DAVOS: From soaring debt to the Ukraine war’s impact on food and energy prices, the world is facing “multiple crises”, the head of the United Nations Development Programme told AFP.
In an interview at the World Economic Forum in Davos, Switzerland, UNDP Administrator Achim Steiner discussed the challenges the planet is facing.
Here are three questions AFP asked Steiner:
“Essentially, Ukraine and Russia not selling grains as they would normally do on the world market has immediately translated into price rises, and in also an interruption of the supply chain.
We always have to remember there are countries that depend for 30, 40, 50 percent of their wheat supplies for example on Ukraine. Quite a number of African countries, Arab countries, these are immediately affected. Secondly, hundreds of millions of people are being priced out of being able to buy their basic food for their sustenance because the impact on world prices literally means they can no longer afford the next day’s meal.
And that is a grave concern. In the United Nations, we estimate that, as of May of this year, we have well over 200 million people facing acute hunger.
And the number of people that may be facing future threats is growing nowadays because of, for instance, the drought in East Africa in the Horn of Africa. And then you have the compounded effect of the fertiliser exports being stopped. So agriculture, in the short term is facing a supply chain shock.
If we could find a political agreement on how to release the stocks that are currently in the silos in the Ukraine, and how Russia and Ukraine could perhaps find an international... agreement, we would have an immediate, let’s say relief, both in terms of availability, but also prices would immediately come down, buying us time to also deal with the future of grain production.”
“The perhaps related phenomenon is that food prices are also driving a fiscal crisis. The ability of governments to purchase more expensive food on world markets is severely compromised as a result of the pandemic.
We estimate roughly 80 countries now essentially facing debt distress potentially this year. And this is obviously something that can quickly translate into also political rupture.
When people are not able to feed themselves, governments are not able to provide for food in the marketplace, then politics quickly moves on to the street, and this is something that is obviously a grave concern to many of us.
I think we have seen it in Sri Lanka. I think we could see it in Latin America, and certainly in Africa as well, because in the countries that are most likely to be facing both the extraordinary increase in price rises for food imports and energy imports.
So we are talking really about the implications touching a significant part of humanity almost instantly, and probably for about 60 to 70 countries, all three crises are happening at the same time. And that is a group of countries that we’re obviously most concerned about because that is where the international community now needs to step up. And at the moment, we’re not stepping up adequately. The first step, I think, is to introduce more liquidity into the system. And we have to deal with the fact that governments simply have run out of money on the back of the pandemic.
“I think we are struggling to some extent to comprehend both the magnitude and severity of the multiple crises that are unfolding across the globe right now. In terms of food security, affordability of energy, the cost of financing capital. These are very serious outlooks.
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