Economists in Davos discussed the impact of the food and energy crises on the economies of developing countries. The head of the UN development program said the risk of default due to inflation, accelerated against the backdrop of the operation in Ukraine 34/756534746239340.jpg” alt=”The UN warned of default in 70 countries due to the conflict in Ukraine” />
The conflict in Ukraine is exacerbating the crisis in other states, and more than 70 countries may face default due to rising inflation and loan rates, UN Development Program Administrator Achim Steiner said at the World Economic Forum (WEF) in Davos. He did not specify which countries he was talking about.
“We are trying to respond to the crisis in a way comparable to its scale,— said Steiner (quoted by The Wall Street Journal).— Many emerging economies simply don't have any money left.
As former UN Under-Secretary-General Mark Malloch-Brown explained at the forum, “the three-headed hydra of energy, food and debt” will lead to a decline in the income of citizens and will affect the work of civil services in many developing countries. Steiner, in turn, pointed out that Western countries are now spending a significant part of the budget to assist other states on Ukraine, and these budgets are being cut, since, for example, European countries are also forced to allocate funds to help Ukrainian refugees on their own territory.< /p>
Shamon called unblocking the supply of grain crops from Russia and Ukraine necessary to resolve the crisis: this will eliminate the shortage that arose after the start of the Russian special operation and reduce the prices that updated records in May.
S&P Global vice chairman Daniel Yergin said the world is now, by some estimates, facing the worst energy crisis since the 1970s, when Arab countries refused to supply oil to states backing Israel. According to Yergin, now the crisis has affected not only oil, but also gas and coal. The rise in energy prices, as well as the rise in the price of wheat, increases the cost of food.
On April 12, Sri Lanka announced a default on its external debt. The Ministry of Finance of the country explained that its financial situation was undermined by the consequences of the pandemic and hostilities in Ukraine.
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