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July 8, 2022

Institute for Global Change – Tackling the International Fallout of Russia’s War in Ukraine

It must be made clear globally that this is not a short-term crisis. The World Bank has already warned that higher food prices could cause lasting damage to low- and middle-income countries, potentially pushing millions into poverty. While the short-term impacts of the war on global food markets are unavoidable, the international community needs to act fast to mitigate future impacts as much as possible.

Food prices at record highs are not the only knock-on effect of Putin’s invasion. UK consumers are already all too aware of the risks of soaring energy costs, with the average UK household set to experience a £2,553 drop in income this year, according to the Centre for Economics and Business Research – half of which is a direct result of the war.

Yet again, soaring prices – driven up in part by European countries scrambling to find non-Russian sources of gas and oil – are felt most acutely in places already facing precariousness and instability. As advanced economies, such as the UK, replace Russian energy with other sources, many low- and middle-income countries are left facing increased competition for the oil and gas they were previously importing from elsewhere, forcing energy prices up.

This means that while the situation is bad in some EU countries, it is even worse for many in developing countries. Between the end of this February and the beginning of this April, for example, the price of petrol increased by 63 per cent in Sudan and 42 per cent in Sierra Leone, compared to 9 per cent in the UK.

But it’s not just a question of consumers being able to afford to refuel their cars. Increasing energy prices also have a direct impact on the already high cost of food, leaving many countries facing a perfect storm as the expense of both securing and transporting food soars. This deadly combination is not just impacting individual consumers; it’s also putting severe restraints on humanitarian efforts to support the most vulnerable.

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