The war in Ukraine has touched off a three-dimensional crisis – on food, energy, and finance – sparking a new cascade of challenges for the world, a new report says.
The war is producing alarming cascading effects on a world economy already battered by the coronavirus pandemic and climate change, the Global Crisis Response Group says in its analysis of the ongoing conflict that started with the Russian invasion of the neighboring country on February 24.
Russia and Ukraine are two of the world’s breadbaskets, providing around 30 percent of the wheat and barley the world consumes. Russia remains the world’s top natural gas exporter, second-largest oil exporter, and a significant producer of fertilizers.
But the war has severely affected food, energy, and financial markets, sending commodity prices to soar at a record high.
Consequently, the global economy is forecast to contract by 1 percent in 2022.
Preliminary analysis suggests that as many as 1.7 billion people in 107 economies are exposed to at least one of three risks, mostly in Africa, Asia and the Pacific, and Latin America and the Caribbean. When combined with the already devastating impacts of the COVID-19 crisis and climate change, the exposure to just one risk is dire enough to cause debt distress, food shortages, and blackouts.
Established by the Secretary-General, the GCRG aims to develop coordinated solutions to the interlinked crises in collaboration with governments, the multilateral system, and sectors. The Steering Committee of the GCRG is chaired by UN Deputy Secretary-General Amina Mohammed.
The goal is to help vulnerable countries avert large-scale crises through high-level coordination and partnerships, urgent action, and access to critical data, analysis, and policy recommendations.
“We are now facing a perfect storm that threatens to devastate the economies of developing countries,” UN Secretary-General Antonio Guterres told a press conference on Wednesday.
“The people of Ukraine cannot bear the violence being inflicted on them. And the most vulnerable people around the globe cannot become collateral damage in yet another disaster for which they bear no responsibility.”
“Our world cannot afford this. We need to act now,” stressed the Secretary-General calling for urgent, concrete, and coordinated action to help countries and communities most at risk avert the interlinked crises. “We can do something about this three-dimensional crisis. We have the capacity to cushion the blow.”
“We need to pull developing countries back from the financial brink. The international financial system has deep pockets,” said the UN chief asking for funds to be made available to “economies that need them most so that governments can avoid default, provide social safety nets for the poorest and most vulnerable, and continue to make critical investments in sustainable development.”
“Above all, this war must end. We need to silence the guns and accelerate negotiations towards peace, now. For the people of Ukraine. For the people of the region. And for the people of the world,” he added.
The launch of the findings comes ahead of the 2022 Spring Meetings of the International Monetary Fund and the World Bank Group that take place from April 18 to 24.
