“The 2022 Financing for Sustainable Development Report: Bridging the Finance Divide,” which was released by the UN on April 12, shows that while so-called “rich” countries were able to support their pandemic recovery with record sums borrowed at ultra-low interest, the poorest countries spent billions servicing debt, preventing them from continuing “sustainable development.”
Today Secretary-General Antonio Guterres presented another report, “Global Impact of War in Ukraine on Food, Energy, and Finance Systems,” in which he did not mince his words. People are, of course, concerned about the tragic situation in Ukraine, he said, “But less attention has been paid to the global impact of the war in all its dimensions in a world that was already witnessing increased poverty, hunger and social unrest,” he said. “The war is supercharging a three-dimensional crisis — food, energy and finance — that is pummelling some of the world’s most vulnerable people, countries and economies.
“And all this comes at a time when developing countries are already struggling with a slate of challenges not of their making — the COVID‑19 pandemic, climate change and a lack of access to adequate resources to finance the recovery in the context of persistent and growing inequalities.
“We are now facing a perfect storm that threatens to devastate the economies of many developing countries….
“As many as 1.7 billion people — one third of whom are already living in poverty — are now highly exposed to disruptions in food, energy and finance systems that are triggering increases in poverty and hunger.
“Thirty-six countries count on Russia and Ukraine for more than half of their wheat imports — including some of the poorest and most vulnerable countries of the world.” He continued to tick off the effects, enumerating how the price of wheat has risen 30% since the beginning of the year. Energy prices are up 60%. The price of fertilizer has more than doubled. Development has stalled and development gains made are receding. “As prices climb, so does hunger and malnutrition — especially for young children.
“Inflation is rising, purchasing power is eroding, growth prospects are shrinking, and development is being stalled and, in some cases, gains are receding. Many developing economies are drowning in debt, with bond yields already on the rise since last September, leading now to increased risk premiums and exchange rate pressures. This is setting in motion a potential vicious circle of inflation and stagnation — the so-called stagflation,” he said.
