Mayank Chhaya-
Russia’s war on Ukraine is “supercharging a three-dimensional crisis — food, energy and finance — that is pummeling some of the world’s most vulnerable people, countries and economies”, United Nations Secretary-General António Guterres has said.
Serious disruptions in food, energy and finance systems caused by the war are now affecting 1.7 billion people around the world who were already impoverished and marginalized. Prospects of even deeper poverty and hunger are staring them in the face.
Guterres’s comments came while releasing a report titled “Global impact of war Ukraine on food, energy and finance systems” today.
One of the most telling and direct consequences of the war has been to expose thirty-six countries’ serious food insecurities arising out of a disruption in their wheat imports from Russia and Ukraine.
“Prices were already on the rise — the war has made a bad situation far worse. Wheat and maize prices have been very volatile since the war began but are still 30 percent higher just since the start of the year,” Guterres said.
Add to that a 60 percent jump in oil prices over the past year since Russia is a top energy supplier. Natural gas is 50 percent more expensive for that very reason.
These trends have a direct impact on fertilizer prices, which have doubled recently, and in turn have severely hit the farming sector in many agrarian economies.
Many of the most vulnerable countries have no social safety net, leaving populations of hundreds of millions in dire poverty and near starvation. Malnutrition is becoming rampant among children.
These developments are in turn saddling many developing economies with massive debts. “This is setting in motion a potential vicious circle of inflation and stagnation,” Guterres said.
With rising food prices, fears are mounting across the poor economies about an onset of social and political unrest.
“Our world cannot afford this. We need to act now. And that leads to the second point clearly demonstrated by this report: we can do something about this three-dimensional crisis. We have the capacity to cushion the blow,” the secretary-general said.
Although the report offers more than a dozen recommendations, Guterres distilled them down to a few.
“First — we must not make things worse. That means ensuring a steady flow of food and energy through open markets. It means lifting all unnecessary export restrictions. This is not the time for protectionism. It means directing surpluses and reserves to those in need. And it means keeping a lid on food prices and calming the volatility in food markets,” he said.
“Second — we can maximize this moment to push for the transformational change our world needs. Look no further than the energy crisis. In the immediate term, countries must resist hoarding, and release strategic stockpiles and additional reserves. But now is also the time to turn this crisis into an opportunity. We must work towards progressively phasing-out coal and other fossil fuels and accelerating the deployment of renewable energy and a just transition,” he said.
“And third — we need to pull developing countries back from the financial brink. The international financial system has deep pockets. I have been strongly advocating for its reform. But developing countries need help now, and the funds are there. We need to make them available to economies that need them most so that governments can avoid default, provide social safety nets for the poorest and most vulnerable, and continue to make critical investments in sustainable development,” he said.
In his judgment the crisis cannot be solved piecemeal but via global systemic solutions and reforms.
Saying that “this war must end”, he also said, “The people of Ukraine cannot bear the violence being inflicted on them.” “And the most vulnerable people around the globe cannot become collateral damage in yet another disaster for which they bear no responsibility. We need to silence the guns and accelerate negotiations towards peace, now,” he said.
In a sense, Guterres’s passionate appeal is redundant in the face of Russian Federation’s President Vladimir Putin asserting yet again that unless his goals were met the war will continue. Although wars have always had some measure of global impact, this one, in particular, is even more destructive for global economies in a highly globalized world where every country depends on every other country for something or the other. With production and supplies having been so globalized any extension of the Ukraine war is only expected to make things worse than they already are.
