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An estimated 1.6 billion people in 94 countries are exposed to at least one dimension of the crisis, and about 1.2 billion of them live in countries highly vulnerable to all three dimensions of the cost of living crisis – food, energy and finance – according to the latest findings of the UN Secretary-General’s Global Crisis Response Group (GCRG) on Food, Energy and Financial Systems.
“For those on the ground, each day brings new bloodshed and new suffering. And for people around the world, war, along with other crises, threatens to unleash an unprecedented wave of hunger and misery, leaving behind social and economic chaos,” the Secretary-General warned. Antonio Guterres when presenting a new GCRG report.
“Vulnerable people and vulnerable countries are already being hit hard, but make no mistake: no country or community will be spared from this cost of living crisis,” he added.
A vicious circle
The ability of countries to cope with adversity in the face of growing global challenges continues to erode. To deal with the crisis, strong political will within the multilateral community and a global approach are above all necessary. The vicious circles created by the crisis show that no dimension of the crisis can be resolved in isolation.
“Addressing just one aspect will not solve the global crisis in which we find ourselves,” adds Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), who was alongside António Guterres during the presentation of the report.
“Incomes are reduced and families are forced to decide how to allocate dwindling household finances. And so with this spirit, another vicious cycle begins – the cycle of social unrest leading to political instability due to the weakened capacity of countries and families to cope with yet another global crisis, in addition to Covid-19 and the climate crisis,” she added.
FAO Photo/Stefanie Glinski
A mother feeds her children sorghum in South Sudan.
A crisis of access
Today, it is estimated that around 60% of the global workforce has lower incomes than before the pandemic. More than half of the world’s poorest countries are over-indebted or at high risk.
According to the report, the increase in hunger since the start of the war could be higher and more widespread. World Food Program estimates (WFP) show that the number of severely food insecure people has doubled from 135 million before the pandemic to 276 million in just two years. However, the ripple effects of the war in Ukraine are expected to push that number up to 323 million in 2022.
The latest food price index from the Food and Agriculture Organization of the United Nations (FAO) had already reached an all-time high in February 2022 before the start of the war, since then it has seen some of the largest month-on-month increases in its history, with its peak in March 2022.
“This year’s food crisis is linked to lack of access. Next year could be a matter of lack of food,” the UN Secretary-General said. “We need to bring stability to global food and energy markets to break the vicious cycle of rising prices and bring relief to developing countries. Ukraine’s food production, as well as the food and fertilizers produced by Russia, must be brought back to world markets – despite the war”.
António Guterres announced that he had asked Rebeca Grynspan and UN humanitarian chief Martin Griffiths to coordinate two task forces to enable “safe and secure export of Ukrainian food products through the Black Sea” and to ensure “unfettered access to world markets for Russian food and fertilizers”.
Regional implications
Despite the widespread impact of the crisis, not all regions and sub-regions are equally exposed, the report says, highlighting the fact that some countries and communities are more vulnerable than others and in urgent need of ‘assistance.
Countries in sub-Saharan Africa, for example, remain highly vulnerable, with one in two Africans in the region exposed to all three dimensions of the crisis. The Latin America and Caribbean region is the second largest group facing the cost of living crisis with nearly 20 countries deeply affected.
Extreme poverty could threaten the lives and livelihoods of 2.8 million people in the Middle East and North Africa. In South Asia, which is currently experiencing crippling heat waves, 500 million people are at serious risk from the food and financial crisis. Countries in Eastern Europe and Central Asia are highly exposed on the energy and financial dimensions, given the importance of remittances and energy exports from Russia.
The report makes policy recommendations to address the cost of living crisis, highlighting immediate action on two critical fronts – the urgent need for stability in global food and energy markets to break the cycle of rising prices and the imperative to come to the aid of developing countries, calling for resources to be made available immediately to help the poorest countries and communities.
“There is no solution to this global crisis without a solution to the economic crisis in the developing world. The global financial system must overcome its shortcomings and use all the instruments at its disposal, with flexibility and understanding, to provide support to vulnerable countries and vulnerable people,” António Guterres stressed.
“The message of today’s report is clear and compelling: we must act now to save lives and livelihoods in the months and years to come. It will take global action to resolve this global crisis,” he concluded.
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