20 Apr 2022 13:53

World Bank president announces $50 bln in aid in Q2 2022 for states affected by Ukraine events, $170 bln over next 15 months

KYIV. April 20 (Interfax-Ukraine) - The ongoing events in Ukraine have deepened the world's food crisis, and another 100 million people globally might fall into poverty in 2022 if such high prices persist throughout the year, World Bank Group President David Malpass said during the discussion on food security as part of the Spring Meetings of the International Monetary Fund and the World Bank.

A significant increase in financial assistance from the World Bank is expected to be announced within the next few weeks, Malpass said. A key component will be food security financing, he said.

The World Bank's package of support, including for Ukraine, countries taking refugees and developing countries affected by related economic upheavals, stands at around $50 billion for this quarter of 2022 and should rise to approximately $170 billion within the next 15 months by June 2023, he said.

The events in Ukraine pose serious threats to global food security: in the short term, there was an abrupt surge in prices for staple foods, including wheat and its substitutes, Malpass said. Besides, future harvests could be dented by higher prices for energy and fertilizers, he said.

World food and fertilizer prices grew even before February 24, so did food shortages, he said, citing a wide variety of reasons such as growing demand in combination with supply chain disruptions, currency devaluation, climate change effects, as well as growing instability and conflicts.

The deepening of the crisis over the past two months is directly related to the events in Ukraine and high-cost financial, transport and logistic hurdles that face agricultural businesses and importers today, Malpass said.

Another indicator of the deepening crisis is an 11.5% rise in the World Food Price Index, which was at all-time high levels in March and 37% higher than last year, he said. Fertilizer prices also grew in March, rising almost 20% as compared to January's prices, while urea prices have tripled since January 2021. Food prices are growing faster than inflation rates, and this tendency will persist, Malpass said.

Both developed and developing countries need to broaden access to markets by easing restrictions on exports and imports, and relaxing price regulation, should encourage food producers, allow the private sector to access markets and investment, and protect the most vulnerable groups of the population, he said.