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War in Ukraine sparks worst global food crisis since at least 2008, according to IMF

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Ukraine’s war-time disruptions to grain and fertilizer flows have led to the worst food security crisis since at least the one that followed the 2007-2008 global financial collapse, with some 345 million people now facing shortages that endangers his life, the International Monetary Fund (IMF) said on Friday.

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A new IMF study estimates that the 48 countries most exposed to food shortages face a combined increase in their import bills of US$9 billion in 2022 and 2023, due to the sudden increase in food prices and fertilizers caused by the Russian invasion.

This will erode the reserves of many fragile and conflict-affected states already facing balance of payments problems after a ravaging pandemic and rising energy costs, said the IMF.

“For this year alone, we estimate that highly exposed countries need up to US$7 billion to help the poorest households cope,” said the managing director of the IMF, Kristalina Georgievand other officials of the institution in a blog.

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The war in Ukraine has worsened a food crisis that has been deepening since 2018, due in part to the increasing frequency and severity of weather disasters and regional conflicts, they said.

The Fund called for a rapid increase in humanitarian aid through the World Food Program and other organizations, as well as targeted fiscal measures in affected countries to help the poor. However, he said that governments should give priority to fighting inflation.

“Short-term social assistance should focus on providing emergency food aid or cash transfers to the poor, such as those recently announced by Djibouti, Honduras and Sierra Leone”said georgieva.

The Fund also called for the removal of food export bans and other protectionist measures, citing a World Bank analysis that these restrictions add up to 9% of the increase in world wheat prices.

The new study and recommendations were released at the same time that the Executive Board of the IMF It approved greater access to emergency financing for one year, through a new food crisis window for the most vulnerable countries.

The new emergency facility could provide up to $1.3 billion of additional IMF financing for Ukraine.

Ukraine was among the top five grain exporters before the war, accounting for 15% of world maize shipments and 12% of wheat shipments, and resumption of trade from Black Sea ports, under an agreement with Russia, it has only partially alleviated the shortage. However, the conflict is reducing Ukraine’s future crop production.

Russia, also a major grain exporter, reduced exports earlier in the year to neighboring former Soviet republics. Both Russia and Ukraine have been major exporters of fertilizers.

With information from Reuters

Source: Gestion

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