1 year on – the global impact of the war in Ukraine

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Simon Torkington, Senior Writer, Formative Content

• Russia’s invasion of Ukraine a year ago contributed to a global polycrisis.
• More than 8 million Ukrainian refugees have left their homes seeking safety.
• Global energy prices have surged as international sanctions on Russia continue.
• Food prices have also soared adding to a global cost-of-living crisis.

In the year since Russian President Vladimir Putin ordered his armed forces across the border into Ukraine, the impact of war in Europe has rippled out around the world.

Most of us are touched by the impact of the conflict in some way – at the checkout in the supermarket, as the domestic energy bills arrive, or as the businesses we work for tighten their belts, putting jobs and careers at risk.

A continuing humanitarian crisis

But foremost in our minds on this grim anniversary must be those who suddenly found themselves in the line of fire. Millions of people, mainly women and children, were forced to flee Ukraine, seeking safety outside the war zone.

A year on, the United Nations refugee agency, UNHCR, says there are more than 8 million Ukrainian refugees reported as living across Europe. Of those, 4.8 million are refugees who have registered under temporary national protection schemes. Most of these refugees are hoping an end to hostilities will allow them to return home and rebuild their lives. A UNHCR survey shows 12% are planning to go back in the next three months, but 65% of those wanting to return have no specific timeframe.

Rising energy costs threaten extreme poverty for millions of people

The outbreak of war in Ukraine plunged large parts of the world into an energy crisis.

A new survey, published in the Nature Energy journal, suggests the rise in fuel prices has almost doubled household energy costs worldwide. In more peaceful times, Russia was a major exporter of natural gas to Europe but international sanctions targeting the Russian energy sector have limited supplies and pushed up prices.

The chart above shows how the price of fossil fuels spiked after Russia’s invasion of Ukraine, compared to the average price in 2021. Between 24 February and 13 September 2022, the cost of coal shot up by 176%. Crude oil and petroleum product prices soared by 51% and the cost of natural gas rose by 94%.

As a result of these price rises on the energy markets, the study shows that global household energy costs will rise between 62.6% and 112.9%. Those hit hardest will be households in sub-Saharan African countries.

Food supplies under pressure

The impact of the war in Ukraine on the price and availability of food is felt very differently in countries around the world.

If you live in a wealthy nation, the prices might make you gasp. Few will have failed to notice how steeply the cost of a typical basket of goods has risen in the past year. The Guardian newspaper reports that UK grocery price inflation hit a record high of 16.7% in January 2023.

At the other end of the global wealth spectrum, rising food prices or disrupted supplies can be life-threatening. Both Russia and Ukraine are major exporters of wheat and the war poses a serious threat to nations that rely on grain from the region for much of their staple foods.

A 2022 report on global food security from the UN Food and Agriculture Organization finds that “the war in Ukraine will have multiple implications for global agricultural markets through the channels of trade, production and prices, casting a shadow over the state of food security and nutrition for many countries in the near future”.

Discover

What is the World Economic Forum doing to help ensure global food security?

Two billion people in the world currently suffer from malnutrition and according to some estimates, we need 60% more food to feed the global population by 2050. Yet the agricultural sector is ill-equipped to meet this demand: 700 million of its workers currently live in poverty, and it is already responsible for 70% of the world’s water consumption and 30% of global greenhouse gas emissions.

New technologies could help our food systems become more sustainable and efficient, but unfortunately the agricultural sector has fallen behind other sectors in terms of technology adoption.

Launched in 2018, the Forum’s Innovation with a Purpose Platform is a large-scale partnership that facilitates the adoption of new technologies and other innovations to transform the way we produce, distribute and consume our food.

With research, increasing investments in new agriculture technologies and the integration of local and regional initiatives aimed at enhancing food security, the platform is working with over 50 partner institutions and 1,000 leaders around the world to leverage emerging technologies to make our food systems more sustainable, inclusive and efficient.

Learn more about Innovation with a Purpose’s impact and contact us to see how you can get involved.

A major risk to global stability

These combined economic pressures add up to a worldwide cost-of-living crisis, identified as the greatest short-term risk to global stability in the World Economic Forum’s annual Global Risks Report 2023.

A series of charts show the impact of the global cost of living crisis by income group. Image: WEF Global Risks Report, 2023.

Data from the Global Risks Report, illustrated above, shows that low-income households are bearing a disproportionate burden from rising prices.

With much of the crisis driven by the war in Ukraine, the longer the fighting continues, the greater that burden may become, as the report highlights.

“The persistence of a global cost-of-living crisis could result in a growing proportion of the most vulnerable parts of society being priced out of access to basic needs, fuelling unrest and political instability. Continued supply-chain disruptions could lead to sticky core inflation, particularly in food and energy.”