Ukraine war is a ‘perfect storm,’ threatening food, energy, and debt crises across the globe: UN report
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Russia’s invasion of Ukraine appears to have set off a “perfect storm,” sparking multiple crises across the globe in the areas of food, energy, and debt, with devastating impacts for developing countries, the United Nations warned in a report Wednesday.
“The war in Ukraine, in all its dimensions, is producing alarming cascading effects to a world economy already battered by COVID-19 and climate change, with particularly dramatic impacts on developing countries,” the report warns. UNCTAD [the United Nations Conference on Trade and Development], which recently projected that the world’s GDP growth would be only 1% lower than anticipated due to the war in Ukraine, has warned. “
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The report describes this disruption as a “perfect storm,” coming “on the brink of a global debt crisis. “
Russian President Vladimir Putin speeches during the Valdai Discussion Club’s plenary meeting, on October,21,2021, in Sochi, Russia.
( Mikhail Svetlov/Getty Images)
Ukraine and Russia provide around 30% of the world’s wheat and barley, around 20% of its maize, and more than half of its sunflower oil. Russia is the largest oil exporter in the world and the top natural gas exporter. Russia and its neighbor Belarus together export about 20% of the world’s fertilizers.
Partially due to the war, “commodity prices are reaching record highs across the board,” the report notes. “Food prices are 34% higher than this time last year and have never been this high since [the U.N.’s Food and Agriculture Organization] started recording them. Similarly, crude oil prices have increased by around 60%, and gas and fertilizer prices have more than doubled. “
Observatory of Economic Complexity reports that 25 percent of world’s wheat comes from Russia and Ukraine.
These disruptions will harm developing countries the most, and the report warns that higher food prices are correlated with civil unrest. The war in Ukraine could spark mass protests or even civil wars elsewhere. The report states that as many as 1.7 billion people are “highly vulnerable” to the impact of the Ukraine war on global food, energy, and finance systems. Of those 1.7 billion people, 553 million are already poor, and 215 million are already undernourished.
A monument to Taras Schevchenko, a poet from Ukraine and a national symbol, is seen against the background of an apartment building that was destroyed by the Russian bombardment in Borodyanka, Ukraine on Wednesday, April 6. 6, 2022.
(AP Photo/Efrem Lukatsky)
“The impact of the war is global and systemic,” U.N. Secretary-General Antonio Guterres said at 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 being stalled and in some cases gains are receding,” Guterres added. “Many developing countries are drowning in debt, with bond deals on the rise since September last year, leading now to increased premiums as well as exchange-rate pressures. “
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