© Reuters. FILE PHOTO: Residents of a small apartment building do housework outside their units during the lockdown to contain the coronavirus disease (COVID-19) in a slum area in Tondo, Manila, Philippines, May 4, 2020 .REUTERS/Eloisa Lopez/File photo
WASHINGTON (Reuters) – A surge in food and energy prices triggered by Russia’s invasion of Ukraine will push more than 40 million people into extreme poverty, the Center for Global Development (CGDEV) said on Friday, warning against export curbs and sanctions on Russian food production.
In an analysis blog https://www.cgdev.org/blog/price-spike-caused-ukraine-war-will-push-over-40-million-poverty-how-should-we-respond, the Washington think tank stated that since Since the conflict began, food commodity prices have risen above the levels of the 2007 and 2010 price spikes. It cites World Bank research showing that the 2007 price surge may have pushed as many as 155 million people into extreme poverty, and separate research showing that the 2010 event pushed 44 million people into extreme poverty.
“The magnitude of price increases seen so far has been similar to that seen in 2010, and our analysis suggests that by 2022, at least 40 million people will be pushed into extreme poverty by a surge in prices,” the CGDEV researchers wrote.
The World Bank defines extreme poverty as living on less than $1.90 a day.
The most immediate concern, the researchers said, were direct wheat customers in Ukraine and Russia, which together account for more than a quarter of world wheat exports. These include Egypt, Indonesia, Bangladesh, Pakistan, Azerbaijan and Turkey, but global prices will rise as importers scramble for alternative supplies.
Households in low-income countries spend nearly half their budget on food, and higher prices will force “hard choices between food and other necessities”.
The CGDEV blog urges development agencies and international financial institutions to act quickly to respond to the apparent increase in humanitarian needs worldwide, and that wealthy governments should provide supplementary funding to these agencies ahead of the looming food crisis.
Neither Fusion Media nor anyone associated with Fusion Media shall be liable for any loss or damage arising from reliance on information such as data, quotes, charts and buy and sell signals contained on this website. Please fully understand the risks and costs associated with trading in financial markets, which is one of the riskiest forms of investing.