Russia’s invasion of Ukraine appears to have triggered a “perfect storm”, triggering multiple food, energy and debt crises around the world with devastating consequences for developing countries, the United Nations has warned in a report. Wednesday.
“The war in Ukraine, in all its dimensions, is causing alarming catastrophic effects on a global economy already affected by COVID-19 and climate change, with particularly dramatic effects on developing countries,” the report warns. “Recent UNCTAD forecasts [the United Nations Conference on Trade and Development] “They estimate that the world economy will be a full percentage point of GDP growth lower than expected due to the war, which is severely disrupting the already narrow food, energy and financial markets.”
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The report describes the disruption as a “perfect storm” coming “on the brink of a global debt crisis”.
Russian President Vladimir Putin speaks during the plenary session of the Valdai Discussion Club on October 21, 2021, in Sochi, Russia. (Mikhail Svetlov / Getty Images)
Ukraine and Russia supply about 30% of the world’s wheat and barley, about 20% of corn and more than half of sunflower oil. Russia is the world’s largest exporter of natural gas and the second largest exporter of oil. Russia and neighboring Belarus together export about 20% of the world’s fertilizers.
In part because of the war, “commodity prices are reaching record highs at all levels,” the report said. “Food prices are 34% higher than at that time last year and they have never been so high since then. [the U.N.’s Food and Agriculture Organization] started recording them. “Similarly, the prices of crude oil have risen by about 60% and the prices of natural gas and fertilizers have more than doubled.”
The Observatory for Economic Complexity reports that 25 percent of the world’s wheat comes from Russia and Ukraine.
These disturbances will further harm developing countries, and the report warns that higher food prices are associated with civil unrest. In other words, the war in Ukraine could spark mass demonstrations and even civil wars in other countries.
As many as 1.7 billion people are “highly exposed” to the effects of the war in Ukraine on global food, energy and finance systems, the report said. Of those 1.7 billion people, 553 million are already poor and 215 million are already malnourished.
A monument to Taras Shevchenko, a Ukrainian poet and national symbol, can be seen with bullet marks in the background of an apartment building destroyed by the Russian bombing in the main square in Borodyanka, Ukraine, Wednesday, April 6, 2022. (AP Photo / Efrem Lukatsky)
“The impact of the war is global and systemic,” CBNC quoted UN Secretary-General Antonio Guterres as saying in a statement.
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“Inflation is rising, purchasing power is eroding, gross prospects are shrinking and growth is slowing and in some cases profits are falling,” Guterres added. “Many emerging economies are drowning in debt, with bond deals already on the rise since last September, now leading to higher premiums and exchange rate pressures.”
