Russia’s war once morest Ukraine has triggered a chain reaction in the global economy with rising energy and food prices that will deepen poverty and hunger.
This will increase the debt burden, the World Bank president said on Tuesday.
Faced with these “overlapping crises”, David Malpass urged advanced countries to keep markets open and reverse policies that concentrate wealth.
The war came as the global economy tried to recover from the Covid-19 pandemic and new lockdowns in China created uncertainty regarding the recovery, the development institution’s leader said during a briefing. a speech in Warsaw, Poland.
“Never before have so many countries experienced a recession at the same time, suffering a loss of capital, jobs and livelihoods. At the same time, inflation continues to accelerate,” Mr Malpass said. during a conference at the Warsaw School of Economics, broadcast virtually.
Emergency
Speaking ahead of the annual meetings next week of the World Bank and the International Monetary Fund (IMF), Mr Malpass pledged once more to help Ukraine rebuild following the war.
The two global donors have rapidly deployed aid for the country and the World Bank is in the process of mobilizing $3 billion in funding.
Under this program, Mr. Malpass announced that the Bank had secured donor support for $1 billion in financing through the concessional lending agency, the International Development Association (IDA-AID), as well as only $100 million for Moldova.
“The proposal will now be sent to the World Bank’s Board of Directors for approval,” he said.
Sudden shortages
Beyond the immediate humanitarian crisis caused by the war which created a flood of refugees, with four million people fleeing to neighboring countries such as Poland, “the constraints and disruptions in supply have fueled the rise in prices and worsened inequalities in the world”.
Ukraine is a major grain and fertilizer producer, and the war is “creating sudden shortages of energy, fertilizer and food, pitting people once morest each other and once morest their governments”, he said. the manager.
An “intense drought” in South America is worsening the food situation and many countries are experiencing a “food price crisis”.
“For every one percentage point increase in food prices, 10 million people are expected to fall into extreme poverty,” he stressed, adding that “malnutrition is expected to increase.”
“An indicator of this food pressure is visible when food price inflation exceeds general inflation by 4%,” Malpass noted. “By this measure, 16% of developing countries are already facing a food price crisis, and the number will increase further in the coming months.”
Protesters in Peru took to the streets to demand government action, as did people in Sri Lanka, where the government on Tuesday announced it was defaulting on its $51 billion foreign debt.
Burden
Mr Malpass issued a warning regarding the growing debt burden in developing countries, saying that total indebtedness “has risen sharply to a 50-year high, to account for 250% of government revenue”.
“Most emerging markets and developing economies are ill-prepared for the debt shock ahead,” he warned.
The head of the World Bank called on advanced countries to keep their markets open. “Most trade barriers protect the privileged at the expense of the rest of society, increasing inequality,” he said.
This article has been published automatically. Sources: ats / afp