Families will skip meals amid food inflation: UN special advocate
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The war between Russia and Ukraine — both major producers of food commodities and energy — has disrupted global production, trade and supply in these areas, leading to a surge in prices.
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CNBC has been informed by Queen Maxima, the Netherlands’ queen. She expressed concern about the effect of rising food and energy costs on families.
The war between Russia and Ukraine — both major producers of food commodities and energy — has disrupted global production, trade and supply in these areas, leading to a surge in prices.
According to the World Bank’s latest Commodity Markets Outlook reportEnergy prices are forecasted to increase by 50% by 2022, and wheat prices will soar by 40% by 2030.
An increase in food prices like the one we are seeing will lead to a shift from having three to two meals per day to just one. In turn this will cause more instability in the other areas. Maxima spoke exclusively to CNBC at last week’s World Economic Forum in Davos.
CNBC’s Maxima was the U.N. secretarygeneral’s special advocate on inclusive finance and development. She said the pandemic had pushed more people into extreme poverty, and the increased price of fertilizers may have long-term and short-term effects. Maxima is a trained economist and previously worked in emerging markets and international finance.
We’ll be seeing more inflation now, but also the next year. Without fertilizers you can’t increase your yield. Therefore, there will be less Africa produce. This is a good thing because it feeds everyone. She stated that you will have less food and the price of food is likely to rise even more.
Finance access
Maxima, when asked by CNBC if she is concerned about Europe’s conflict, stated that “sadly, not only is the conflict in itself but also my role in financial integration for development which is to reduce poverty. I want girls to be able to go to school and I want people to have better prospects.”
According to her, while many have been negatively affected by the Covid-19 epidemic, there has been some progress toward financial inclusion.
Many governments have realized how important it is to use tools like mobile phones in reaching people who need financial assistance, as they made the shift to digitalization during lockdowns.
Unidentified Ukrainian soldier inspects the grain warehouse that Russian forces shelled on May 6, 2022 near front-lines in Novovorontsovka. Russia is accused of destroying Ukraine’s wheat production and targeting food storage areas in the front-line area.
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“A lot of governments when the pandemic and the lockdown started, thought … this is the way for us to send money to the poorest and the most vulnerable people, that had to stay locked down, they couldn’t go to the markets and sell their produce, and this was a very important issue,” she said.
“So many, so many countries have increased these, I would suggest, government-to people payments in the past two years and they’ve discovered financial inclusion to be a great tool to accomplish a lot of other goals they want to achieve.”
Maxima stated at the World Economic Forum that “1.2 billion people have had access to financial services over the past decade.” but she told CNBC there are probably 1.5 billion more to go. Expected this summer are the most recent data from Global Findex of the World Bank. This measure measures how adults in 148 nations save, borrow, pay and manage their risk.
Maxima stated that technology was crucial for connecting people.
“Without technology, we would not have been able to reach the billions of people we’re being able to reach now … so fintech therefore, can actually play a very good role. Why? “They think differently. They can listen to the people they serve and create products that are truly tailored to their needs,” she stated.
According to her, women, smallholder farmers in rural areas, micro-enterprises, and those most vulnerable to poverty and hunger are the ones who need digital solutions for better access to finance.
“Sadly after this pandemic have we seen even more women with less internet access. Because between having a smartphone and being able to cook, they choose to eat.” she stated.
“There is a strong connection between accessibility and affordability of digital solutions in order for people to become financially integrated.”
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