THERE has been a series of crises due to the Russia-Ukraine conflict that has had a negative impact on many countries other than the two at war. The countries having large reserves and being self-sufficient in producing food for their people may endure these crises, at least for the time being. However, a country like Pakistan which has already been struggling hard to stabilise its fragile economy and which imports food despite being an agricultural country, will suffer because of this conflict.
The first crisis that cropped up owing to the conflict is mass migration of the people from Ukraine to neighbouring countries into Europe’s easternmost states, which may outnumber the 1.3 million asylum seekers — mostly from the Middle East and Africa — who entered Europe in 2015. At the time it was the continent’s biggest refugee crisis since World War II. That exodus sparked a wave of anti-immigration sentiment that drove up the support for populist and far-right parties.
Besides, the global economy is still recovering from the shocks inflicted upon it by the Covid pandemic. Now the conflict between Russia and Ukraine and sanctions on Russia by the Western countries can make things worse. Retrospectively, oil and gas were central features in creating inflation in the West in the 1970s when the Organisation of the Petroleum Exporting Countries (OPEC) member countries cut off their supply to the West.
Even though the United States is not as much dependent on oil from the Middle East as it was in the 1970s, the price of oil has increased to $100 a barrel, and, according to some estimates, it can mount to almost $110 if the conflict continues. This will slow down the US economy and cause a rise in the inflation rate to almost 10 per cent in the country, which may lead to a severe economic meltdown like that of 2008.
Moreover, Russia supplies about 40pc of gas to Europe. A pipeline also runs through Ukraine where the Russian forces are wreaking havoc. Russia’s energy sector fetches a huge amount of money for its exchequer and contributes to more than a third of Russia’s budget. The economic sanctions on Russia by the West are not limited to cutting off Russian banks from the SWIFT network and freezing its central bank’s assets, but are too wide in scale and have been expanded to cover the exit of Shell and British Petroleum (BP) that were working with Russian Gazprom and Rosneft on a joint venture.
Such developments have already lowered the capacity of gas from Russia to Europe up to 50pc, which will endanger not only the West and beyond but also Russia itself, where a paucity of money in cash and energy production can be seen at the moment.
A bigger crisis which has already hit some countries is food security, which is essential for any country, particularly one which does not produce enough food for its people. Both Russia and Ukraine account for almost 29pc of the world’s wheat export. The war-torn region, the Middle East, is increasingly dependent upon the food grains imported from both these countries.
Pakistan, Turkey, Bangladesh and Sudan have also imported wheat from Russia or Ukraine in 2020. Pakistan was yet again planning to import almost two million tonnes of wheat from Russia, as the ousted prime minister had said in a speech to the public.
If the Russia-Ukraine clash does not stop, more people can die not because of war, but of food shortage or malnourishment, especially in the said regions. The international community must take steps immediately and stop the conflict. Mere imposing sanctions, as the West has done, will not end in a peaceful result.
Sanctions will only flame the price hike in energy and grain markets. It will not make these things available to the countries that are dependent on the countries involved in the bloody conflict. The West should also make sure smooth supplies of oil, gas and food items so that a scarcity of these things could be avoided.
Published in Dawn, May 7th, 2022