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Russia’s invasion of Ukraine appears to have caused a “perfect storm”, sparking numerous food, energy and debt crises around the world, with devastating consequences for developing countries, the UN warned in a report Wednesday.
“The war in Ukraine, in all its dimensions, is having alarming cascading effects on the global economy, which is already affected by COVID-19 and climate change, with particularly dramatic impacts on developing countries,” the report warns. “The latest UNCTAD forecasts [the United Nations Conference on Trade and Development] believe that the global economy will be a whole percentage point of GDP growth lower than expected due to the war, which is seriously disrupting the already narrow food, energy and financial markets. “
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The report describes this disturbance as a “perfect storm” coming “on the brink of a global debt crisis”.
Russian President Vladimir Putin spoke during the plenary meeting of the Valdai Discussion Club on October 21, 2021 in Sochi, Russia. (Mikhail Svetlov / Getty Images)
Ukraine and Russia provide 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 its neighbor Belarus together export about 20% of the world’s fertilizers.
Partly because of the war, “commodity prices are reaching record highs across the country,” the report said. “Food prices are 34% higher than last year and have never been so high since [the U.N.’s Food and Agriculture Organization] he began to record them. In the same way, crude oil prices have risen by about 60% and gas and fertilizer prices have more than doubled. “
The Economic Complex Observatory reports that 25 percent of the world’s wheat comes from Russia and Ukraine.
These disruptions will do the most damage to developing countries, and the report warns that higher food prices are linked to civil unrest. In other words, the war in Ukraine could provoke mass protests and even civil wars in other countries.
About 1.7 billion people are “highly exposed” to the effects of the war in Ukraine on global food, energy and financial systems, the report said. Of those 1.7 billion, 553 million are already poor and 215 million are malnourished.
A monument to Taras Shevchenko, a Ukrainian poet and national symbol, is visible with bullet marks against the backdrop of a house destroyed by Russian shelling in Borodyanka’s main square, Ukraine, on Wednesday, April 6, 2022 (AP Photo / Efrem Lukatsky).
“The impact of the war is global and systemic,” UN Secretary-General Antonio Guterres told a briefing on the report, CBNC reported.
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“Inflation is rising, purchasing power is eroding, gross prospects are shrinking and development is stagnant, and in some cases profits are falling,” Guterres added. “Many emerging economies are sinking into debt, with bond transactions already rising since last September, which is now leading to increased premiums and pressure on the exchange rate.”
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