Fri. Jul 1st, 2022
REMARKS BY THE SECRETARY-GENERAL OF THE UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT
MS. REBECA GRYNSPAN

FOR THE LAUNCH OF THE SECOND REPORT BY THE GLOBAL CRISIS RESPONSE GROUP ON FOOD, ENERGY AND FINANCE

EMBARGO, 12.15 New York – 8th June 2022

Check against deliveryGood morning
 
Thank you very much for joining us for the launch of the second brief of the Global Crisis Response Group.
 
The Secretary-General has pointed to the main messages of the report and highlighted the suffering and destruction the war in Ukraine is causing which now extends far beyond its borders.
 
Our main message in this second brief is this:
 
We are on the brink of the most severe global cost-of-living crisis in a generation.
 
The report also demonstrates the interconnected nature of the 3 dimensions of the crisis: food, energy, and finance. And that tackling just one aspect, will not solve the global crisis we are in. This is creating a cost-of-living vicious cycles increasing the impact on families and countries. Incomes are being squeezed, and families are forced to decide how to allocate shrinking household finances.
 
Perhaps choosing whether to skip a meal, keep children in school, buy less nutritious food, keep a family business open or pay medical bills. And so another vicious cycle starts; the cycle of social unrest leading to political instability as a result of the weakened ability of countries and families to cope with yet another global crisis, on top of covid 19 pandemic and the climate crisis.
 
Our second message is this: the current food crisis may rapidly turn into a food catastrophe of global proportions in 2023
 
Higher energy costs and trade restrictions on the fertilizer supply from the Black Sea region have resulted in fertilizer prices rising even faster than food prices.
 
If the war continues and grain and fertilizers high prices persist into the next planting season, the present crisis could extend to other basic foods such as rice, affecting billions more people.
 
And finally let me underline that this is a global crisis which nobody can escape. But the vulnerable are already suffering the most.
 
For example, data in the report shows that a 10 per cent increase in food prices will represent a 5 per cent decrease in the real incomes of poorest families and 5 per cent of their income is what these families normally spend on health.
 
60 per cent of workers worldwide have lower real incomes than before the pandemic. A second part of the report analyzes the effects of the crises at the regional levels.
 
With the United Nations Regional Economic Commissions, we have assessed the capacity to cope of countries in Sub Saharan Africa, Middle East and North Africa, Easter Europe and Central Asia, South and East Asia and Latin American and the Caribbean.
 
We confirm a widespread picture of vulnerability in all regions.
 
Around 1.6 billion people severely exposed and unable to cope with the crisis. And 60 per cent of the poorest countries are in debt distress or at high risk of it. Let me now turn to the recommendations.

Firstly, on food.

We must stabilize global markets, reduce volatility, and tackle the uncertainty of commodity prices.  We remain convinced that there can be no effective solution to the global food crisis without reintegrating Ukraine’s food production, as well as the food and fertilizer produced by Russia into world markets – despite the war.

Restoring fertilizer availability, ensuring small farmer access, and monitoring supplies everywhere for the next 18 months will be critical.

It is important to support FAO’s proposal of a Food Import Financing Facility. While a humanitarian approach remains important, it is not enough.
 
We must not forget hundreds of millions of vulnerable people around the poverty line and wider groups crushed by the crisis: informal workers, women, small holder farmers, families on the poverty line.
 
Government must put in place social protection safety nets to offer targeted support to these groups and strengthen their ability to cope.

Secondly, on finance.

There is no solution to the cost-of-living crisis without a solution to the finance crisis. Developing countries urgently need financial support from international financial institutions so they can help their poor and vulnerable population through social protection and safety nets schemes.
 
Unless there is a strong effort from international financial institutions to increase countries financial resources, countries will continue to struggle to pay their food and energy import bills, service their debt and increase spending in social protection.
 
All at the same time. International financial institutions must reactivate all their rapid disbursement mechanisms. Multilateral development banks must be capitalized and apply more flexible lending ratios.
 
And we need a new emission of Special Drawing Rights from the International Monetary Fund, as well as more pledges to recycle them from countries with strong foreign reserve positions. The funds exist and they must be made available.
 
We must strengthen the global debt architecture.
 
The risk of a major debt crisis, with a possible domino effect is greater than during the COVID-19 pandemic.
 
The G20’s must reinstate the Debt Service Suspension Initiative and debt maturities should be pushed back by two to five years. The Common Framework for Debt Treatment created by the G20 must be radically improved to really deliver solutions for debt distressed countries. No country has been able to receive support so far all continue to have to service their debt with no relief in sight.

Thirdly, on energy.

The use of strategic stockpiles and additional reserves could help to ease the energy crisis in the short term. But we must continue to push for transformational change, accelerating the deployment of renewable energy.
 
Today, the world faces a crisis of access. There is enough of everything but at the wrong price, in the wrong place, and at the wrong time.
 
Tomorrow, the world may face a crisis of availability, where there may be not enough essential supplies, no matter where, when and at what price.
 
That is why we continue to insist that the problems of access, price and timing must be tackled at the same time
 
We are in a race against time. This is why we are calling for action, action, action.
 
Dealing with the consequences of inaction will be much more costly for all than acting now.
 
Thank you.