The participants of the "Valdai" discussion club had a conversation on the global food crisis, its causes, consequences and prospects for overcoming it. In his opening speech, Andrey Bystritsky, Chairman of the Board of the Foundation of the Valdai Club, said that the crisis into which the world is plunging began long before February 2022.
The world finds itself in a paradoxical situation where the interdependence between States continues to grow, but it becomes extremely difficult to control the process. According to Bystritsky, the world is in a state of "sluggish world civil war", in which neutrality proved impossible
Oleg Kobyakov, Director of the Food and Agriculture Organization of the United Nations (FAO) Office for Communication with the Russian Federation, said that the food crisis, which has recently been on the information agenda, has been going on for years.
"The food crisis is obvious, it did not start yesterday. Every 12th person in the world, mainly in developing countries, is constantly experiencing hunger, which affects his health, opportunities to get an education and a job. Over the period from 2015 to 2020, the number of people, suffering from hunger, increased by about 60 million people. In the first covid year, the total number amounted to about 820 million people," the expert said.
Kobyakov called armed conflicts, natural disasters and economic shocks the main causes of the food security crisis. According to the expert, the crisis is a permanent state, only a set of variables changes.
FAO warned that the armed conflict between Russia and Ukraine was fraught with a global food crisis, since about 50 countries are directly dependent on their grain, in some of these countries import rates reach 90-100%. Thus, the small part of the world's grain exports that is stuck in the Black Sea ports is of great importance, since its non-receipt in places of consumption causes price increases, uncertainty about future supplies and increases tensions in importing countries.
The solution to this situation can be efforts aimed at transforming world trade in order to increase its accessibility, transparency and predictability.
Ambassador Extraordinary and Plenipotentiary of the Republic of Sierra Leone to the Russian Federation Mohamed Yongavo took part in the discussion. The Ambassador criticized the eurocentricity of world politics and complained about the lack of attention to the problems of Africa, which could lead to global challenges in the future. Among such problems are the expansion of the Sahara, the rapid growth of the continent's population and the fragility of the continent's food security. The Ambassador stressed that now the food crisis is not only a problem of the global south, but also of the north.
Among the reasons that led the region to the crisis, Yongavo identified uncontrolled urbanization, an unbalanced distribution of labor, infrastructure problems, a pandemic, as well as a debt crisis. All these factors have led to the fact that African countries are not one step closer to creating a free trade zone on the continent and solving problems with debts and food. Most of the problems mentioned by the Ambassador exist not only in Africa, are relevant for other countries and, according to him, like a domino effect, will affect everyone.
Nourhan El-Sheikh, Professor of Political Science at Cairo University, also spoke about the global nature of the problem. She is sure that the current crisis is not only a threat of hunger and a serious challenge to the food security of developing countries in Asia and Africa, but above all a political crisis. According to the expert, the US and EU countries make decisions based on political motives, which is not always pragmatic and damages the global economy. In her opinion, international institutions should deal with the solution of the existing complex of problems.
Ivan Timofeev, Program Director of the Valdai International Discussion Club, stressed that modern politics departs from the traditional understanding of basic principles and concepts.
"From the point of view of the UN, only those restrictions that are approved by the UN Security Council are sanctions. The rest is unilateral restrictive measures," the expert recalls.
The new economic reality creates interesting precedents, which include the situation around Russian fertilizers and grain. At first glance, the sanctions and restrictive measures did not directly affect them – there is no direct ban on the import of Russian grain, there are exceptions of the EU and the US on transactions for the purchase of grain and fertilizers from Russia.
However, despite the absence of direct prohibitions, today one of the main problems is overcompliance – excessive diligence in the execution of the sanctions policy. Timofeev explains this by the fact that US regulators have introduced a strict practice of punishments for violating sanctions regimes – more than 250 companies have already been fined $ 5.5 billion. Such measures cause logical concerns among business representatives and lead to excessive caution, which prevents doing business with Russia. Informal boycotts also hinder trade, when, for example, British insurers refuse to insure Russian cargo even without a formal order.
In the field of security, the world has become multipolar, but in the world of finance it remains largely unipolar. The way out of this is to go towards reforming the global financial system. It will be a difficult and painful process.
There is a solution that lies on the surface – a signal is needed from the US and EU authorities that their excpetions are serious, that business will not suffer. There is information that such signals can be received. This will help to stop overcompliacne, and will make it clear where restrictions should be fulfilled and where they should not be," Timofeev believes.
Eduard Zernin, Chairman of the Board of the Union of Grain Exporters, spoke about undeclared obstacles to trade with Russia. In his opinion, the main problem for the export of Russian grain to the world market is hidden sanctions by shipping companies that refuse to transport Russian grain without explanation. For example, in the last GASC tender, Egypt could not provide freight for Russian grain, and the Russian side had to solve the problem of finding ships on its own. According to the expert, Russia is now in the process of finding solutions to logistical problems to resume trade with partners.
Another problem lies in the plane of servicing transactions on Russian grain. There are also no formal prohibitions in this area. Moreover, the US Office of Foreign Assets Control has issued a general license authorizing food transactions from Russia, however, there is no progress. From here, according to Zernin, there are two ways out for Russia:
- Expansion of own merchant fleet for grain transportation;
- Development of alternative payment mechanisms.
Source: Valdai discussion club