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.”

The World Government Summit 2022 — in pictures

Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, and Mohammed Al Gergawi, Minister of Cabinet Affairs, listen to 'ethical hacker' David Colombo speak at a session at the World Government Summit 2022. Pawan Singh / The National

Colombo, founder and chief executive of the Colombo Technology cyber security company, at the summit. Pawan Singh / The National

Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, attends the World Government Summit in Dubai. Photo: Dubai Media Office

Sheikh Mohammed, Sheikh Hamdan and Sheikh Maktoum bin Mohammed, Deputy Prime Minister, Minister of Finance and Deputy Ruler of Dubai, at the summit. Photo: Dubai Media Office

George Friedman, founder and chairman of Geopolitical Futures, at the summit. Pawan Singh / The National

The summit will conclude on Wednesday. Pawan Singh / The National

A visitor steps on to a self-driving vehicle at the summit. Pawan Singh / The National

Thousands of delegates and hundreds of speakers are attending the summit. Pawan Singh / The National

CNBC anchor Hadley Gamble, left, moderates a panel discussion featuring the UAE's Minister of Energy and Infrastructure, Suhail Al Mazrouei, Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman and Iraqi Kurdistan's Prime Minister Masrour Barzani. AFP

People arrive at the World Government Summit, being held on Tuesday and Wednesday. Pawan Singh / The National

People arrive at the World Government Summit, being held on Tuesday and Wednesday. Pawan Singh / The National

A poster shows Elon Musk, a speaker at a previous year's event. Pawan Singh / The National

Delegates at the World Government Summit 2022. Pawan Singh / The National

The conference centre at Expo 2020 Dubai. Pawan Singh / The National

The auditorium is one of the major buildings that will remain in place after the world's fair ends. Pawan Singh / The National