In a note published this week, the World Bank (WB) looked at theimpact of the war in Ukraine on the Middle East and North Africa (MENA) region. “The repercussions of the crisis will concretely affect the MENA economies, even if the impact will not be the same depending on the country,” explains the WB.
Indeed, the Bank predicts that the war between Ukraine and Russia, a trading partner of several countries in the area, “risks further aggravating food insecurity and the quality of life in the region, which have already been undermined by Covid-19, supply chain disruptions”.
The war, it is added, will mainly impact the price of food products, particularly wheat; the price of oil and gas; global risk aversion and security retrenchment, which could affect capital flows; remittances and finally tourism.
Countries dependent on Ukraine and Russia for their food imports will thus experience a disruption of supply chains and an increase in food prices and the costs of domestic agricultural production. The poorest and most vulnerable and those dependent on agriculture will then be heavily impacted. In this sense, the WB takes the example of Lebanon, which imports “from Ukraine and Russia more than 90% of its cereals” and which has “only about one month’s reserves”.
Conversely, some exporting countries, gas in particular, could “benefit from a structural increase in demand from Europe”. Concretely, the Bank estimates that countries such as Qatar, Saudi Arabia, Kuwait, Libya and Algeria could “observe some improvement in their fiscal balance and external balance, as well as more growth. high”.
“The worsening of the shock due to the war in Ukraine is likely to generate tragic consequences in some countries of the MENA region if humanitarian aid and development aid are not increased in 2022”, warns the Bank which assures that it is ready to intensify its support in the countries of the region, in particular on the food components.