The destruction of the global economy has exacerbated suffering in the world’s poorest countries. Recovering from the massive decline caused by the disease, low -income countries (LICs) are hard hit by rising household prices and rising global interest rates. The collapse in global commodity markets due to the disease, increasingly insignificant in Ukraine, has led to food and fuel shortages and rising commodity prices. This is destroying real income, increasing food insecurity, and exacerbating extreme poverty in LICs. Rising global food prices, which have reached record highs this year, are contributing to the rapid rise in LIC inflation ( Figure 1).
Food insecurity is exacerbating misery
Consumption accounts for 45 percent of total household expenditure in low -income countries, and basic food intake includes wheat. All LICs are food insecure countries that are dependent on imported food. Wheat imports from Russia and Ukraine alone account for 14 percent of the total caloric intake in the LIC, compared to only 3 percent in the middle of the market and economic development. Disruptions in grain imports from Russia and Ukraine and rising global food prices are slowing the growth of the LIC and increasing. poverty, especially in countries where large sections of the population face food insecurity (Figure 2).
Figure 2. Wheat imports and food insecurity in LICs
Sources: Global Network Against Food Crises; Comtrade (records); World Bank. See the article : The US is urging countries to reach out if they have problems with Russian food, exporting fertilizer.
Note: DRC = Democratic Republic of Congo. Such grain imports are on average for 2019-2020; Grain import data for Sudan is only available for 2018. “People with food insecurity” shows the approximate percentage of the population that is in section 3 or above of the Food Criteria Corporation (IPC) for 2022; not available for Madagascar and Togo.
The slowdown in growth and the expansion of public finances have hampered the ability of governments to deter vulnerable people from rising food and fuel prices. Even though LICs do not rely on grain imports from Russia and Ukraine, millions of people struggle to buy food to avoid starvation. Increased hunger and malnutrition are bound to have long -term adverse effects, adding to the negative effects of overeating and malnutrition. two years of disease in people’s money.
Disasters associated with war and rapid global growth are exacerbating other ongoing problems facing LICs, including increasing poverty, deteriorating security, and policy instability. . As a result, the growth models for 2022 given in the World Bank’s recent report that Global Economic Prospects have been reduced to more than 80 percent of LICs (Figure 3). . Per capita income growth in LICs is expected to slow to 1.3 percent this year — much lower than in low-income countries (2.3 percent) and low-income countries. high income (2.4 percent).
Figure 3. Forecast revisions to 2022 growth
Note: EMDEs = emerging markets and economic developments; LICs = low income countries. Examples include 145 EMDEs and 22 LICs. See the article : Memorandum on the Partnership for Global Infrastructure and Investment. A review of the data shows that the share of countries decreased / changed / improved between the January 2022 and June 2022 editions of Global Economic Prospects. The data for 2022 are data.
In the LIC of exports, rising commodity prices will only partially mitigate the adverse effects of higher food and fuel prices. In these countries, rising living costs are reducing revenues as a result of increasing foreign exchange earnings. High oil prices may not be able to boost the growth of LIC energy exports, due to oil delays as well as diseases that delay maintenance and weak funding. expenditures for increased oil production.
The small farms in most LICs are expected to remain in disarray, leading to further food production. Some LICs are facing severe drought conditions and late planting due to inclement and poor rainfall. In some LICs, high grain prices are expected to limit the ability of farmers, especially those who rely on subsistence farms, to purchase seeds for the new planting season and feed them. lafumanu. The war in Ukraine has also disrupted the world supply of fertilizers. Lack of access to agricultural resources can lead to a state of low -income agriculture, and even more. the concern of the LIC’s food supply in emergencies.
More suffering ahead
These specific expectations can be further weakened when supply shortages, conflicts, and divisions persist. With almost all LICs dependent on grain imports, a long -term disruption to global trade in cereals will undermine the ability and availability of basic foodstuffs. Other increases in agricultural prices — such as grains, oil, and fertilizer — could lead to higher food prices. These pressures will be most severe in LICs as climate change has already undermined agricultural productivity and those at high risk of extreme poverty. On the same subject : Iowa’s food pantries are experiencing high demand due to the scarcity of the supply chain. In this environment of high inflation, more exposure to deteriorating living conditions will increase social unrest, especially in countries suffering from high levels of insecurity and violence. As financial conditions deteriorate, the risk will be greater which will lead to higher borrowing costs in LICs. High government debt and rising unsatisfactory loans could hamper progress in debt relief. About one -quarter of all LIC’s external debt is interest -bearing, compared to only 11 percent in 2010.
Quick and coordinated responses needed
Weakened by disasters over the past two years, LIC is facing strong winds. Access to national financial answers and monetary policy is limited in many ways. A global concerted effort is needed:
In the world’s poorest countries, a quick and economic recovery is the surest solution to all of these problems, including climate change.
