World Bank: We are Analysing Global Impact of War in Ukraine

•Targets focused support for developing countries

Ndubuisi Francis

The World Bank President, David Malpass, yesterday said the multilateral institution was analysing the global impact of the ongoing war in Ukraine, including the spike in food and energy prices, and preparing a crisis response that would provide focused support for developing countries.

He explained that for every one percentage point increase in food prices, 10 million people were expected to fall into extreme poverty globally.

In a speech titled, “Addressing Challenges to Growth, Security and Stability,” which he delivered at the Warsaw School of Economics ahead of the 2022 IMF/World Bank Spring Meetings, Malpass said the attacks on people in Ukraine and infrastructure were causing tremendous suffering, threatening international peace and security and endangering the basic social and economic needs of people around the world.

The war and its consequences, he stated, were also creating sudden shortages of energy, fertiliser, and food and pitting people against each other and their governments. He noted that even people who are physically distant from the conflict are feeling its impacts.

He said: “Food price spikes hit everyone and are devastating for the poorest and most vulnerable.

“The rich can afford suddenly expensive staples, but the poor cannot. Malnutrition is expected to grow, and its effects will be the hardest to reverse in children.

“Trade disruptions have already sent grain and commodity prices soaring. Wheat exports from Black Sea ports have been sharply curtailed. And intense drought in South America is reducing global food production.

“Global food commodity markets are large and well-established, and – after a lag – they tend to self-adjust to disruptions in production.

“However, additional factors are making the current food supply problems more acute – namely the supply of fertilisers, energy prices, and self-imposed food export restrictions.”

The World Bank President added that fertiliser prices are dependent on natural gas prices, which have surged, noting that as liquefied natural gas (LNG) is shipped to Europe, LNG shortages are occurring elsewhere, reducing fertiliser production, and disrupting the sowing season and harvest productivity.

Malpass stated that the financial repercussions of the energy shock were intertwined with the global community’s efforts on climate change.

“We are again living through a dangerous period of overlapping crises and conflicts with Poland near the center. I have been deeply shocked and horrified at Russia’s invasion of Ukraine, the atrocities committed against the civilian population, and the loss of lives and livelihoods for millions of Ukrainians.

“The attacks on people and infrastructure are causing tremendous suffering, threatening international peace and security, and endangering the basic social and economic needs of people around the world.

“I met with President Zelenskyy on February 19 in Munich and then spoke with him after the invasion to discuss World Bank support for the people of Ukraine. Since the invasion, the World Bank Group has provided fast-disbursing financial support to Ukraine to help the government provide critical services to people, including wages for hospital workers, pensions for the elderly, and social programs for the vulnerable,” he said.

He noted that through the International Finance Corporation (IFC), the World Bank Group had provided immediate working capital for companies providing supplies to Ukraine.

The World Bank is currently preparing a nearly $1.5 billion operation for Ukraine to support the continuation of essential government services during the war, he said.

“This was enabled by yesterday’s approval of IDA19 support of $1 billion to Ukraine and $100 million to Moldova by IDA donor and recipient countries.

“The World Bank was created in 1944 to help Europe rebuild after World War II. As we did then, we will be ready to help Ukraine with reconstruction when the time comes.

“In the meantime, we are working to help Ukrainian refugees as they plan their return home; help communities as they absorb Ukrainians; and help the many millions of internally displaced persons in Ukraine who have lost their homes and livelihoods.

“We are analysing global impacts of the war in Ukraine, including the spike in food and energy prices, and preparing a surge crisis response that will provide focused support for developing countries,” he said.

He regretted that the violence is  not confined to Ukraine, adding that just over the last year, the world witnessed serious setbacks for development and security, including Afghanistan’s collapse, Lebanon’s crisis, and coups and violence across the Sahel, Ethiopia, Somalia, and Yemen.

According to him, millions of Syrians are living in refugee camps in Jordan, Lebanon, and Turkey even as inter-ethnic and inter-religious strife plagues Myanmar and other parts of Asia.

He also observed that in Latin America and the Caribbean, levels of crime and violence are alarmingly high, with some urban and rural areas controlled by criminal gangs or drug cartels.

Lamenting that the trend toward insecurity was deeply concerning, he noted that currently, 39 of the 189 member countries of the World Bank Group are experiencing open conflict situations or remain worryingly fragile.

“The number of people living in conflict areas nearly doubled between 2007 and 2020. Today, in the Middle East and North Africa, one in every five people lives in an area affected by conflict. This unraveling of security has brought a surge in the number of refugees, which more than doubled over the last decade to exceed 30 million refugees in 2020.

“The war in Ukraine has already displaced an additional 10 million people from their homes, pushing more than 4 million people – primarily women and children – into neighbouring countries, most of them to Poland and Romania,” he said.