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Philippines: Keep trade open to support vulnerable economies
MANILA, Philippines — All countries are urged to keep their trade open to support vulnerable economies, especially net-importing ones that are bearing the brunt of rising commodity prices due to the Russia-Ukraine war.
In a joint statement, the World Bank Group, International Monetary Fund, United Nations World Food Program and the World Trade Organization called for an urgent action on food security as global tensions have yet to see an end.
“We urge all countries to keep trade open and avoid restrictive measures such as export bans on food or fertilizer that further exacerbate the suffering of the most vulnerable people,” the multilateral agencies said.
Many net-importing countries, such as the Philippines, are already suffering from high cost of commodities, both food and non-food such as oil.
However, many producing countries have imposed export ban on certain commodities to cushion the blow of the war.
Such a move spells disaster on global commodity prices and developing economies will likely be at the mercy of soaring costs of several agricultural items.
The global institutions called on the international community to immediately support vulnerable countries through coordinated actions ranging from provision of emergency food supplies, financial support, increased agricultural production, and open trade.
“We are committed to combining our expertise and financing to quickly step up our policy and financial support to help vulnerable countries and households, as well as to increase domestic agricultural production in, and supply to, impacted countries,” they said.
“We can mitigate balance of payments pressures and work with all countries to keep trade flows open. We will further reinforce our monitoring of food vulnerabilities and are quickly expanding our multifaceted policy advice to affected countries.”
The international organizations emphasized that the war between Ukraine and Russia has added to the still ongoing pandemic, coupled with threats from climate change and increased fragility and conflict.
“Sharply higher prices for staples and supply shortages are increasing pressure on households worldwide and pushing millions more into poverty,” they said.
“The threat is highest for the poorest countries with a large share of consumption from food imports, but vulnerability is increasing rapidly in middle-income countries, which host the majority of the world’s poor.”
Estimates from the World Bank showed that for every percentage point increase in food prices, 10 million people are thrown into extreme poverty worldwide.
Rising food prices are being exacerbated by record high increases in oil costs, which are key components in food production across the globe.
The organizations noted that increase in food prices and supply shocks can fuel social tensions in many countries, especially those that are already fragile.
Other proposed actions to help vulnerable countries include providing emergency food supplies and deploying financial support to households and countries, and investing in sustainable food production and nutrition security.
“We also urge the international community to help support urgent financing needs, including through grants. This should include financing of immediate food supplies, safety nets to address the needs of the poor, and for small farmers facing higher input prices,” they said.
“It is critical to quickly provide support for food insecure countries in a coordinated manner. We stand ready to work together with our multilateral and bilateral partners to help countries address this urgent crisis.”
Source: https://www.philstar.com/business/2022/04/18/2174829/keep-trade-open-support-vulnerable-economies