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The Guardian - UK
The Guardian - UK
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Graeme Wearden in Davos

Davos day 3: WTO says food crisis could last two more years without Ukrainian safe corridors – as it happened

Davos George Soros GITA GOPINATH World Economic Forum Recession Dmytro Kuleba Ukraine Bill Gates Christine Lagarde Gina Raimondo
The logo of the World Economic Forum in Davos
The logo of the World Economic Forum in Davos Photograph: Laurent Gilliéron/AP

And with that, goodnight, GW

WTO: food crisis could last two more years without safe corridors

The world’s food crisis could last until 2024 unless safe corridors are created to move Ukrainian food stocks currently blockaded by Russia, the head of the WTO warns.

Ngozi Okonjo-Iweala told reporters in Davos tonight that:

The food crisis, if we don’t get these safe corridors out, is going to last another year or two, to be honest with you.

Okonjo-Iweala explans than the UN secretary-general is engaged with the issue.

He formed a crisis group composed of key UN agencies and related agencies. WTO is part of it, to look at the food, energy and finance aspects of the crisis.

One issue is the creation of safe corridors and looking at alternative means to evacuate Ukrainian grain.

Rail could take one or two million tonnes, but it’s very difficult so we really need the Black Sea.

I know that some work is going behind [the scenes] to see if we can get a solution. So the secretary general is involved.

Svein Tore Holsether, the CEO of fertiliser firm Yara, says there are practical measures that can be taken to help with the food crisis.

For example the World Food Programme is $10bn short of funding -- wealthy individuals, companies and governments could bridge that gap.

Also, there are grain inventories in some countries that could be released.

And farmers need help paying for inputs - he says Yara are working with farmers in countires such as Ghana.

And on the trapped wheat stocks, which has led to prices rising sharply, he says:

Here we can only plead to humanity, but we cannot put all our hopes on that happening.

Updated

Fertiliser boss: we're in a food crisis

Svein Tore Holsether, CEO of fertiliser group Yara International, says we are in a food crisis right now

276m people face acute and severe food insecurity -- twice as many as two years ago.

The war in Ukraine is accelerating this, but so is the climate crisis -- impacting weather patterns and making farming very difficult (such as heatwaves in India, Pakistan and the US).

80% of the world’s population rely on imports for food -- either food from the farm, or agricultural inputs.

The lessons from the past is that half of the food price hike in 07-08 was due to policy measures, with export bans amplifying the situation.

Looking at the numbers now, it’s worst than 2007-008 - and we know what happened then with social unrest and destabilisation, says Tore Holsether.

On the 25m tonnes of wheat trapped in Ukraine:

Food going to waste while people are dying from starvation is happening right now.

WTO director-general Ngozi Okonjo-Iweala says trade is part of the solution to the simultaneous crises gripping the world.

Speaking at a press conference on policy outlook for Trade and Food, Okonjo-Iweala says the world faces the security crisis, the pandemic, the climate crisis, food crisis, all at same time.

They have one thing in common -- one country can’t solve them, needs multinational approach.

Okonjo-Iweala explains the WTO recently revised down its projections for trade growth this year from 4.7% to 3%.

There is lots of uncertainties - many on the downside. There are lots of downside risks.

If you don’t have trade, you can’t move food to where it is neded, she points out.

Updated

Commission into economic of water launched

Water is a vital but under-valued resource. That’s the thinking behind a new two-year commission into the economics of water launched in Davos.

Taking its cue from the 2006 report by Nick Stern that acted as a catalyst for action on climate change, the report’s authors said there would be no solution to global heating or the current food crisis without action on water.

Tharman Shanmugaratnam, a senior minister in the Singapore government said:

“We have to spend $300m a year so that low and middle income countries can get access to clean water and sanitation.”

Tharman said all countries would benefit.

“This is a way of investing in the global commons. It is about equity. If we don’t solve the equity problem we are all going to be affected.”

Updated

Ukrainian climate scientist: Reconstruction should be climate-resilient

A leading Ukrainian climate scientist is calling for the cities attacked in the Russian war to be rebuilt in a climate-neutral way.

Dr Svitlana Krakovska, head of the Ukrainian delegation to the Intergovernmental Panel on Climate Change (IPCC), says the reconstruction of cities bombed in the invasion can be an example to the rest of Europe.

Speaking at a panel session here in Davos organised by the Arctic Basecamp group of climate scientists, Dr Krakovska says:

We have a big disaster in our country, we have so many people killed, our cities destroyed.

But these destroyed cities are our opportunity, to rebuild them in a climate-resilient way.

To do this we will need the support of all the international community, financial support and technology support as well.

So we are looking forward to having Ukraine as a role-model for Europe.

Dr Krakovska received a medal from president Zelenskiy last year for her work on rising global temperatures, including visiting the Antarctic to see the impact of climate change there. She says Zelenskiy supported the work her team were doing -- which has been disrupted by the war.

Earlier this week, Zelenskiy called for leaders at Davos to help fund the reconstruction of Ukraine, which could cost more than $500bn.

Citing cities such as Bucha and Mariopol which have suffered heavy damage, Dr Krakovska says:

We dream about rebuilding them in this way, and be a model for climate neutrality. I’m pretty sure it will be supported.

Dr Krakovska tells me that before the war, Ukraine had energy cooperatives, which used solar panels to diversify from other sources.

We started to diversify our sources of energy once we started being blackmailed by Russia.

One notable example is Slavutych, the city created for people evacuated after the Chernobyl nuclear disaster, where solar panals were deployed on administrative buildings to reduce their dependence on other sources of energy.

Krakovska also points out that cutting energy use is also a crucial contribution to hitting climate goals.

Updated

WTO's Okonjo-Iweala: Ukraine's harvest will be 'very, very difficult'

Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO).
Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO). Photograph: Gian Ehrenzeller/AP

Ngozi Okonjo-Iweala, the director general of the World Trade Organisation says the food crisis prompted by the war in Ukraine is a “real worry” which could persist into next year and perhaps longer.

“If countries can’t get fertiliser (of which Ukraine is a big supplier) then yields will be low”.

With Ukraine’s economy affected by the war she says next month’s harvest will be “very, very difficult.”

Okonjo-Iweala says countries should not make a bad situation worse by imposing export bans and put their surpluses on the international market. African countries should be supported to increase their own food production, she said.

One of the countries that has imposed an export ban is India, but its trade minister Piyush Goyal defended the decision.

In the past two years India had exported its wheat surplus, but it had been hit by a hugely damaging drought this year that had cut production. Without the ban India’s own food security would have been put at risk, Goyal explained.

Updated

An important line from this morning:

Ukraine’s foreign minister, Dymtro Kuleba has told Davos that making concessions to Russia didn’t work since 2014, and won’t work now:

Ngozi Okonjo-Iweala, director general of the WTO, has been holding meetings on the deepening food crisis, as leaders try to break the blockage on Ukraine’s wheat supplies:

European Commission president Ursula von der Leyen insists that Europe’s ‘economic fundamentals are strong’.

Following a meeting with ECB president Christine Lagarde, von der Leyen says Europe will keep growing despite the shock from the Ukraine war:

There’s a definite feeling here, though, that Europe could be going into recession -- especially if Russian gas supplies were further disrupted.

Sir Lawrence Freedman: Russia may become 'diminished power'

The Ukraine war may result in Russia becoming a ‘diminished power’, says Sir Lawrence Freedman, Emeritus Professor of War Studies King’s College London.

Speaking on a panel at Davos, Freedman explains that Russia has lost its aura since the invasion began. That has implications for those who rely on its power or are afraid of its power.

“Russia is already diminished,” Freedman says, pointing out it has used up a lot of its power, such as three years of tank production, in the three months since the invasion.

Putin has blown it...it’s clearly a blunder.

So, the ‘Big Three’ powers of the US, China and Russia could be more like a two and a half.

Freedman agrees that the Ukraine war is a ‘turning point in history’ (WEF’s theme this year) --the problem is we don’t know how it’s going to turn out.

It’s a classic crisis, as things can get an awful lot worse, or an awful lot better, he explains.

One possibility is that Russia is a diminished power as a result of this, Freedman says.

Freedman also cautions against setting terms for the conclusion of the war (such as Ukraine losing some territory to Russia, as has been suggested).

“This is not our war”, he says. The West has war aims, but it is Ukraine’s war.

And it is dangerous to set terms for the conclusion of this war which Ukraine might find difficult to meet, or don’t want to meet at all.

If there is a recession, then unemployment shouldn’t rise as much as in a typical downturn, according to Infosys president Ravi Kumar.

Kumar tell us that “all the economic indicators say that there is probably a slowdown in the economy”, and a potential global recession on the cards.

But it is a very different sort of slowdown, because labour markets are very tight.

He points out that the number of jobs available is significantly higher than the number of people available in some countries (such as the US, where vacancies hit a record 11.5m in March, and the UK).

So there could be some ‘softening’, but hopefully not a surge in joblessness.

Normally in recessions, employment goes down. This is a recession where the labour markets will remain on a high.

Kumar says it is also a golden era for technology - with strong demand for tech professionals in all industries.

But, that means there is a disconnect between the people available, and the skills needed for the jobs available.

People have skills of the past, jobs need skills of the future.

But if you can bridge that gap, it will start to ease inflation because a lot of inflation today is linked to labour markets -- with firms offering higher wages and bonuses to attract staff, he says, adding:

Tech can be a deflationary force in an inflationary economy.

Updated

Full story: Pfizer to offer low-cost medicines to 45 lower-income countries

Pfizer has announced it is to supply all its current and future patent-protected medicines and vaccines on a not-for-profit basis to 45 lower-income countries and is talking to other big drugmakers about similar steps.

Announcing the “accord for a healthier world” at the World Economic Forum (WEF) annual meeting in Davos, the New York-based pharma firm pledged to provide all its products that are available in the US and Europe on a cost basis to 1.2 billion people in all 27 low-income countries such as Afghanistan and Ethiopia, plus 18 lower-middle-income countries including Ghana.

Pfizer has previously been accused of “pandemic profiteering” over the huge profits it has generated from coronavirus-related medicines over the past two years.

It made almost $15bn in sales in only three months from the Covid-19 vaccine it developed with Germany’s BioNTech and its new Covid pill for people who are at high risk of severe disease.

Albert Bourla, Pfizer’s chief executive, said.

“We are living in a time where science is increasingly demonstrating the ability to take on the world’s most devastating diseases,”

“Unfortunately, there exists a tremendous health equity gap in our world that determines which of us can use these innovations and which of us cannot.”

More here:

Updated

The CEO of Ukraine’s largest private energy company is urging the European Union to make up for its “dramatic mistake” of growing dependent on Russian oil and natural gas by buying energy from Ukraine.

Maxim Timchenko of DTEK Group told The Associated Press here in Davos that consumption of its services in Ukraine has dropped 35% since Russia invaded on Feb. 24. He says some of that excess electricity could be shipped to Europe.

“Ukraine needs this revenue to support financial stability of our energy system.”

A frontline nurse from Liberia has launched a ‘round of applause’ for the pharmaceutical executives at the World Economic Forum who are refusing to waive patents on Covid-19 vaccines and supplies.

George Poe Williams travelled to Davos to highlight the urgent need for Governments to back a patent waiver on vaccines and supplies, the international union Public Services International reports:

Williams said:

“If I wanted to earn what Pfizer CEO Albert Bourla made last year, I would have to work every single day until 6100 AD.

But what makes me really furious is that Bourla and many of his billionaire buddies here at WEF are doing all they can to block our demands for a patent waiver – just so they can make even more money.”

Pfizer made nearly $37bn (£27bn) in sales from its Covid-19 vaccine in 2021, and is also benefitting from its Covid-19 pill Paxlovid this year.

Pfizer (which announced it would offer products at non-for-profit prices in 45 poorest countries) has argued a patent waver would disentivise people taking risks in the future.

India and South Africa proposed a patent waiver on Covid-10 vaccines in 2020, but it has not won enough support from other countries.

Williams said

“These blocking governments are putting the interests of pharma corporations ahead of the lives of billions across the global south. Vaccine production continues to be restricted by patents. In Liberia, only a third of us are vaccinated. If they don’t act now, they will have blood on their hands.”

The geopolitical upheaval caused by Russia’s invasion of Ukraine means energy security is now the priority, says the group CEO of Malaysian oil and gas giant Petronas.

That could be a blow to efforts to hit emission goals.

Petronas’ Tengku Muhammad Taufik told CNBC:

“With so much gas being removed from the system, not being available to Europe, so [many] barrels now making its way through different routes — the challenge of ensuring energy security has now taken its position again, front and center,”

At the start of the year, many companies were focused on the shift away from traditional fuels toward clean energy, but energy security is now the priority, Taufik said.

Taufik added that while concerns over the affordability of energy and access to reliable sources are growing, renewable energy will eventually start to substitute fossil fuels.

More here: Energy security, not the energy transition, is ‘front and center’ again, Petronas CEO says

The fear is that ‘eventually’ won’t happen fast enough -- which is why John Kerry was yesterday insisting that the Ukraine war couldn’t be an excuse for relaxing on climate goals.

First Movers Coalition expands to push low-carbon tech

A coalition to decarbonize the world’s heavy industry and long-distance transport sectors has expanded.

The First Movers Coalition has added 20 more members, including Alphabet, BHP, Fedex, Ford and Microsoft, lifting its total to 55.

The Coalition targets sectors including aluminium, aviation, chemicals, concrete, shipping, steel, and trucking -- which are the toughest ones to decarbonise, but crucial for hitting the Paris Agreement goals.

Members make advanced commitments to buying low-carbon technologies, to help them reach commercial scale by 2030.

Aluminium and Carbon dioxide removal have been added to the list of sectors, with companies such as Ford and Volvo pledging that 10% of their purchased aluminium will be near-zero Co2 by 2030. That will require technologies not commercially available today.

John Kerry, the US special presidential envoy for climate, says the goal is to create a critical mass of companies backing “deep decarbonisation”.

Showing there is demand for decarbonising technologies should encourage them to be deployed commercially faster.

Kerry says this worked with vaccines in the pandemic, and space flight where there are now commercial services.

Using green steel to produce low-carbon ships, for example, would be more expensive at first, but a “powerful signal to the market”.

“The marketplace is going to do this,” Kerry told a press conference at the World Economic Forum.

“People are going to see that there is a demand for this.”

Citizens all around the world want a better life. They want clean air. They don’t want droughts and fires and floods and storms and the threat of massive sea level rise and so forth. That’s the course we’re on right now.

Several countries have joined up too, including the UK, to create early markets for clean technologies through policy measures (such as tax policies) and private sector engagement.

Marc Benioff, CEO of Salesforce, which was already a member, says it’s an example of the rise of environmental capitalism.

Benioff compares it to the IT revolution, saying he was inspired by Bill Gates, while if they were both starting out now they’d be ‘ecopreneurs’.

Brad Smith of Microsoft, which has joined today, explains that the Coalition is about building and validating a market.

Updated

The UK’s response to the Salisbury poisoning is an example of how Europe hasn’t been tough enough against Russia, says Irish Taoiseach Micheál Martin.

He tells Davos that the attack (in which Sergei and Yulia Skripal were poisoned with novichok) was a “public health attack” on European citizens.

And the response was that “a few diplomats were sent home”.

Wiith hindsight, one can indulge too much, and be complacent, Martin says.

Theresa May’s government expelled 23 diplomats over the attack on Skripal, a former Russian former double agent.

Ireland’s leader, Taoiseach Micheál Martin, says Brexit has strengthened Irish support for the EU, as it wasn’t well planned:

Updated

Zelenskiy: West lacking unity

Ukrainian President Volodymyr Zelenskiy has warned that the West remained divided over the extent of its support for Ukraine in its defence against Russia’s months-long invasion.

Zelenskiy said during a panel discussion on Ukraine at the World Economic Forum (via AFP) that:

“Unity is about weapons. My question is, is there this unity in practice? I can’t see it. Our huge advantage over Russia would be when we are truly united.”

Zelenskiy said Ukraine was grateful for support from US President Joe Biden but said resolve was lagging closer to home.

“We are on the European continent and we need the support of a united Europe.”

Zelenskiy specifically named neighbouring Hungary, which has voiced opposition to a European Union-wide embargo on Russian oil:

“Hungary is not as united as rest of EU,” Zelensky said.

He also pointed to a lack of consensus over Sweden and Finland’s historic bid to join NATO, which has been called into question by Turkey.

“Is there this unity regarding the accession of Finland and Sweden to NATO? No, no. So, is there a strong joint West? No.”

Luxembourg’s PM Xavier Bettel is backing “comprehensive support for the reconstruction of Ukraine”, having heard from president Zelenskiy this morning.

But as Politico’s David Herszenhorn points out - reconstruction can’t start until the war is over, and Ukraine risks being ‘cleaved into pieces’.

Updated

Mark Rutte, prime minister of the Netherlands, says Europe’s three largest powers should give up some of their sovereignty on foreign policies in the longer-term, to help the EU punch at its weight on the world stage.

Rutte tells delegates here at Davos that If Italy, France and Germany want to be foreign policy powers on their own, it will be very difficult for Europe to take a united stance.

Pooling some foreign policy sovereignty would help the EU coordinate its response to crises.

Rutte also says the EU should get rid of unanimity in the European Council over some issues, including sanctions [currently, one member state can block decisions].

Rutte explains that Europe should be the G1 on the world stage (with the US and China), but as it hasn’t added its GDP power together, it’s not as strong as it could be.

He also says that European Union has been “a playing field for too long, rather than a player”, but its response to the Ukraine war has changed that.

In the short term, Europe needs to need to invest in defense capability, and keep the international coalition on Ukraine together, he adds.

US pharmaceutical giant Pfizer CEO Albert Bourla at the World Economic Forum (WEF) annual meeting today.
US pharmaceutical giant Pfizer CEO Albert Bourla at the World Economic Forum (WEF) annual meeting today. Photograph: Fabrice Coffrini/AFP/Getty Images

Pfizer’s pledge will cover 23 medicines and vaccines that treat infectious diseases, certain cancers, and rare and inflammatory diseases.

It explains:

Making these medicines and vaccines more readily available has the potential to treat non-communicable and infectious diseases that claim the lives of nearly one million people each year in these countries and chronic diseases that significantly impact quality of life for at least half a million more

Paul Kagame, President of Rwanda, has welcomed Pfizer’s move:

“Rapid and affordable access to the most advanced medicines and vaccines is the cornerstone of global health equity.

Pfizer’s commitment under the Accord program sets a new standard in this regard. Combined with additional investments in strengthening Africa’s public health systems and pharmaceutical regulators, the Accord is an important step toward sustainable health security for countries at every income level.

Pfizer to sell all its patented drugs at nonprofit price in low-income countries

Pfizer has announced it will provide its patent-protected medicines and vaccines on a not-for-profit basis to 45 of the world’s poorest countries, in a drive to reduce health inequities around the world.

The pledge, called ‘An Accord for a Healthier World’, has just been launched here in Davos.

It means Pfizer will offer all the medicines and vaccines which are available in the U.S. or the European Union on a not-for-profit basis to 1.2bn in 45 lower-income countries.

Rwanda, Ghana, Malawi, Senegal and Uganda are joining the Accord, and will work with other low-income countries to “help identify and resolve hurdles” beyond the supply of medicines.

Updated

Economics professor Mariana Mazzucato hammers the point home too, telling delegates:

The labour share of global income is low. The profit share is high.

There’s nothing natural about that, Mazzucato adds, it’s a consequence of choices that have been made.

IMF's Gopinath: Wages can rise without creating spiral

IMF deputy MD Gita Gopinath also swept aside claims that wage rises should be suppressed to avoid a wage-price spiral.

Gopinath says we should be clear that inflation is prices going up, not wages.

You could absolutely have a situation in which wages rise, and prices don’t, she says, with company profits reducing instead.

Updated

Introduction: Fears over global growth after Soros's WW3 warning

Good morning from Davos, where worries over a possible global recession and escalating military conflict are weighing on global leaders and business chiefs.

With a global food crisis escalating, Ukraine war continuing, global economic uncertainty is on the rise -- creating a notably gloomy feel at the World Economic Forum.

Gita Gopinath, first deputy managing director of the International Monetary Fund, is telling delegates this morning that the war in Ukraine has been “a major setback” to the global economy.

And the world continues to face headwinds, she says:

....because we have a cost-of-living crisis as the prices of commodities including fuel and food are going up.”

High inflation is leading central banks to raise interest rates, and China’s economy is slowing due to its Covid-19 lockdowns and restrictions.

Gopinath says:

We have a confluence of shocks hitting the world, and we are still not out of the woods.

Gopinath also points out that there are very divergent recoveries due to the pandemic, with emerging and developing economies lagging.

Last night, veteran philanthropist George Soros gave a chilling warning that Russia’s invasion of Ukraine threatens to be the “beginning of the third world war” that could spell the end of civilisation.

In a ferocious attack on Vladimir Putin and China’s Xi Jinping at the World Economic Forum in Davos, Soros warned that autocratic regimes were in the ascendant and the global economy was heading for a depression.

With the mood in Davos already downbeat due to the war in Ukraine, Soros ramped up the gloomy rhetoric to new heights.

“The invasion may have been the beginning of the third world war and our civilisation may not survive it.

“The invasion of Ukraine didn’t come out of the blue. The world has been increasingly engaged in a struggle between two systems of governance that are diametrically opposed to each other: open society and closed society.”

Here’s the full story:

Today we’ll also hear from European Central Bank chief Christine Lagarde, Bill Gates, US commerce secretary Gina Raimondo, Greece’s PM Kyriakos Mitsotakis, Israel’s president Isaac Herzog, and Ukraine’s foreign minister Dmytro Kuleba.

The agenda

  • 8.45am Davos (7.45am BST): Panel on global growth outlook, with Siemens chair Jim Hagemann Snabe, UCL professor Mariana Mazzucato, IMF deputy MD Gita Gopinath

  • 9am Davos (8am BST): Press conference: Pfizer and Partners Announce Accord for a Healthier World

  • 10am Davos (9am BST): European Unity in a Disordered World? Slokavia’s president Eduard Heger, IMF chief Christine Lagarde, Netherlands PM Mark Rutte, European Parliament president Roberta Metsola, Micheál Martin, Taoiseach of Ireland.

  • 10.15am Davos (9.15am BST): A Conversation with Gina Raimondo, United States Secretary of Commerce

  • 11am Davos (10am BST): Press conference: expanding First Movers Coalition to decarbonize the global economy, with Salesforce CEO Marc Benioff, Mikael Damberg, Minister for Finance of Sweden, Bill Gates, Ruth Porat, CFO of Google, Microsoft president Brad Smith

  • 11.30am Davos (10.30am BST): A Conversation with Kyriakos Mitsotakis, Prime Minister of Greece

  • 2.30pm Davos (1.30pm BST): A panel on the return of war in Europe, including Sir Lawrence Freedman, Emeritus Professor of War Studies, King’s College London

  • 3pm Davos (2pm BST): Special Address by Isaac Herzog, President of the State of Israel

  • 3pm Davos (2pm BST): A Conversation with Dmytro Kuleba, Minister of Foreign Affairs of Ukraine

  • 5.30pm Davos (4.30pm BST): Press Conference: The New Economics of Water - Launch of Global Commission

  • 6.40pm Davos (5,40pm BST): Press Conference: Trade and Food Policy Outlook, with WTO director general Ngozi Okonjo-Iweala, and Svein Tore Holsether, CEO Yara

  • 7.20pm Davos (6.20pm BST): Press conference with Ukraine’s foreign affairs minister Dmytro Kuleba

Updated

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