêdo said the pandemic has disrupted the global supply chain, driving up prices.

He spoke about how the current crisis has seen prices of items soar across the board and how governments should avoid the temptation to look inward when it comes to trading.

“Most people I talk to in different markets see this as a situation lasting a minimum of two to three years,” said Mr Azevêdo.

“I am not convinced this is a situation that can be normalised in a few months.”

Mr Azevêdo, who now serves as director of corporate affairs for PepsiCo, was speaking during a discussion at the summit titled “Is the World Economy Going Back to the 70s?” — a time when inflation rates jumped to double digits in the US on the back of soaring oil prices.

Recent developments have led some experts to speculate we could be seeing a return to those days.

Some have suggested countries could be tempted to look at self-sufficient models to build economies that are less reliant on exporting goods to other countries.

This would be a mistake, said Mr Azevêdo.

“I think countries should avoid the trap of self-sufficiency,” he said.

“Having your own supply chain completely internalised is a risk. What happens if there is a catastrophe in your own country and you have no other supply chains.

“All you are doing is inviting inefficiency.”

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