International Monetary Fund, World Bank Group have expressed concern over the looming food crisis across the globe as a result of the war between Russia and Ukraine.
The two world financial institutions have therefore come together to working on arrangement to tackle the crisis.
In a statement, IMF Managing Director, Kristalina Georgieva, on the publication of the Joint International Financial Institution Plan to Address Food Insecurity said: “Russia’s invasion of Ukraine has created a crisis on top of a crisis around the globe with countries facing food shortages and sharply higher prices for food, energy and fertilisers.”
This is coming on the heels of a meeting of International Financial Institutions (IFIs) and global leaders convened by the US Treasury on April 19 “Tackling Food Insecurity: the challenges and call to action, “the International Monetary Fund (IMF), the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), the World Bank, and the International Fund for Agricultural Development (IFAD) have worked together to formulate a joint action plan to address food security. According to the plan, the IFIs will pursue actions to step up, surge, and scale their work across six priority goals: (i) support vulnerable people; (ii) promote open trade; (iii) mitigate fertiliser shortages; (iv) support food production now; (v) invest in climate-resilient agriculture for the future; and (vi) coordinate for maximum impact.
According to Georgieva, “these pressures occur at a time when countries’ public finances are already stretched from the pandemic and debt burdens are high. With inflation reaching the highest levels seen in decades, vulnerable households in low- and middle-income countries are most at risk of acute food insecurity. And history has shown that hunger often triggers social unrest and violence. If we have learned one lesson from the 2007-08 food crisis, it is that the international community needs to take fast and well-coordinated actions to tackle a food crisis by maintaining open trade, support vulnerable households, ensure sufficient agricultural supply, and address financing pressures. I am glad that the heads of the International Financial Institutions worked together to propose concrete actions ( add hyperlink to the action plan).
“Coordination between us will be critical for the plan to have maximum impact in quickly alleviating food insecurity, especially for the most vulnerable households in the most vulnerable countries. Working closely with the World Bank and other International Financial Institutions, the IMF will provide policy advice, capacity development assistance, and financial support to help further catalyze and complement financing from other institutions. The IMF is investing in its monitoring capacity to allow for timely identification of countries with the most pronounced financing pressures, especially fragile and conflict-affected states, which will particularly be affected by food insecurity.
“The IMF is working with country authorities on macroeconomic frameworks and policy priorities. A critical area of focus is to assist countries in their efforts to rapidly improve social safety nets to protect vulnerable households from the imminent threat of hunger. Helping members identify ways to safeguard food security without resorting to export restrictions has been another priority. These policy objectives are reflected in the IMF’s program engagement. IMF financing support for Moldova and Mozambique, for instance, includes a focus on strengthening social safety nets for vulnerable households. The IMF will also bring to bear its new Resilience and Sustainability Trust, which will provide affordable longer-term financing for countries facing structural challenges, and intensify efforts with the World Bank and others to support debt restructurings where needed.”
