UNDP warns Middle-East war could push 30 million into Poverty

Paris: Administrator of the United Nations Development Programme (UNDP) Alexander De Croo warned today that the US-Israeli war on Iran, and the sharp rise in energy and fertilizer prices it has caused, could push more than 30 million people into poverty.

Speaking on the sidelines of a G7 development meeting in Paris, he said the situation represents a reversal of development, noting that building stable societies and developing local economies had taken decades, while the war required only weeks to undermine those gains.

He added that a study conducted by the UNDP six weeks after the outbreak of the war concluded that, even if the conflict were to stop at that point, around 32 million people would be pushed into vulnerability across 160 countries.

The war has led to the closure of the Strait of Hormuz, through which about one-fifth of global oil and liquefied natural gas supplies pass during peacetime. The Gulf countries are also major sources of petroleum products and raw materials needed for fertilizer production.

The decline in supplies and rising prices have prompted several countries in Africa and Asia to take measures to curb consumption, including fuel rationing and reducing weekly working hours, in contrast to other countries that have cut fuel taxes to ease the burden on consumers.

The UNDP warned of deep repercussions of the war on sub-Saharan African countries, as well as some Asian nations such as Bangladesh and Cambodia, along with small island developing states that are expected to be heavily affected.

De Croo said that rising energy costs and fertilizer shortages would have wide-ranging effects in the coming months on populations in these countries, also warning of risks related to political instability and a decline in remittances from abroad, particularly from workers in Gulf countries.

He noted that the program estimated a need for about $6 billion in aid to support the most affected groups by rising food and energy prices and to prevent the expansion of poverty.

He explained that discussions are already underway within both the International Monetary Fund and the World Bank on ways to respond, adding that although the amount is substantial, it remains lower than the cost of the war, which is estimated at around $9 billion per week.

These warnings come at a time when development aid has fallen to its lowest levels on record, after declining by more than 23% last year due to reduced contributions from major donors, particularly the United States.