Because of the war in Ukraine, the world is threatened with famine: one in five may end up in poverty

The war between Russia and Ukraine affects not only these countries, but the whole world. Many countries will face a food crisis and rising poverty. At the same time, countries that are not rich and friendly to Russia will suffer disproportionately. Writes about it with the BBC.

Photo: Shutterstock

Before the war, Russia and Ukraine were major food sellers and held leading positions in the grain and vegetable oil markets. And Russia is also the largest seller of oil, petroleum products and fertilizers, as well as the raw material for them - natural gas.

Now, those supplies are in short supply as Ukraine itself lacks food and Ukraine's grain ports are blocked by the remnants of the Russian fleet. At the same time, according to experts, it will only get worse.

This year's harvest is in doubt, as instead of seeds, the fertile Ukrainian black soil is littered with mines and wrecked Russian tanks, and farmers on tractors are constantly distracted from planting to tow captured equipment.

All this is very inopportune, especially for poor countries, where people spend a large part of the family budget on food. The world has barely recovered from the COVID-19 pandemic and last year's drought, so food prices were breaking records without a war.

Now they have soared to peaks unprecedented in all 32 years of observation - in March alone by almost 13%, and the year before that - by a third. And this is not the limit: the UN believes that they will increase by at least another 8%, and maybe by 22%.

Due to the war, fuel for agricultural machinery, transportation of goods by sea and land, loans, fertilizers and storage are becoming more expensive. There is not enough grain for both people and livestock, so the prices for meat and other food products are rising.

Despite all this, global famine does not threaten the planet.

“Even in the worst case scenario, there will be enough food in the world to feed the entire population of the planet,” experts from the Bruegel research center are confident.

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It will be hard, you will have to eat less, but hunger threatens only the poorest and most conflicted countries, like Somalia, Afghanistan or Yemen. And the Western countries will suffer the least from this war.

Which countries will suffer the most

It will be especially difficult for developing countries in dry regions - the Middle East and North Africa. They import more than 90% of all food, and their closest suppliers are Russia and Ukraine.

“With rising prices for basic food products, the humanitarian crisis and political risks will increase. The last time prices were at current heights, it turned into an 'Arab Spring,'" Bruegel researchers warn.

A decade ago, a wave of protests and revolutions led to regime change in Libya, Tunisia, Egypt and Yemen, as well as a Russian-led war in Syria.

This time, World Bank experts name Turkey, Egypt, India, Thailand, Georgia, Armenia, South Africa, Lebanon and even Sri Lanka as candidates for indirect victims of Russian aggression against Ukraine.

It is especially difficult for them now, since they are heavily dependent on trade with Russia and Ukraine, earn on tourism, do not want an open conflict with the West for violating sanctions against Russia, and in addition to all this, they are experiencing an internal economic crisis that threatens political stability.

Thus, Egypt is the world’s largest importer of wheat, and 20% of tourists before the war came there from Russia and Ukraine. As well as in Turkey, which is also 93% dependent on oil imports and 99% on gas.

Among Russia’s neighbors, in addition to Ukraine, all countries that bought food and energy from it will suffer, but even more so will those from which people often come to work, since the flow of workers and remittances will decrease.

First due to currency and transport restrictions, and then due to the slowdown of the Russian economy due to war and sanctions, falling demand for labor, real incomes, the exchange rate and the degree of tolerance for foreigners in Russia.

Before the war, remittances from citizens working in Russia accounted for about a quarter of the economy of Tajikistan and Kyrgyzstan and almost a tenth of the GDP of Uzbekistan and Armenia.

It will be hard for all of them, but hunger only threatens the poorest and most conflict-torn countries like Afghanistan or Yemen.

In the world as a whole, according to the UN, 44 million residents of 38 countries were on the verge of famine even before Russia’s attack on Ukraine. And every tenth inhabitant of the planet was undernourished - more than 720 million people. The war will increase this figure by another 8 million under the moderate UN scenario and by more than 13 million under the pessimistic one. Mainly in Asia, Africa and the Middle East.

And because of the war, poverty, want and hunger threaten 1,7 billion people - more than one fifth of humanity, says the official UN site.

Cannons instead of butter and grain

Russia is the world's largest wheat exporter, selling about 33 million tons per year. Ukraine supplies 20 million tons. They account for a quarter of world exports, but the share of total consumption is much lower, since most countries are self-sufficient in grain.

The UN still predicts that because of the war the world will miss 5 million tons of Ukrainian wheat and 3,5 million Russian. This is only 1% of world wheat consumption (770 million tons per year), and even less if you take into account almost 300 million tons in the bins.

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A good harvest in Argentina and Brazil will help partially compensate for the losses, and Russia itself is not reducing, but increasing exports.

True, against the backdrop of rising prices, each of these countries may limit exports in order to suppress inflation at home. And shipping from South America is much farther and much more expensive, as freight rates and marine fuel prices have already doubled compared to last year.

The situation is worse with other grains and, most importantly, with sunflower oil.

Here, disruptions have already driven up prices and forced millions of people in poor countries to give up traditional fried food.

Russia and Ukraine provide 57% of world supplies of sunflower oil.

Its major importers in addition to the EU were India, China, Iran and Turkey. Now they are switching to other types of vegetable oil, which leads to higher prices in the market, where there is already a terrible shortage due to the decline in palm oil production in Malaysia and last year's drought in Canada, Brazil and Argentina.

The rise in prices for grain and oil on the world market will hit poor countries even more because the share of raw materials in the final price of the product on the shelf in the store is higher there, since its other components are cheaper: labor, rent of retail space and other costs.

Therefore, when the price of grain rises, a bakery in Paris can afford not to change the price of a baguette, since its cost increases slightly, but traders in the markets in Bukhara or Tegucigalpa will have to charge more for bread. And if prices are regulated, as in many poor countries, then quality or size will have to be sacrificed. In Côte d'Ivoire, bakers have already asked the authorities for permission to reduce the weight of a baguette to 150 from 200 grams.

UN launches Global Crisis Response Team

UN chief António Guterres noted that while the main focus is on the consequences of the war for Ukrainians, it also has global implications in a world that has already witnessed rising poverty, hunger and social unrest.

“Now we are faced with the perfect storm that threatens to destroy the economies of developing countries,” said the head of the UN.

The Food, Energy and Finance Global Crisis Response Team is a 32-person team led by UN Under-Secretary-General Amina Mohammed and includes heads of UN agencies, development banks and other international organizations.

The group was launched by Guterres on March 14 in response to concerns about the potential impact of a Russian invasion of Ukraine, as well as the ongoing impact of the COVID-19 pandemic.

The group will ensure cooperation between governments, the multilateral system and a wide range of sectors to help vulnerable countries avert large-scale crises.

UN humanitarian operations are already facing funding shortfalls, with the World Food Program (WFP) warning that it does not have enough resources to feed the hungry in desperate situations. The agency urgently needs $8 billion to support operations in Yemen, Chad and Niger.

"No Peace, No Prosperity"

According to the very first UN estimates, Ukraine will lose 20-30% of its acreage and part of its exports due to the war. Other forecasts are gloomier: in the worst case, the entire harvest will remain at home and exports will fall to zero, Bruegel believes, and in the best case, it will be reduced by a third. But only if the war ends very soon.

“The full impact will not appear until next fall, when the harvest is harvested,” the study authors warn.

Western countries will be the last to suffer, they believe.

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“If you prepare in advance, you can soften the blow and the humanitarian consequences of food shortages. Large grain producers, including the EU, USA and Australia, can prepare. Because they have very efficient agriculture and a sufficient supply of free land to increase crops,” experts note.

In addition to the direct damage from Russia's invasion of fertile Ukraine, there are indirect problems of war that will only deepen the food crisis.

While the West is helping Ukraine, it has no time for Afghanistan and Yemen. The number of those in need of assistance has increased by millions, while food has become scarce, food prices have risen, transportation has become more expensive, and humanitarian budgets have stagnated or declined.

If earlier Ukraine supplied grain and oil for the UN food program, now it not only does not export, but has become a recipient of aid itself. Already 1 million Ukrainians have received rations and money for food, and the UN plans to support 3,3 million Ukrainians in the near future.

Yet of its pre-war goals of raising $19 billion by 2022 to help 137 million people around the world avoid hunger, the UN food program received less than half from donors.

There are other problems as well. Rising food prices accelerate general inflation, forcing central banks to raise rates. As a result, people, countries and companies borrow less at high rates, which in rich countries hinders development, and the poor face bankruptcy.

Many of them have fallen into debt because of the pandemic, and about 40 of the poorest countries have found themselves in a debt crisis.

The war also undermined the growth of world trade in goods, on which developing countries depend more than others. In 2020, when the COVID-19 pandemic began, trade decreased by 5%, but in the past it was able to win back losses and grow by 10%. The World Trade Organization (WTO) had been looking for nearly 5% growth this year but now predicts a modest 3% over the next two years.

This is because Russian President Vladimir Putin launched the biggest war in Europe since World War II and declared a crusade against the West.

“History teaches us that when the world economy is divided into opposing blocs and poor countries are turned away, then there is no peace or prosperity,” WTO head Ngozi Okonjo-Iweala outlined the near future.

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