Food, fuel, finance: the global impact of the war in Ukraine – World – ReliefWeb


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The devastating consequences of the war in Ukraine have spread far beyond the region’s borders.
Coming on top of a world made ever more fragile by COVID-19, the conflict, which has now been raging for six months, is one of the factors pushing hundreds of millions into poverty and creating this century’s biggest cost-of-living crisis.
Fuel and food prices are skyrocketing. Initially, wheat prices went up by by 62 percent compared with to beginning of the year, although they have fallen slightly.
The price of vegetable oil has more than doubled since the beginning of 2020. Sugar is up by more than 50 percent and cereals by 60 percent. Vital supplies of grains and cooking oil are disrupted.
The slight decline in commodity prices has not meant lower inflation, which continues to accelerate. The latest UN Crisis Group report says households are still worse off than a month ago.
There has been some hope from the agreement between the Russian Federation, Türkiye and Ukraine, brokered by the United Nations, to allow the export of grains and sunflower oil, although significant logistical challenges remain.
Soaring fertilizer prices, due to a lack of supply from Russia and Belarus, are forcing farmers to reduce production; the cost of cultivating crops has become more expensive than the prices they can fetch.
Rice feeds most of the world, but farmers may not be able to meet next year’s demand, with dire consequences for millions.
Food and fertilizer shortages are going to collide in 2023. This will create a vicious circle of supply and price instability and make the lives of most vulnerable even more precarious.
A recent UNDP report says 71 million people have already fallen into poverty in just three months—a rate much faster than during the pandemic. The Balkans, Caspian Sea, and sub-Saharan Africa Sahel are particularly affected.
The World Food Programme estimates the number of hungry people surged 828 million in 2021, 46 million more than the year before.
“Unprecedented price surges mean that for many people across the world, the food that they could afford yesterday is no longer attainable today. This cost-of-living crisis is tipping millions of people into poverty and even starvation at breathtaking speed and with that, the threat of increased social unrest grows by the day.” – UNDP Administrator, Achim Steiner
The crisis initially pushed a barrel of Brent oil over US$100 for the first time since 2014 and the UN Global Crisis Response Group on Food, Energy and Finance predicts wide-ranging consequences.
The Middle East is heavily dependent on Russia and Ukraine’s wheat, corn and sunflower oil. Egypt, the region’s largest country, imports 80 percent of its wheat. The International Monetary Fund says inflation in the region is running at nearly 15 percent.
Southeast Asia is suffering because it relies on imported commodities such as oil, nickel, wheat and corn.
Africa also relies heavily on Russian and Ukrainian food and fuel. Countries such as Somalia are already struggling with the brutal consequences of drought and lack of food.
A UNDP assessment says the Ukraine crisis requires urgent action and financial support.
“African governments are left with limited finances to implement adequate policy responses and protect vulnerable groups while also preventing societal and economic destabilization,” said Ahunna Eziakonwa, UN Assistant-Secretary General and Director of UNDP’s Regional Bureau for Africa. “Overall, the war in Ukraine constrains economic activity and could trigger further social tensions and unrest, which could have regional and global ramifications.”
There are real risks of famine this year, and next year could be even worse. But catastrophe can be avoided if we act boldly and immediately.
The international community now faces an immense challenge. How do we tackle the crisis in a way that safeguards the climate goals of the Paris Agreement and the justice targets of Sustainable Development Goals?
The Crisis Group report says the world needs to double down on renewables. The potential for on-and off-grid clean energy has never been more up to the task of tackling energy poverty and cutting out addiction to fossil fuels. It calls for equitable access to renewable energy technology and raw materials; policies that encourage fast track investment, shifting fossil fuel subsidies to renewable energy, and tripling renewable energy investment.
We must tackle the finance crisis, and unlock all resources to make up for the US$1.2 trillion gap in social protection, and support small farmers to increase productivity and self-reliance.
At the same time we must bring Ukraine’s and Russia’s food and fertilizer back into world markets and keep trade open.
This is a unique opportunity to transform food systems at every level, ending damaging and misguided agricultural subsidies and enabling healthy and sustainable diets for every person, everywhere.
The effects of the war will outlast the conflict. Even if peace comes tomorrow, the war’s impact will be felt in the country, the region, and the world for years to come. UNDP is committed to supporting the most vulnerable wherever they may be, and for as long as is needed.
It’s time for bold leadership that breaks with the damaging pathway that the world has been on, one that lays the groundwork for a healthy planet and a prosperous future for every person.
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