With no immediate end in sight to the conflict between Russia and Ukraine, a group of academics and diplomats on Friday painted a grim picture of the continuing impact of the war on the poorest countries and even those whose economies are relatively robust.
The discussion was part of the University of the West Indies (UWI) Vice-Chancellor’s Forum on the Russian-Ukrainian War, which aired yesterday on UWItv Global.
Peter Cavendish, European Union Ambassador to Trinidad and Tobago, said the war will have consequences in many areas.
He said he was alarmed that the Russian Navy has embargoed Ukrainian ships carrying grain in the port of Odessa in Ukraine.
“It has an impact on the poorest in the world, whether it is the poor in Lebanon or the poor in Somalia,” he said.
The EU envoy claimed that the militarization of food in this way was unprecedented.
“We have seen now, perhaps never so brutally in modern times, the use of food as a weapon.”
Another panelist, Dr. Theodor Tudoroiu, Senior Lecturer in the Department of Political Science at UWI, St Augustine Campus, lamented the consequences of the war to date, highlighting the heavy loss of life, destruction of infrastructure in Ukraine, the displacement of millions of refugees and alleged war crimes committed.
He noted that apart from the ongoing crisis in Ukraine, the world was facing a sharp increase in energy and food prices.
Tudoroiu also pointed out that the European economies that have imposed sanctions on Russia are themselves very badly affected.
He argued that these elements could lead to a global recession.
According to Tudoroiu, the fallout will also have negative socio-economic consequences in countries of the South, particularly in Latin America, the Caribbean and Africa.
Just this week, the World Bank predicted that some countries are facing a recession with the impact of the war in Ukraine on many economies that had already been rocked by the onslaught of the COVID-9 pandemic.
The bank reported that less developed countries in Europe and East Asia are facing a major recession.
The bank’s forecast for Jamaica is that it will not be affected by the recession, although its growth projection has been revised.
The Jamaican economy, according to the World Bank, is expected to grow by 3.2% this year.
Risk of stagflation
In his last Global Economic Outlook report released this week, the World Bank said that the Russian invasion of Ukraine has amplified the slowdown in the global economy. He said the global economy is entering what could become a prolonged period of low growth and high inflation.
“This increases the risk of stagflation, with potentially adverse consequences for middle-income and low-income economies,” the bank said.
According to the bank, global growth is expected to fall from 5.7% in 2021 to 2.9% in 2022, significantly lower than the 4.1% forecast in January.
In April, the World Bank said Russia’s war on Ukraine had caused major supply disruptions and led to historically higher prices for a number of commodities.
“Most commodity prices are now expected to experience strong increases in 2022 and remain elevated over the medium term,” the bank had said in its outlook.
According to the World Bank, the price of Brent crude oil is expected to average US$100 per barrel in 2022, a 40% increase from 2021.
He said non-energy prices are expected to rise by around 20% in 2022, with the biggest increases for commodities where Russia or Ukraine are the main exporters.
Wheat prices are expected to increase by more than 40% this year.
Food and gasoline prices in Jamaica were also affected by the Russian-Ukrainian war.
The Statistical Institute of Jamaica reported that the point-to-point annual inflation rate in April 2022 was 11.8%.
Motorists were again hit in their pockets on Thursday with a new record spike in gasoline prices.
Petrojam has announced that a liter of 87 and 90 petrol will sell for an additional J$4.50.
Since the start of the year, gasoline prices have skyrocketed by around J$45 per litre.