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But the war has deeply affected countries much further afield, too. The havoc in Ukraine and the sweeping regime of new sanctions imposed on Russia have roiled a global economy already stumbling amid a protracted recovery from the pandemic. Analysts point to evidence of massive supply chain disruptions, leading to sky-high oil and natural gas prices as well as shortfalls in agricultural exports from Russia and Ukraine — all of which in turn have driven up inflation for consumers all around the world. Per Bank for International Settlements figures, 60 percent of “advanced” economies are experiencing annual inflation rates above 5 percent; the majority of emerging economies are seeing rates above 7 percent.
In the United States, ordinary Americans are feeling the pinch at the pump, with fuel prices soaring and likely to dominate the country’s upcoming midterm elections. In Britain, consumer price inflation reached its highest levels in three decades.
But the situation is far more dire in poorer nations with fewer means to cope. Across the developing world, the cost of essential commodities — from wheat and cooking oil to coal and natural gas — had already risen to worrying highs before Russian forces advanced into Ukraine in late February.
In some places, the war appears to have tipped things over the edge. “Taken together with the uneven recovery from COVID-19, the surge in inflation, and the tightening of monetary policy, the war adds to an already inhospitable environment for fragile, heavily indebted low-income and emerging market economies,” wrote economic historian and geopolitical commentator Adam Tooze.
That’s the case in Sri Lanka, which is on the verge of temporarily defaulting on its debts while weeks of power cuts and surging food and fuel prices prompted mass protests against the government. “The effects of the covid-19 pandemic and the fallout from the hostilities in Ukraine have so eroded Sri Lanka’s fiscal position that continued normal servicing obligations has become impossible,” the Finance Ministry said in a recent statement.
Across the Arabian Sea in Pakistan, the unbearable spike in cost of living dovetailed with a slow-rolling political crisis led to the ouster of populist Prime Minister Imran Khan last weekend. His rivals, now in power, face the no-less daunting task of assuaging public anger over inflation, while going to international lenders cap in hand in search of a new deal to service Pakistan’s debt.
“For the future shape of the world economy, how the world deals with debt crises triggered by this war in places as far apart as Sri Lanka and Tunisia are likely to be at least as important as Russia’s desperate efforts to circumvent sanctions in its trade with China and India,” Tooze wrote.
In much of the Arab and Muslim world, iftar dinners during Ramadan are being marked by shortages of customary foods, with soaring prices making basic staples scarce. Fadhila Khalfawi, a resident of the Tunisian capital Tunis told the Christian Science Monitor that she’s now breaking her fast with a meager soup and salad. “I don’t really know a lot about war, but from what I can see, this war is taking place in Ukraine, but its impacts are being felt in Tunisia,” Khalfawi said.
Tunisia is heavily dependent on wheat imports from Ukraine and Russia. And it’s hardly alone: Countries like Egypt, Turkey, Bangladesh and Iran buy more than 60 percent of their wheat from the two warring states. The trickle-down effects of the conflict are coming into view.
At least 20 percent of Ukraine’s planted wheat “may not be harvested due to direct destruction, constrained access or a lack of resources to harvest crops,” the U.N. Food and Agriculture Organization said last week. Its world food-price index in March reached the highest level since it started in 1990.
“The U.N. agency cut its forecast for global cereals trade to 469 million tons, down 14.6 million tons from its March estimate, citing the interruption of exports from Ukraine and Russia,” noted my colleague David J. Lynch. “Lower trade volumes will crimp food imports across much of the Middle East and North Africa, raising concerns over hunger and political instability.”
“The World Food Program has said that 41 million people in West and Central Africa may be affected by a food and nutrition crisis this year, as the region confronts the highest prices in a decade for products like grain, oil and fertilizer,” wrote my colleague Amy Cheng.
As my colleague Max Bearak recently reported, Ukrainian farmers are well aware of the gravity of the situation. “Ukraine is actually full of grain. Our stocks are full,” Dmytro Grushetskyi, an industrial farmer in central Ukraine, told him, gesturing to the inability to move their product in the middle of the war. “But now we can’t get the grain out, which means Ukrainian farmers, and the rest of the world, are screwed.”