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Ukraine war squeezes food supplies, drives up prices, threatens vulnerable nations

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Bread from a WFP-contracted bakery is delivered to hospitals in Kharkiv, Ukraine. © WFP

Kicking off a three-day meeting on Friday on the fallout from Russia’s invasion of Ukraine and its wider impact on food and energy prices, the head of the UN agriculture agency outlined key ways for governments to help safeguard global food security.

Under the theme Securing Global Food Security in Times of Crisis, QU Dongyu, Food and Agriculture Organization (FAO) Director-General, told agriculture ministers from G7 wealthy nations gathered in Stuttgart, Germany, that the most significant threats stem from conflict, and the associated humanitarian impact, together with multiple overlapping crises.

“Crisis represents a challenge for food security for many countries, and especially for low‑income food import dependent countries and vulnerable population groups,” he said.

A grim overview

Based on the Global Food Crises Report released on 4 May, last year around 193 million people in 53 countries/territories were officially in the Crisis phase, or worse (IPC/CH Phase 3 or above).

Other 2021 data revealed that 570,000 people in four countries were in the category of Catastrophe phase (IPC/CH Phase 5).

Just over 39 million in 36 countries faced Emergency conditions (IPC/CH Phase 4); while just above 133 million in 41 countries were in IPC/CH Phase 3. A total of 236.2 million people in 41 countries were living in Phase 2 conditions.

“Price increases always have food security implications, particularly for the poorest,” Mr. Qu reminded.

Emergency and recovery

On top of already “high prices driven by robust demand and high input costs” resulting from COVID-19 recovery, the FAO chief noted Ukraine and Russia as important players in global commodity markets, explaining that uncertainty surrounding the war has prompted further price increases.

Wheat, maize, and oilseed prices have surged in particular.

At 160 points, the FAO Food Price Index reached its highest level ever in March, averaged 158.2 points in April and remains today at a historical high.

Mr. Qu said FAO’s proposed Food Import Financing Facility would be an important tool for easing the burden of rising food import and input costs, potentially benefitting 1.8 billion people, across 61 of the most vulnerable countries.

A balancing act

Since the start of the conflict in February, export forecasts for Ukraine and Russia have been revised down as other market players, notably India and the European Union, have increased exports.

“This partly compensated for the exports ‘lost’ from the Black Sea region, leaving a relatively modest gap of about three million tonnes,” said the FAO chief.

He observed that wheat export prices surged in March, continued to edge upwards in April, and will likely “remain elevated in the coming months”.

He also called on governments to “refrain from imposing export restrictions, which can exacerbate food price increases and undermine trust in global markets”.

Wheat dependency

Turkey, Egypt, Eritrea, Somalia, Madagascar, Tanzania, Congo, Namibia and other countries dependent upon Ukraine and Russia for wheat have been greatly impacted.

Mr. Qu said that these States need to identify new suppliers, “which could pose a significant challenge, at least in the next six months”.

Fertilizer reliant

At the same time – with levels ranging from 20 to more than 70 per cent – Brazil, Argentina, Bangladesh, and other nations, are reliant on Russian fertilizer for their crops.

While Africa overall accounts for only three to four per cent of global fertilizer consumption, Cameroon, Ghana and Ivory Coast are amongst the most vulnerable countries, relying heavily on Russian supplies.

“We need to assure that key food exporting countries have access to the needed fertilizers to assure sufficient food availability for the next year,” said the top FAO official, encouraging all countries to improve fertilizer efficiency, including through soil maps and improved application.

Assisting Ukraine

To support farmers’ access to crop and livestock in the immediate and medium‑term, FAO has developed a Rapid Response Plan for Ukraine, which outlines three key actions.

The first is to maintain food production through cash and inputs for cereal crops in October, vegetable and potato production in the spring, and harvest support in July and August, for the upcoming winter crop.

Secondly, the plan advocates for bolstering agrifood supply chains, value chains and markets through public-private partnerships that provide technical support to household level and smallholder producers.

And finally, it stresses the importance of ensuring accurate analyses of food security conditions and needs as they evolve.

Coordination ‘indispensable’

“Coordinated action for Ukraine within this group is indispensable to facilitate the smooth functioning of global food markets and thus to secure food supply for all,” said the Director-General

“FAO stresses the need to support the continuity of farming operations within Ukraine; while supporting agrifood value chains”.

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Unlocking the Triple Returns from Social, Tech and Green Jobs

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New insights and initiatives at the World Economic Forum’s Annual Meeting 2022 seek to launch a jobs recovery to strengthen resilience and dynamism in economies, businesses and societies in the midst of a turbulent outlook.

Investing in education, health and care jobs can yield a triple dividend – boosting economic activity, expanding employment opportunities and generating social mobility. New modelling of the United States economy suggests that investing $1 in social jobs would yield a $2.3 return. The model estimates that $1.3 trillion in the social jobs of tomorrow could unlock $3.1 trillion in GDP returns and create 11 million jobs by 2030.
 
These jobs include 4.2 million teaching jobs, 1.8 million jobs for personal care and service workers, and 900,000 jobs in healthcare. These are the key findings of the World Economic Forum’s new report Jobs of Tomorrow: The Triple Returns of Social Jobs in the Economic Recovery, published at the World Economic Forum Annual Meeting 2022 today.
 
Developed in collaboration with Accenture, the report finds that the associated increases in productivity, increased GDP and tighter labour markets will lead to a parallel increase in real wages. Aided by technology and better skills, the jobs of tomorrow have the potential to lift living standards globally. After more than two years of turmoil in the global economy and a continued uncertain outlook, leaders need to support workers in pivoting towards a future which works for everyone. Higher wage, higher-quality, future-ready jobs are possible and benefit companies, workers and economies alike.

Good Work in the New Economy
 
As many employers and workers seek a “new normal” after the disruptions of the past few years, there is an opportunity to develop a new vision for the future of work, one that is ready for the new economy and society. Five key issues have emerged that need to be addressed to ensure better work for workers and employers alike: volatility in wages and the cost of living; divergence on the demand for flexibility; silent pandemic in well-being; an erosion of diversity, equity and inclusion gains; and the need for a reskilling revolution.
 
The Good Work Framework, a second report released at the Annual Meeting, drawing from the views of employers, unions and experts and developed in collaboration with Mercer, proposes enhancing job quality through five objectives and associated goals: promote fair pay and social justice; provide flexibility and protection; deliver on health and well-being; drive diversity, equity and inclusion; and foster employability and learning culture.
 
The Jobs Consortium
 
To support this broad agenda and to mobilize the required investments globally, the first meeting of the Jobs Consortium was held at the World Economic Forum’s Annual Meeting in Davos. The initiative comprises CEOs and ministers championing productive employment, growth in the jobs of tomorrow, new standards in the workplace and better wages for all.
 
Underpinning the Jobs Consortium is a shared understanding of the need to expand opportunity and quality in the jobs of tomorrow, with a particular focus on social, green and tech jobs as the high-growth, job-creating sectors of the future. The initiative is supported by insight products, action frameworks and a collaboration platform, which develop expert knowledge to drive tangible change, and will work closely with initiatives on developing skills for the global workforce.
 
Refugee Employment and Employability
 
Refugees are a particularly vulnerable group, often excluded from the labour markets of host economies. Over 6 million refugees have left Ukraine since February 2022, adding to the estimated 31 million people worldwide who have been forcibly displaced across borders.
 
As businesses mobilize to assist refugees with integration into host communities and workforces, the World Economic Forum’s Chief Human Resources Officers community, drawn from over 140 organizations, has launched a Refugee Employment and Employability Initiative. The initiative will pilot its work with supporting learning and job opportunities for Ukrainian refugees in Europe in its first phase and draw best practices to build a methodology for supporting system-wide global support from employers for refugees.
 
“Our ambition is to lead with action and we know that refugees bring a broad set of skills, experience and perspectives that benefit societies and businesses. Helping people find work isn’t just a humanitarian effort, it’s also good for business,” said Jesper Brodin, CEO of Ingka Group.

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New Initiative to Strengthen Cross-Border Investment in the Digital Economy

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A pioneering effort to facilitate cross-border investment in the digital economy was launched this week at the World Economic Forum Annual Meeting 2022.

The new initiative on digital foreign direct investment, the Digital FDI initiative, will implement projects in several countries to help grow Digital FDI, as the reforms to attract such investment must take place at a country level. The first digital FDI project will take place in Nigeria.

Over the past few years, the Forum has worked to find the right partners to guide the work, develop principles published in the white paper launched in 2020 and share the potential for cooperation at the G20 and other platforms of corporation.

Attracting Digital FDI requires creating digital-friendly investment climates through targeted and country-specific policies, regulations and measures. These investments involve new business models, often based on data and technology, and platform economies, as well as using non-traditional assets. The Digital FDI initiative will aim to identify and implement enabling reforms through public-private projects in emerging markets and developing countries.

“Global FDI is rebounding, following the COVID-19 pandemic, and investment in the digital economy could not come at a better time. These country projects will help grow FDI into the digital economy, which is key for long-term growth, competitiveness and sustainable development”, said Børge Brende, President, World Economic Forum.

The Digital FDI initiative will be delivered as a joint effort between the World Economic Forum and the Digital Cooperation Organization (DCO), a new international organization that seeks to enable digital prosperity for all.

“As the first and only global multilateral focused on enabling digital prosperity for all, the DCO is partnering with the Forum on a Digital Foreign Direct Investment initiative to help countries develop digital FDI-friendly investment climates. We invite digital innovators with a commitment to economic development and inclusion to join us,” said Deemah Al Yahya, Secretary-General, DCO.

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Post-COVID, Latin American Leaders Say their Countries Are Open for Business

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Rising food and energy prices and a migration crisis are posing significant economic and social challenges in Latin America, according to several leaders from the region speaking on a presidential panel at the World Economic Forum Annual Meeting 2022. However, they remain confident that investing in their economies will remain attractive.

“We cannot be indifferent in front of this humanitarian tragedy,” said Colombian President Ivan Duque, referring to challenges linked to Venezuelan migration to his country, which has seen close to 2 million cross the border over the past several years after fleeing economic hardship. Duque announced that Colombia would issue over 1 million temporary status cards to Venezuelan migrants.

Rising food and energy prices also pose threats to Latin American populations. President Luis Rodolfo Abinader Corona of the Dominican Republic noted that his government would soon authorize subsidies for corn to offset rising food prices and the increasing cost of poultry. The nation has already implemented fertilizer subsidies and support for wheat prices would likely follow.

While the region has experienced economic growth in recent years, the combined effects of the COVID-19 pandemic and supply chain and price shocks linked to Russia’s invasion of Ukraine have raised questions about future growth for a range of countries. Despite the challenges, many Latin American countries continue to tout their economies and to encourage foreign business for investment and “near-shoring”.

“Not red tape, but red carpet,” said President Rodrigo Chaves Robles of Costa Rica, on his nation’s readiness to welcome foreign investors. “Costa Rica is open for business. I will break all bottlenecks…. I will open all doors.”

Likewise, Dina Ercilia Boluarte, Peru’s Vice-President and Minister of Development and Social Inclusion, stressed the nation’s readiness for outside investors. “We will welcome you with a stable economy and legal guarantees.”

The focus of many Latin American nations is now on climate and environmental sustainability. In tourism-intensive nations, such as the Dominican Republic, the sector constitutes an essential part of GDP and employs 20% of the population. Diversifying beyond “sun-and-beach” tourism could ensure the sector remains resilient even in the face of intensifying climate change.

In addition, the region can accelerate investments in climate mitigation and renewable energy. Chaves said: “We’re improving our electricity grid to more renewables even though we have over-invested in the power generation with fossil fuels.” Transitioning energy sources in a time of rising prices poses serious challenges, he added, so the nation will need to proceed with its reforms in a way that balances current growth with sustainability goals.

Educational reform is another way Latin American leaders are preparing for digital and green energy transformations. Colombia recently completed training for 100,000 programmers, and Costa Rica is working to improve the efficiency of its education spending. Currently, the country spends twice as much as Viet Nam to educate students. While Viet Nam ranks eighth in students’ math scores, Costa Rica ranks near the bottom in terms of students’ maths performance.

Peru is promoting social inclusion by transforming how the state delivers social services to rural communities. One programme involves putting state services – such as vaccines, health supplies and training materials to reduce violence against women – on boats so officials can reach hard-to-access communities in dense Peruvian forests and remote villages. “We are bringing services of the state to our brothers and sisters to improve their quality of life,” Boluarte said.

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