UNCTAD – World on brink of “perfect storm” of crises, warns UN chief calling for immediate action to avert cascading impacts of war in Ukraine
The war in Ukraine is setting in motion a three-dimensional crisis – on food, energy and finance – that is producing alarming cascading effects to a world economy already battered by COVID-19 and climate change, according to the new findings of 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 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
“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.”
*On the brink of a perfect storm*
As two of the world’s breadbaskets, Russia and Ukraine provide around 30
percent of the wheat and barley we consume. Russia remains the world’s top
natural gas exporter, second-largest oil exporter and a significant
producer of fertilizers. The war has severely affected food, energy and
financial markets, sending commodity prices to soar record high. 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. The development of
today’s brief, the first in a series, was coordinated by the
Secretary-General of the UN Conference on Trade and Development.
*The world needs to act with urgency*
The brief proposes a series of immediate to 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 energy. It also calls for international financial
institutions to urgently release funding for the most at-risk countries
while making sure there are enough resources to build long-term resilience
to such shocks.
On food, beyond keeping markets open and ensuring that food is not
subjected to export restrictions, the brief urges the prompt provision of
funds for humanitarian food assistance. Food producers, who face higher
input and transport costs, urgently need support for the next growing
On energy, it calls on governments to use strategic stockpiles and
additional reserves to help to ease this energy crisis in the short term.
More importantly, the world needs to accelerate the deployment of renewable
energy, which is not impacted 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
towards progressively phasing-out coal and other fossil fuels, and
accelerating the deployment of renewable energy and a just transition,”
added the Secretary-General.
On finance, the brief asks the international financial system, including
G20 countries and development banks, to provide flexible, urgent, and
sufficient funding for particularly least developed countries, and relief
from debt servicing under current conditions.
“We need to pull developing countries back from the financial brink. The
international financial system has deep pockets,” said the
Secretary-General 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