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The war in Ukraine has an economic domino effect fuelling global social unrest

April 14, 2022 at 2:45 pm

Ukrainians, living in Istanbul, gather to protest Russia’s attacks on Ukraine in front of Odakule, Beyoglu district of Istanbul, Turkiye on 4 March 2022. [Mehmet Eser – Anadolu Agency]

The war between Russia and Ukraine since 24 February has already had a global impact. Energy prices have spiked, triggering a sharp increase in the cost of food. The UN’s Food and Agriculture Organisation’s food price index that measures the monthly global price change in food commodities reached an all-time high last month.

The war has had an economic domino effect. Both Russia and Ukraine are seen as a world food basket. However, Ukraine’s food production process has been halted, with its crops destroyed and ports blockaded. This has increased the cost of commodities such as wheat and sunflower oil. The war has also triggered a spike in energy prices and the cost of fertilisers, increasing food prices through higher transportation costs.

High food prices are already unbearable for many. For example, in Somalia, prices have increased by around 30 per cent since the war began. Annual food price inflation for India’s rural areas has doubled. Inevitably, this has created and continues to create global discontent. People in Spain and Iraq, for example, have held demonstrations about rising food prices; Albanians, too, have taken to the streets to express their anger.

The intensity of unrest will differ in each country. The main variable is whether government policies are effective or not. Countries which are stable politically and economically and have effective government policies will experience low-intensity protests. For example, most EU member states that already enjoy the bloc’s monetary support regarding high food prices will experience low-intensity protests. At the other end of the spectrum, politically and economically unstable countries with ineffective government policies will experience high-intensity protests and uprisings.

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Egypt, for example, has a history of food-related uprisings. There were bread riots in 1977, and the Arab Spring protests were partly triggered in 2011 by the slashing of bread subsidies and a rise in food prices. The Egyptian authorities remember this and have taken several measures against rising prices, including diversifying its wheat imports and imposing a price cap on non-subsidised bread prices. However, the jury is still out on whether these measures will be effective and prevent another spate of protests.

Tensions between Russia and Ukraine rise on the shared border - Cartoon [Sabaaneh/Middle East Monitor]

Tensions between Russia and Ukraine rise on the shared border – Cartoon [Sabaaneh/Middle East Monitor]

Lebanon and Tunisia are among the countries likely to experience high-intensity protests. Lebanon was already gripped by a severe economic crisis when Russia invaded Ukraine, and political instability is rife. The economy has collapsed and inflation has reached its highest ever level. Tunisia is also going through a political crisis, with the president dissolving parliament and demonstrators taking to the streets in protest at his move and political and economic instability in general. Under such circumstances, both countries need effective government policies. The Lebanese government is already tendering for wheat from India, while Tunisia is trying to secure a loan from the International Monetary Fund (IMF). However, considering the level of economic and political instability in both countries, the effectiveness of such measures is doubtful. They can probably expect high-intensity protests.

Sri Lanka is already experiencing mass protests about the economic crisis and its repercussions, such as blackouts and shortages of medicine and food. While the problems did not begin with the Russia-Ukraine war, it has exacerbated them and depleted Colombo’s already low foreign exchange reserves, widening the massive budget deficit and causing the free fall of the Sri Lankan rupee. Protests are expected to intensify.

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The situation is dire for countries just emerging from humanitarian catastrophes. In Somalia, where civil war continues, severe drought has pushed thousands into famine. In Yemen, where a vicious war is ongoing, tens of thousands of people live under famine-like conditions, and 14.4 million are food insecure. The Russian invasion’s economic domino effect has made matters worse. Due to high food prices, even humanitarian aid organisations are struggling to provide essential aid to the Somalis and Yemenis. Human suffering is growing, and the death toll is mounting. Moreover, given the ongoing conflicts, the unstable governments are unable to implement effective measures. As usual, the most vulnerable in society face the greatest risk.

The war in Ukraine has exposed how much our world is interconnected. Hostilities in one country are not confined within its borders; they have a global effect, with resultant social unrest and instability. This is unlikely to end overnight if hostilities cease. As such, it is time for the major international organisations and economic blocs to take this problem seriously. If the pandemic has taught us anything at all, it is that in our interdependent world, no one is safe until everyone is safe.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.