Four hundred million people globally rely on exports that come via Odesa in Ukraine – a port currently blocked by Russian forces. If it isn’t reopened within eight weeks, the effects will be felt globally
An old friend of mine says that one of my annoying habits is to say: “It’s worse than that.” He makes a point and then I say: “Yes but, of course, it’s worse than that.” It’s as if I’m co-opting his opinion; as if I’m saying I know what he knows, but somehow I know it more deeply. In the sport of argument, it’s goal-hanging.
Well, this week, I’m afraid, I want to say: “it’s worse than that”. I want to double down on an argument of my own. In December of last year, I said that inflation in 2022 will bring us challenges that we haven’t faced before, it’ll see us, among other things, criticising central banks for having done too little too late. Last week, the Economist‘s cover story was the Fed that failed. “The Fed,” it said, “had the tools to stop inflation and failed to use them in time.”
Well, rising prices, I think it’s worse than that. I’m James Harding and in this week’s Editor’s Voicemail, I want to talk about inflation, immigration – and the port of Odesa.
Next week, the Office for National Statistics in the UK will offer a new breakdown of the inflation numbers. They’re calculated to demonstrate how rising prices are experienced by households of different incomes: it’s going to show that the cost of living crisis is deeply unfair.
And it’s going to get worse. In the year to March, prices overall are up 7 per cent – the highest rate of inflation in the UK for 30 years. And they’re surely going to rise even further: because prices of goods out of the factory gate are up 12 per cent, input prices 18 per cent. With little prospect of the price of oil and gas falling, the prospect of the energy price cap rising again later this year means that the average household could see their bills having risen by nearly £700 in April and perhaps a further £600 in October.
It’s an inflation crisis in plain sight. But there’s one coming from over the horizon, too.
On Thursday, we held Tortoise’s first Responsible Food Forum. David Beasley, the Executive Director of the World Food Programme, joined us. And he started out by describing the picture of global hunger and rising food prices, even before the war in Ukraine.
When he took over the WFP in 2017, the number of people facing acute food insecurity – i.e. moving towards starvation – was 80 million. Just before Covid struck, the number had already risen to 135 million; people made hungry by man-made conflicts and climate shocks. And then came the pandemic. The number almost doubled to just over 275 million people.
Which takes us to today, to the war in Ukraine, to Odesa.
David Beasley had come to the Responsible Food Forum direct from Ukraine. At the start of the week, he’d been in Odesa on a bridge in the Black Sea port as the Russian missiles flew overhead. And he’d gone to the city, in his words, to “jump up and down”. He went to do an interview for CBS’ 60 Minutes – due to go out this Sunday – to warn of what happens if the port does not reopen. Because 400 million people around the world, not to mention the economy of Ukraine itself, depend upon the wheat, grains and agricultural produce that moves through that port. It’s currently blocked by Russian forces as well as sea mines and a couple of ships sunk strategically by the Ukrainians to protect the city from amphibious invasion. But the grain silos are already full; the Ukrainian farmers who planted just before the war began and are now set to harvest in July. And typically, 3,000 train cars of grain ship through port every day and there’s no way of moving that volume of food overland.
As David Beasley put it, the world has eight weeks – eight weeks to clear those seaways, reopen the ports and ship the grain to save Ukraine and prevent globally food shortages, surging food prices, food riots and famine. In other words, there’s an international humanitarian frontline to the war in Ukraine, and it’s the port of Odesa. The question now is whether or not the world will heed that call, or whether, like the call for air support in the opening weeks of the war or the call in the past month for offensive weaponry, whether the call to keep open the Black Sea port will go unheeded.
Because, as things stand, the World Food Programme is forecasting a surge in food prices in the autumn and then a food availability problem – a euphemism for famine – in the spring of next year. And with the prospect of both, David Beasley says, comes more destabilisation and migration.
The Arab Spring, of course, came on the back of surging of food prices. Two years ago, the WFP was warning of food insecurity spilling into national instability in the Sahel – and so it proved. It followed in Chad, in Burkina Faso and Mali.
David Beasley’s forecast now is that the whole stretch of the Sahel – home to hundreds of millions of people from the Atlantic to the Red Sea – is primed for more destabilisation and more migration. As he put it: “If you think you’ve got a problem from the East, it’s nothing like the problem coming to your door from the South.”
Not the starving, but the furious – people in east, west and northern Africa who used to be able to feed their families well enough, but cannot afford to any more. A cost of living crisis on the other side of the Mediterranean that looks set, in the form of boatloads of people, to collide with a cost-of-living crisis in Europe itself.
Inflation and immigration – a colossal challenge for policymakers, and a toxic temptation to politicians.
Along the way this week, I was told that, after 8,000 asylum seekers crossed the Channel in 2020, then 27,000 in 2021, the UK Home Office’s internal estimate for the number this year was 115,000. I haven’t been able to verify that number with the Home Office, but it certainly chimed with David Beasley. A fivefold increase. That’s the number forecast and feared by the UK. And a fivefold increase is what the WFP has seen in the number of people moving from Guatemala, for example, and seeking to get over the border into the US.
The UK government’s policy to ship individual male migrants to Rwanda is bound now to get tied up in the courts, even while, at the same time, the Church, many in the metropolitan media and the Labour opposition fume against it. Which is to say this: it’s a policy that doesn’t do much immediately, but certainly creates a political dividing line. Which is why you’ve begun to see Boris Johnson prizing it as evidence of his government’s efforts to tackle illegal immigration even before a single immigrant has left Britain’s shores. The policy does little but it talks tough; more performative politics for our difficult times.
In 2020, David Beasley picked up the Nobel Peace Prize on behalf of the WFP for the work it has done around the world. Covid, climate, conflict. To coin a phrase, whatever it faced in 2020, now it’s worse than that. The question for the world in the next eight weeks is whether it backs the WFP with more than just prizes, but with power. It’s the question being asked now by the port of Odesa.