Originally published on UNDP Global website on 21 March 2022
We are learning every day how quickly our world can change. New challenges are coming faster and with more severity, but each underscores the same reality: that we are all connected.
The world was clinging to a little hope at the beginning of 2022, taking tentative steps out of the COVID-19 pandemic and towards economic recovery, when the war in Ukraine shook the world. Four weeks into the conflict, the human suffering has been catastrophic.
Early data estimates by the United Nations Development Programme (UNDP) suggest that nine out of 10 Ukrainians could be pushed into poverty and extreme economic vulnerability should the war deepen. This would set the country – and the region – back decades and leave deep social and economic scars for generations to come. We’ve had another hard lesson in what we already know: in times of emergency, it is always the vulnerable who bear the brunt.
The broader geopolitical and economic fallout poses serious risk not only to Ukraine but also to global peace and development. Effective answers to these challenges cannot be achieved by States alone. The complexity of the path ahead makes it more important now than ever to act together, in partnership. Against the backdrop of the war in Ukraine, multilateralism and development cooperation has never been more important. Our way forward must be built on shared goals and a common vision for our people and our planet.
Designing an effective response to cope with fallout of the conflict for the most vulnerable – along with global health pandemics and the current climate emergency – demands strong and stable international cooperation. Yet international development assistance is perilously at risk. There are at least four main ways in which the crisis in Ukraine could become a crisis for multilateralism and international development cooperation.
First, the war in Ukraine could contract global economic output which could in turn reduce the availability of financing for development, from public and private sources. A prolonged conflict and retaliatory economic sanctions would disrupt global trade and economic growth, constraining government budgets to support development priorities domestically and internationally. By the same token, private capital flows – already under stress due to COVID-19 induced disruptions – could take a further beating as a result of dampened investor confidence. This could have cascading effects on the abilities of countries, particularly those in vulnerable and fragile situations, to mobilize adequate development finance.
Second, as most top donor countries grapple with the Ukraine crisis, major policy shifts are being made with potentially significant implications for international aid. Already, recent defence budget increases in Europe as a response to heightened security risks could impact international aid and other budget lines. Germany, Sweden, Denmark, and Poland have announced a raise in defence spending to or above 2 percent of GDP; and Denmark has announced the intention to reduce the current 2022 Official Development Assistance (ODA) budget by US$300 million to cover the costs of receiving Ukrainian refugees. With the number of Ukrainian refugees now over 6.5 million and counting, the impending refugee crisis is likely to divert a substantial amount of ODA to cover for hosting the refugees and related humanitarian needs.
Third, the ripple effects from the Ukraine crisis on commodity and energy prices is spreading far beyond the conflict zone. Rising prices coupled with the mounting inflationary and debt pressures are likely to fuel instability and unrest. Russia and Ukraine account for 30 percent of global wheat exports; the conflict in Ukraine now threatens to cause a global food crisis. Rising gas prices will also put oil importing developing countries at risk of economic hardship and recession; in turn peace and stability are at stake.
Fourth, the direct and indirect consequences of the war in Ukraine adds to the already stressed multilateral development system. In December 2021, the United Nations Office for the Coordination of Humanitarian Affairs (UN OCHA) appealed for a record $41 billion to help 183 million of the world’s most vulnerable people suffering from multiple crises, including poverty, hunger, conflict, and the impact of COVID-19. The UN estimates an additional $2.6 billion will be needed for the Ukraine crisis. With mounting humanitarian needs in new and ongoing crises situations – not least Yemen, Afghanistan, Somalia, South Sudan and Myanmar – funding for immediate humanitarian needs is overtaking investment in long term development. Any further cuts to multilateral development budgets will undermine the development system’s ability to respond to development needs.
Given the far-reaching impact of the Ukraine crisis on international development in the long term, it is critical for the international community to embed integrated development solutions at the centre of, and not as a postscript to, the global response to the crisis in Ukraine.
In the meantime, it is also important that the international community work with civil society and other partners to ensure that budget increases in response to the conflict, including on military spending, do not come at the expense of funding for global development and humanitarian assistance for other regions and issues.
This is the time for the international community to reaffirm commitments to global peace and development. Underpinning these commitments must be a strong and effective multilateral system that can uphold universal values and promote global recovery and a sustainable future. It is critical that the UN development system maintains its universal mandate and presence and keep its commitment to stay and deliver even in difficult and protracted crisis situations. But this cannot be taken for granted. It requires active and dedicated support and investment from Member States and other partners.
Where life becomes more complex and dangerous for the hundreds of millions of people who can’t be assured of their safety, or even where their next meal is coming from, development cooperation is needed. Adequate, flexible, and predictable funding is the ‘first responder’ that enables the multilateral development system to ensure that the most vulnerable are not left behind.