UNITED NATIONS
Russia’s war on Ukraine threatens to devastate the economies of many developing countries that are now facing even higher food and energy costs and increasingly difficult financial conditions, a U.N. task force warned Wednesday.
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.
“We are now facing a perfect
storm that threatens to devastate the economies of many developing countries,”
Guterres said at a news conference. “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 said the world
is “on the brink of a global debt crisis.” Grynspan, who heads the U.N.
Conference on Trade and Development, pointed to Sri Lanka’s default on a debt
payment Tuesday and said other countries are asking for help.
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 said this would help keep a lid on food prices and calm volatility in
food markets.
On energy, the task force
urges governments to refrain from hoarding, immediately release strategic
petroleum stockpiles and additional reserves, and reduce the use of wheat for
biofuels. Guterres urged countries to use the crisis as an opportunity to
accelerate the transition to renewable energy.
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 said it is crucial that their
members understand the need to use money that is available to alleviate the
suffering of people around the world.
The U.N. chief said political
will is key, and announced that he has asked six leaders -- the presidents of
Senegal and Indonesia and the prime ministers of Germany, Barbados, Denmark and
Bangladesh -- to mobilize political leaders to ensure that developing countries
in crisis get the help they need.
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