The Russia-Ukraine war shows no sign of ending though over nine months have elapsed since it broke out in late February last. Prospects for an immediate end to the war look bleak. Instead, fighting has intensified following the attack on the Kerch Bridge connecting Russia with Crimea it annexed from Ukraine in 2014. In the meantime, the global economy is paying the price for the war and sanctions imposed by the West on Kremlin.
When the world economy was recovering from the fallout of the Covid-19, there came the Russia-Ukraine war and economic and commercial restrictions. The war and sanctions have battered the world economy, pushed up the commodity prices and disrupted the supply chains of essential items. After the Russia-Ukraine war broke out, the prices of oil and natural gas went up sharply across the globe. At the same time, the food grain has also got costlier. Repeated economic shocks due to the coronavirus pandemic, the war and the sanctions pose risks of a worldwide recession in 2023 as predicted by a number of global organisations, including the World Bank. Besides, over 50 countries are in danger of defaulting on their debt and becoming effectively bankrupt due to skyrocketing inflation, energy crisis and rising interest rates.
Meanwhile, the Turkish president deserves thanks for brokering a major deal between Russia and Ukraine in July that promised to unblock ports on the Black Sea to allow the safe passage of grain and oilseeds. Russian President Putin also says countries receiving the Ukrainian grain should be grateful to the Turkish leader for his role in brokering the agreement. Since the deal was signed, ships carrying grain from Ukrainian ports have been allowed to navigate a safe corridor through the Black Sea – an agreement that ended five months of Russian blockade. The agreement helped stave off a global food crisis as Russia and Ukraine are two of the world’s biggest grain exporters and Russia is the number one fertiliser exporter. The agreement, which was supposed to expire on November 19, has been extended by four more months.
With the rise in prices of commodities, all the poor and developing countries are struggling to cope with the emerging situation with a slowdown in growth. They are grappling to meet the rising import costs, which is eating away forex reserves. Even the rich countries are also struggling to tackle the situation.
According to the World Bank, the world may see a string of financial crises in emerging market and developing economies as the central banks across the world simultaneously hiked interest rates in response to inflation. It said the global economy is now in its steepest slowdown while consumer confidence has already suffered a much sharper decline worldwide. Under the circumstances, even a moderate hit to the global economy over the next year could tip it into recession, it said. There is currently a 98.1 percent chance of a global recession, according to a probability model run by Ned Davis Research, a global provider of independent investment research, solutions and tools.
The United Nations Development Programme has warned that over some 54 of the poorest developing countries are in danger of defaulting on their debt and becoming effectively bankrupt unless the rich world offers urgent assistance due to inflation, energy crisis and rising interest rates. Our Prime Minister Sheikh Hasina has repeatedly been calling on the international community to take measures to end the war. In her address at the 77th session of the United Nations General Assembly (UNGA) in the UN headquarters in New York in late September, she gave utmost importance to dialogue to resolve crises and disputes, urging the world community to stop arms race, war and sanctions for building a peaceful world. “My call to the conscience of the world community ‘stop the arms race, war, and sanctions, ensure food and security of the children; build peace’. We believe that antagonism like war or economic sanctions, counter-sanctions can never bring good to any nation,” she said.
She reiterated the call on many other occasions, including while virtually presenting the keynote paper in the inaugural session of the FAO (Food and Agriculture Organisation) World Food Forum-2022 and when a five-member delegation of the European Union (EU) paid a call on her at her office in the capital. The world is now a global village with all the countries heavily dependent on each other. The global economy is also far more integrated. The impact of war and sanctions globally is “glaringly clear” and the consequences will only become more pronounced the longer fighting lasts. The entire world, including women and children, is being punished due to the war and sanctions and counter-sanctions. The lives and livelihoods of the people have been put in greater risk and they are deprived of food, shelter, healthcare and education.
The writer is a columnist