The volume of cereals exported from Ukraine has exceeded 5 million tonnes since the agreement between kyiv and Moscow in July, according to the UN. But she said she was worried Monday in Geneva about the price of fertilizers which could lead to a supply crisis.
“There is no doubt” that the grain agreement has had a “significant” impact, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) Rebeca Grynspan told reporters. Half of the approximately 250 shipments went to rich countries and half to developing countries.
But “it is difficult” to know where these cereals land, adds the one who brought this arrangement for the UN. According to her, no disturbances have been observed in Ukrainian ports and shipments are increasing.
The UN wants the arrangement to be renewed after four months because it “is a success in dealing with the food crisis”. But the second agreement in July, which exempts Russian exports of cereals and fertilizers from sanctions, “is an indispensable part” of this device, insisted Ms. Grynspan. However, Russia is not entirely satisfied.
The United Nations has worked to assure the United States and other actors of the application of this agreement. “We have continued to resolve this issue,” added the Secretary General. More broadly, if markets stabilize, food prices could fall further, she said. The concern now relates to the prices of fertilizers which remain “very high”.
Central banks not sufficient
According to UNCTAD’s Trade and Development Report released on Monday, real Gross Domestic Product (GDP) in the world is still expected to be lower at the end of 2023 than before the pandemic. The UN agency anticipates a slowdown in growth to just over 2% next year.
This year, global GDP should only grow by 2.5% in the end. In question, the pandemic and the war in Ukraine but also the economic response of rich countries whose central banks have quickly raised interest rates.
And this approach will not be enough to avoid a recession, asserted Ms. Grynspan. The US decision could even cost developing countries more than $510 billion, outside of China. These devices are taken more “for the credibility of central banks than for their impact,” said the director of the globalization division at UNCTAD, Richard Kozul-Wright.
“It’s a difficult period” for politicians but “there is still time to ward off the risk of a recession”, she said. “We have the tools to calm inflation and support all vulnerable groups,” she adds, citing a matter of “political will.”
Nearly 100 States exposed
According to UNCTAD, the shortfall in real GDP next year could amount to nearly 18,000 billion dollars, or 20% of world income. The slowdown will affect all regions, but especially developing countries. The average growth rate in these states should not exceed 3%.
Since the end of 2021, net capital flows to developing countries have become negative, these territories financing rich states, further deplores UNCTAD. Nearly 100 countries are exposed to multiple economic problems.
According to estimates, 379 billion dollars have already been spent by developing states this year in the face of monetary difficulties, twice the volume of new special drawing rights allocated to them. UNCTAD calls for a more permanent and wider use of these and, again, for an international legal framework for debt restructuring.
According to Mr. Kozul-Wright, the political problem stems more from a distribution crisis, due to too many dividends, than from an inflation crisis. The UN agency calls for a device to fight against the increase in the prices of energy, food and other components considered the most important. It is in favor of price controls and exceptional taxes, in particular on superprofits, as the UN Secretary General wished.
This article has been published automatically. Source: ats