World Bank president announces support of $50 bln for current quarter, $170 bln for 15 months to countries affected by war in Ukraine

Russia's invasion of Ukraine has triggered major threats to global food and nutrition security, and if food prices stay this high for a year, global poverty could go up by more than 100 million, World Bank Group President David Malpass said at the U.S. Treasury's event on "Tackling Food Insecurity: The Challenge And Call To Action."

"Let me say a few words about our response. We expect to launch an overall surge in our financial support in coming weeks. Funding for food security will be an important component," he said.

"Our package of support - including Ukraine, countries hosting refugees, and developing economies suffering collateral economic shocks - is in the range of $50 billion dollars in the current quarter of 2022 and should reach about $170 billion in the 15 months through June 2023," Malpass said.

He said that Russia's invasion of Ukraine has triggered major threats to global food and nutrition security. In the near-term, there has been a pronounced spike in the prices of key food staples, including wheat and wheat substitutes. Second, future harvests may be reduced due to higher energy and fertilizer prices.

Malpass said that global food and fertilizer prices were already on the rise prior to the war. Food and nutrition insecurity were also rising, he said. The reasons are many, including: growing demand, combined with supply chain disruptions, currency devaluations, climate change impacts, and a rise in fragility and conflict.

"The deepening of the crisis in the last two months is directly linked to the terrible war being waged by Russia on Ukraine, and the costly financial, shipping, and logistical hurdles now faced by agribusinesses and importers," Malpass said.

He said that the World Bank sees a deepening of the crisis in the following numbers: The World Bank food price index reached an all-time high, rising 11.5% in March, a year-on-year increase of 37%. Fertilizer prices also surged in March, up nearly 20% since January. The cost of urea has tripled since January 2021. We also see a shift in relative prices, with food prices going up more than CPI. Projections show this trend continuing.

According to Malpass, to be successful, both advanced and developing countries will need to increase market access by reducing export and import restrictions and relieving price controls. Central elements of the WBG response include: encouraging food producers, enabling market access and private sector investment, and protecting the most vulnerable population through well-targeted and cost-effective cash transfers.

"The tragedy unfolding in Ukraine must not be compounded with another tragedy - a global food crisis. To prevent it requires speed, supply enhancement, market access, and close coordination," the WBG president said.