May 22, 2022

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World Bank: Ukraine crisis heightens risk of 'bad politics'

World Bank: Ukraine crisis heightens risk of ‘bad politics’

The World Bank official, in an interview with “Sky News Arabia” in the run-up to the World Government Summit in Dubai, said the bank expects a slowdown in the growth of the world economy due to the Ukrainian crisis, but that governments should not panic and trust bad policies in the face of challenges posed by the crisis.

When asked about the immediate effects of the crisis, he said, “Of course, we are closely monitoring the situation. The impact we will see in the short term is, of course, rising food and energy prices. As you mentioned, Russia and Ukraine play a major role in wheat production, so the biggest impact on countries is Will fall. ” It depends heavily on the massive imports of wheat from Russia and Ukraine, where wheat is the basis of its diet. That is, in many countries in the Middle East and North Africa, including some weaker countries such as Yemen, this is the first effect we see and this should be noted.

Mary Elka was treated compared to the crisis Food The world saw in 2008, “People should not panic because … Ingredients Food is available and production of wheat, rice and other grains is currently adequate. The problem is related to the ability to bear the cost and deliver the goods to the required place, due to the disruption of the supply chain. And there is turmoil. “

The World Bank official added: “The answer is fourfold, first of all, to avoid opening trade and imposing restrictions on exports and ensuring that supply is functioning well, otherwise prices will rise further.”

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At an affordable price, she said World Bank It has already received requests from many countries, and we are working with many countries to ensure that governments implement social security programs aimed at protecting the weaker and more vulnerable from rising prices.

According to the third line, “Currently the situation is unique because it includes not only food but also the production of fertilizers because Ukraine and Russia supply fertilizers and the materials they use. It must be here as well. Ensuring that they are for the planting season should also be supported, as the next stage should be considered, not just the immediate stage. “

In the fourth and final phase, the World Bank official said, the bank responds in the short term, “they can see the problem in the medium and large scale, which is food insecurity and how to use fertilizers, for example, in a more efficient way to increase production and implement sustainable agricultural practices.” Or start it to address the issue of food insecurity, and this aspect is linked to climate change and to the current crisis. “

Marie Elka reviewed other challenges, saying, “The path of food prices and energy prices will certainly lead to inflation and increase uncertainty, and this will have an impact on the capital flow of developing countries, while we expect an increase in interest rates.” The crisis will have a financial impact on developing countries. The cost of debt or the potential flow of capital, so be careful about these things. “

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He warned that the consequences of the current crisis would be difficult to predict because the situation would continue to change, “he said.” , But I think we expect a recession in the growth of the world economy. “

Mary Elka reiterated the warning of panic that countries would be affected differently and that commodity exporters would benefit in one way or another, but that such policies would only aggravate the situation. Lead to crisis.

He considered the opportunity to help countries, anticipate the right response and formulate the right policies to address the challenges of the food supply chain, saying, “This is an opportunity to change policies and empower companies in response to this short period of time. Time crisis.”

The world faced a food crisis in 2008, when countries imposed export restrictions and imposed price controls, which “exacerbated rising prices and food shortages for poor countries, and we do not want to do it again.”