Thailand
Global interest rate increases hurt Cambodia, says ADB
The increase in global interest rates has adversely affected many ADB developing member countries (DMCs) with heavy food import needs, such as Cambodia, Fiji, Georgia, Lao People’s Democratic Republic, Nepal, Philippines and Thailand, according to the Asian Development Bank report.
It pointed out that the increase in global interest rates has led to capital flight and currency depreciation, hurting the prospects of DMCs.
“While some food prices and trade restrictions had eased by July 2022, and grain shipments from Ukraine have resumed, prices remain sharply elevated from a year ago and the outlook for food security remains deeply uncertain. The rising cost and shrinking availability of fertilizers because of the Russia-Ukraine war is a major concern,” ADB said.
The report said a perfect storm of events had created the worst threats to global food security in decades.
It said the Russian invasion of Ukraine is the main driver of food price inflation but other factors are at play including the ongoing coronavirus disease pandemic which has disrupted food supply chains, macro-economic challenges, and the imposition of trade restrictions by some countries which have affected the availability of a number of food commodities.
Besides, a recent study showed that global farming productivity had been suppressed by 21 percent due to climate extremes. Scorching heat waves and droughts in major growing regions of the northern hemisphere during the summer of 2022, and extreme flooding in many parts of the world, including East and South Asia, are ominous signs of a rapidly worsening climate problem, the report noted.
It said currently millions of people are facing chronic food shortages. Record price spikes in food and fuel threaten to push many low-income families, who spend a large proportion of their household budget on these commodities, into extreme poverty. “Asia and the Pacific are in the eye of this storm with half of the world’s 600 million people classified as hungry, living in the region. In Sri Lanka, food price inflation has exceeded 90 percent and, combined with a debt crisis, is threatening to push millions into a prolonged period of hunger and poverty, while countries, such as Bangladesh and Pakistan face severe localised food insecurity,” the ADB report said.
“Short-term food security issues are not independent of long-term challenges, and while food price increases are seen as a particularly acute threat today, the food security issue could become systemic due to the adverse impact of climate change on agriculture,” said Qingfeng Zhang, chief of the ADB Rural Development and Food Security Thematic Group.
“In developing assistance packages for developing member countries, ADB is mindful of the need for longer-term actions to help mitigate the risk of future crises, as well as providing immediate support for vulnerable populations,” Zhang said.
ADB said it is working closely with a wide range of partners, including Agence Française de Développement, Food and Agriculture Organization, IAEA, OPEC Trust Funds, and World Food Programme to scale up support for food security in DMCs. That includes joint projects, as well as knowledge exchanges, which allow ADB and its partners to keep abreast of the latest food security developments in the region, the report added.
Source: https://www.khmertimeskh.com/501136852/global-interest-rate-increases-hurt-cambodia-says-adb/