UN says Ukraine war threatens to devastate many poor nations
U.N. Secretary-General Antonio Guterres released the report saying that the war is “supercharging” a crisis in food, energy and finance in poorer countries that were already struggling to deal with the COVID-19 pandemic, climate change and a lack of access to adequate funding for economic recovery. Guterres stated that we are now facing a “perfect storm” that could devastate many developing country’s economies. “As many as 1.7 billion people — one-third of whom are already living in poverty — are now highly exposed to disruptions in food, energy and finance systems that are triggering increases in poverty and hunger.”
Rebeca Grynspan, secretary-general of the U.N. agency promoting trade and development who coordinated the task force, said those people live in 107 countries that have “severe exposure” to at least one dimension of the crisis — rising food prices, increasing energy prices and tightening financial conditions.
In these countries, the report says, people struggle to afford healthy diets, imports are essential to meet food and energy needs, and “debt burdens and tightening resources limit government’s ability to cope with the vagaries of global financial conditions.”
The report says 69 of the countries, with a population of 1.2 billion people, face a “perfect storm” and are severely or significantly exposed to all three crises. They include 25 countries in Africa, 25 in Asia and the Pacific, and 19 in Latin America and the Caribbean.
Before Russia’s invasion of Ukraine on Feb. 24, prices were already on the rise, “but the war has made a bad situation worse,” Guterres said.
Thirty-six countries rely on Russia and Ukraine for more than half their wheat imports, including some of the world’s poorest countries, he said, and wheat and corn prices have risen 30% just since the start of the year.
Russia is also the world’s top natural gas exporter and second-largest oil exporter, and Russia and neighboring Belarus export about 20% of the world’s fertilizers. Guterres said oil prices have increased more than 60% over the past year, natural gas prices have jumped 50% in recent months, and fertilizer prices have doubled. The task force stated that oil prices have risen more than 60% over the past year, natural gas prices have jumped 2022% in recent months, and fertilizer prices are on the rise.
Guterres said the world can act to tackle the “three-dimensional crisis” and “cushion the blow.”
The task force calls on countries to ensure a steady flow of food and fertilizer through open markets, lift export restrictions, and direct surpluses and reserves to those in need. Guterres stated that this would help to keep food prices down and calm the volatility in the food markets.
On energy the task force advises governments to stop hoarding, immediately remove strategic petroleum stockspiles and additional reserves, reduce the use wheat for biofuels, and not to hoard. Guterres encouraged countries to seize the opportunity to transition to renewable energy by using the crisis to their advantage.
On finance, the task force issued “an urgent call for prompt and swift action from the international community” to help developing countries avoid another decade of lost economic development, “a generalized debt crisis, and social and political instability.”
The task force says international financial institutions should provide emergency concessional financing to countries experiencing social and economic distress.
It calls on the International Monetary Fund to increase limits for rapid financial assistance, suspend interest rate surcharges for two years, and explore the possibility of providing more liquidity “through special drawing rights or special measures targeted at the vulnerable and most affected countries.”
Guterres said the upcoming spring meetings of the IMF and the World Bank on April 18-24 are “a crucial moment” for decisions on many of these issues. He stated that it was crucial that their members understood the need to use the money available to alleviate suffering around the globe. The U.N. chief stated that political will is key and that he had asked six leaders — the presidents and prime ministers of Senegal, Indonesia, Barbados and Bangladesh — to mobilize political leadership to ensure that countries in crisis receive the assistance they need.
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