Webinar debates how social protection can help cope with the ripple effects of the war in Ukraine
Photo: © GIZ
The International Policy Centre for Inclusive Growth (IPC-IG), the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), and the socialprotection.org platform organised a webinar on how to use adaptive social protection to anticipate and prevent global price shocks and hunger resulting from the war in Ukraine.
The webinar entitled “Ripple effects of the war in Ukraine: What role can 'adaptive' social protection play to prepare for and respond to anticipated global price shocks and hunger?” was held on 24 March and featured specialists from GIZ/BMZ; the Food and Agriculture Organization of the United Nations (FAO); the World Food Programme (WFP); the World Bank; and the United Nations International Children's Emergency Fund (UNICEF). It was moderated by Edward Archibald, independent social protection consultant and Lead Technical Adviser of the Social Protection Technical Assistance, Advice and Resources (STAAR).
Global context
While the world is still reeling from the COVID-19 pandemic, the next shock is already around the corner: skyrocketing food and energy prices resulting from the war in Ukraine.
Holger Matthey, Senior Economist with FAO’s Markets and Trade Division, explained that food prices are at a record high, according to the latest ‘FAO Food Price Index’. This situation could become even worse with the conflict between Russia and Ukraine.
As the most important producer of energy and staple crops such as wheat and corn, a supply failure from Russia would lead to severe shortages and consequent global price hikes.
Additional upward pressure on international food commodity prices impacts low-income food-deficit countries (LIFDCs) in particular. Dr. Tania Vorwerk, Global Health director of Pandemic Prevention and One Health at BMZ, explained that the increase in food prices is expected to produce more significant impacts on the Asia-Pacific, sub-Saharan, and Near East & North Africa regions.
With limited coping capacity, not only households living in poverty but also parts of the middle class might become dependent on international humanitarian assistance.
How can national actors predict the effects of price shocks in their countries?
Sam Muradzikwa, Chief of the Social Policy Section at UNICEF Ethiopia, explains that studies that only require pre-price-hike data and the specification of relevant price or income changes are of particular importance to policymakers, since these studies can guide evidence-based planning and targeting of mitigation programmes. Muradzikwa stressed that “the transmission of the price shocks to local economies will heavily impact livelihoods and vulnerable groups”, and that a shock in an already vulnerable group can create systemic challenges.
In this sense, Sarah Laughton, Chief of the Social Protection Unit at WFP, highlighted that “shocks only generate crises when people are unable to cope with them. Any efforts countries are making to improve social protection are already helping to reduce the impact of price shocks”. She believes that price shocks are going to have an impact on overall social protection systems and services and that “we need new strategies and plans”.
Adaptive social protection
The speakers agreed that before this emergency scenario becomes a reality, much can be done in terms of prevention. An increasing number of countries have systems in place that can prevent mass dependency on humanitarian assistance. Well-designed ‘adaptive’ social protection systems can flexibly distribute cash to those who need it the most and top-up existing benefits ahead of time, while markets keep functioning.
Ugo Gentilini, Global Lead for Social Assistance at the World Bank, reflected on lessons learned from the ongoing COVID-19 responses and stated that “instead of jumping into new programmes to tackle food shocks, we could look back at ongoing programmes and reawaken them”.
According to Marco Knowles, Senior Social Protection Officer at FAO’s Inclusive Rural Transformation and Gender Equality Division, a coordinated response between trade, agriculture and nutrition is needed. He explained that “supporting demand through income transfers needs to be complemented with supply-side interventions, otherwise there is a risk of increased inflation at the local level”. He also argued that there is a need to encourage diet changes, shifting away from products that are most affected by food price hikes and dependant on imports and fertilisers.
About the #ASPects Webinar Series
This is the sixth webinar in the "ASPects – Practice Exchange on ASP" series. These webinars are dedicated to bringing together practitioners, leading experts, and policymakers to share and exchange perspectives on Adaptive Social Protection (ASP). Each webinar in the series focuses on specific practical aspects of a related World Bank ASP Building Block framework (Institutional arrangements and partnerships - Programs - Data and information - Finance). This webinar is related to the “Programmes” Building Block.
The series, organised by the GIZ Global Programme Social Protection Innovation and Learning (SPIL) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), in cooperation with the IPC-IG, the socialprotection.org platform, and other partners, aims at informing global public policy dialogue on systems for building back better and better preparedness for future shocks.