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Global impact of war in Ukraine on food, energy and financial systems – World

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World is on the brink of a ‘perfect storm’ of crises, warns UN chief urging immediate action to avoid cascading effects of war in Ukraine

The disastrous consequences of war on global food, energy and financial markets could disrupt millions of lives

APRIL 13, 2022, NEW YORK — The war in Ukraine is triggering a three-dimensional crisis – food, energy and finance – that is producing alarming cascading effects on a global economy already strained by COVID-19 and climate change, according to new findings from the Global Crisis Response Group (GCRG).

“We are now facing a perfect storm that threatens to devastate the economies of developing countries,” said UN Secretary General António Guterres. “The Ukrainian people cannot bear the violence inflicted on them. And the world’s most vulnerable people cannot become collateral damage in another disaster for which they are not responsible.

“Our world cannot afford it. We must act now,” the Secretary-General stressed, calling for urgent, concrete and coordinated action to help countries and communities most at risk avoid interrelated crises. “We can do something about this three-dimensional crisis. We have the ability to cushion the blow.

On the edge of a perfect storm

As two of the breadbaskets of the world, Russia and Ukraine supply around 30% of the wheat and barley we consume. Russia remains the world’s largest exporter of natural gas, the second largest oil exporter and a major fertilizer producer. The war has severely affected food, energy and financial markets, pushing commodity prices to record highs. The global economy is expected to contract by 1% in 2022.

Preliminary analysis suggests that as many as 1.7 billion people in 107 economies are exposed to at least one of the three risks, mostly in Africa, Asia and the Pacific, and Latin America and the Caribbean. Combined with the already devastating effects of the COVID-19 crisis and climate change, exposure to a single risk is severe enough to cause over-indebtedness, food shortages and power outages.

Established by the Secretary-General, the GCRG aims to develop coordinated solutions to interrelated crises in collaboration with governments, the multilateral system and sectors. The GCRG Steering Committee is led by UN Under-Secretary-General Amina Mohammed.

The aim is to help vulnerable countries avoid large-scale crises through high-level coordination and partnerships, urgent action and access to essential data, analysis and policy recommendations. The development of today’s note, the first in a series, was coordinated by the Secretary-General of the United Nations Conference on Trade and Development, Rebeca Grynspan.

The world must act urgently

The brief offers a series of immediate, longer-term recommendations to avert and respond to the Triple Crisis, including the need to keep markets and trade open to ensure the availability of food, agricultural inputs such as fertilizer and water. ‘energy. It also calls on international financial institutions to urgently release funds for the countries most at risk while ensuring that there are sufficient resources to build long-term resilience to such shocks.

On foodstuffs, beyond keeping markets open and ensuring that foodstuffs are not subject to export restrictions, the note urges the rapid provision of funds for food aid humanitarian. Food producers, who face higher input and transport costs, urgently need support for the next growing season.

On energy, he calls on governments to use strategic stocks and additional reserves to help alleviate this short-term energy crisis. More importantly, the world must accelerate the deployment of renewable energy, which is unaffected by market fluctuations, to phase out coal and all other fossil fuels. “Now is also the time to turn this crisis into an opportunity. We must work to phase out coal and other fossil fuels, and accelerate the deployment of renewable energy and a just transition,” the Secretary-General added.

With regard to financing, the note calls on the international financial system, including G20 countries and development banks, to provide flexible, urgent and sufficient financing for the least developed countries in particular, and a reduction in the service of the debt under current conditions.

“We need to lift developing countries out of the financial abyss. The international financial system has deep pockets,” said the Secretary-General, calling for funds to be made available to “economies that need them most so that governments can avoid default, provide social safety nets to the poorest and most vulnerable and continue to make crucial investments in sustainable development.

“Above all, this war must end. We must silence the guns and accelerate the negotiations towards peace, now. For the Ukrainian people. For locals. And for the peoples of the world,” he added.

The launch of the conclusions comes ahead of the 2022 spring meetings of the International Monetary Fund and the World Bank Group (April 18-24).

MEDIA CONTACTS

United Nations Department of Global Communications | Devi Palanivelu | [email protected]

United Nations Conference on Trade and Development | Dan Teng’o | [email protected]

NOTE TO EDITORS

On March 14, 2022, United Nations Secretary-General António Guterres announced the creation of a Global Crisis Response Group on Food, Energy and Finance to coordinate the global response to the widespread effects of the war in Ukraine. The GCRG will provide high-level political leadership to anticipate the immense interconnected challenges of food security, energy, and finance, and mount a coordinated global response to ongoing crises. UN Deputy Secretary Amina J. Mohammed leads the group’s steering committee, providing strategic coordination of the UN system and partners.

The full brief is available here.