EDITORIAL: Efforts of Turkey and the United Nations (UN), to help break the ice between Russia and Ukraine over the matter of grain exports from ports sealed because of the war, have apparently succeeded just in time to prevent widespread food shortages, even famines, in some of the poorest countries in the world.
Now, millions of tons of grain will make their way across the Black Sea and help address supply shortages and bring down prices. The UN and its agencies have been warning of “famines of biblical proportions” ever since the Covid pandemic first shut down international trade and shipping.
And the world had barely recovered from that shock when Russia’s invasion of Ukraine strained supply chains even further and sent commodity prices skyrocketing. Over the last six months alone, food prices have risen 187 percent in Sudan, 86 percent in Syria and 60 percent in Yemen; to give a few examples.
Russia’s subsequent attack on the port of Odessa, allegedly targeting a ship carrying weapons, spoiled the mood but the important thing is that the agreement reached in Turkey remains intact. Kyiv’s frustration, despite the grain trade deal, is understandable since little other than outright rejection of all Russian initiatives can be expected out of there for the time being; for very obvious and understandable reasons.
Yet there’s a reason that Ankara jumped out to reassure everybody that all was well. President Erdogan has just turned the big challenge of being the only Nato member that was scheduled to have serious talks involving Moscow into a remarkable opportunity to engineer a much-needed thaw in the standoff; which is admirable.
Truth be told, this conflict has gone wildly off course for all parties involved all across the world; and it’s also reached the stage of war fatigue rather early. Russia expected to take Kyiv “within a day”, or something like that, which didn’t happen.
The US and allies, on the other hand, expected their sanctions to break Russia rather quickly also, which they didn’t either. And if the Russian economy is suffering, the war and its commodity super cycle has also played no small part in causing the highest rate of inflation in the US in more than 40 years, just when the Fed was gearing to begin tightening after the dovish largesse of the pandemic package(s).
That, according to prominent analysts, means at least a seven-out-of-ten chance of recession in the world’s largest economy, with very obvious spillover implications for emerging and frontier markets. Erdogan must be credited for reading this compulsion, on all sides, like a sage.
The best-case scenario is the ice breaking all the way to an end of this war, of course, but that would still require one or the other to blink first; which neither is prepared to do. The most that can be expected then is to follow this breakthrough with others that will at least give all parties the excuse to take a few calculated steps back.
Because this war, like all wars, must and will eventually end. The only question is how much its principal protagonists will extract from the whole world, not the least in terms of very high prices and even the threat of famine, before they feel that their egos have been massaged enough to stop the bloodshed in eastern Europe and needless heartache from high prices almost everywhere else.
Turkey has played its part well. Now other countries, preferably those close to both sides of the divide, must also make their appearances. The world cannot afford a round of stagflation right on the heels of the trauma caused by Covid. And right now, this war is doing just that — creating difficulties for most countries for no reason at all. Perhaps Ankara will soon offer to hold ceasefire talks.
Copyright Business Recorder, 2022
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