The World Food Programme has published its report on the security implications of the conflict in the Ukraine. The war has disproportionately affected the developing world, significantly worsening the situation on the African continent which relies on wheat imports from the Ukraine and Russia.

• The international community has imposed sanctions in response to the invasion. A key measure is the freezing of the Russian Central Bank’s access to its reserves in the EU, United Kingdom, United States, Canada, Switzerland and Japan; another is restrictions on financial institutions, including cutting off access to SWIFT for selected Russian banks. In a recent escalation of the sanctions, the United States, Canada and the United Kingdom have banned Russian energy imports while the EU has pledged to end its dependence on Russian gas. Sanctions so far exclude payments for food commodities and fertilizer.
• The sanctions are beginning to hit the Russian economy hard. The Russian Central Bank has raised interest rates to a staggering 20 percent, while the Russian rouble has lost nearly 40 percent of its value against the US dollar within two weeks.
• The main expected effect of the conflict on global food security comes through the impact on global grain and energy markets. International food and fuel prices have increased sharply since the onset of the conflict; this will ultimately affect local food prices and, because of this, access to food. At the same time, grain and oil price hikes increase the cost of WFP’s operations, reducing the ability to serve those in need just when it is most required.
• Adding to the challenges, the Ukraine conflict does not happen in a vacuum. New COVID-19 variants and supply chain issues have disrupted the global economic recovery, while rising inflation and record debt constrain countries’ ability to address renewed problems.
• Poorer countries are struggling the most to recover from the pandemic’s economic fallout, left behind by a lack of access to vaccines and lower capacity to finance stimulus measures. About 60 percent of low-income countries are currently in, or at high risk of, debt distress, compared with 30 percent in 2015. Despite sluggish economic growth, inflation has been on the rise – and with it the risk of stagflation.

Please read the fulle report here.