The strong dollar is also about elevated commodity prices. They have eased somewhat. I mean how are you assessing the risk of
elevated commodity prices as well as the ability of emerging markets to cope with it. Yeah I think we we worry about the
commodity prices even though it's stabilized because it remains high. It's stable but it remains high. Food prices are still
like 40 percent higher compared to the beginning of the year. Energy prices obviously still high. And we think that commodity
prices are going to remain high for the next two years because it takes time to adjust to it depending also of course how long
the war is going to last. But to have the supply response say something like energy it takes time. So we are predicting like
hot commodity prices will be high for the next two years. What does that mean. It means including fertilizers. There's two
things that are important. Affordability for poor households and the poorer parts of your population. So we at the bank we are
working with countries to come up with support programs to address the high food prices and energy prices for the poor
households. Second you've got to make sure food is available right. And this is about making sure you don't have
counterproductive trade restrictions which accentuate the price increase. And this is something with the WTO and so on that
needs to happen. And second I think we in the 2008 crisis it was more about food. This time we have fertilizer in the mix. So if
you don't make sure that fertilizers get to farmers in time you will affect the next season's production and for our part of the
world in Asia. This can affect rice. Right. And that's something we need to watch out for. You talk about how prices will remain
elevated but have they peaked because some say inflation is close to peaking. They haven't peaked already. There is a sense
that it may it's peaking. But again it will depend how long the war last. How much disruption will happen. How much will
fertilizer a shortage of fertilizer high price of fertilizer will lead to lower production which will then accentuate the
price increase. And then on the energy side how much diversification can happen in India in the short period of time
before you will see some alleviation in terms of the supply constraints.
Laurie because when we look at another pressure here and we have this report coming through from the United Nations Department of
Social and Economic Affairs showing that the global population was hit 8 billion. And even though it's slowing down the growth
of it 8 billion by November this is just adding to the urgency. Yes absolutely.
So while we are addressing the immediate issue of food insecurity we've got to really address the drivers of food
insecurity which existed before the war. So a large part of what we need to do is also to look at the longer term issues that's
driving of lower food production. And that ranges from addressing the climate change issues. It's about improving the
land management issue making sure you have sustainable production practices and investing investing in agriculture
including on the research side. So there's there's a short term program to improve the productivity and the production. And then
there's a medium and longer term program. And it is very much linked to the climate change agenda. A lot of the decline in
food production I see in Africa has been due to climate related disasters as well as
dry very dry hot spots around. And it's driving conflict. It's driving poverty and driving high
rates of hunger as well. Okay. We look at Sri Lanka when they decided to ban fertilizers
for instance it's caused many many problems in that country. But is it not the case that as we head for this climate imperative
that getting that may actually also be bad for farming unless it's managed properly. This cannot be solved without cooperation
and collaboration. Absolutely. We need cooperation and collaboration. First of all
to make fertilizer available. And that is something that that is I would say very urgent as well. Because we don't want to have.
We want to make sure that production for the next season is not going to be affected because otherwise you will have not just
wheat prices going up. You mean you will have other food prices going up. Second how do you you know use fertilizers more
efficiently. And that is related to the fertilizer subsidy programs that are often in place in countries which because it's
subsidized it least a lot of waste and. Inefficient use. Which you know leads to a contribution also to the climate change. So
you'll have to focus on sustainable agriculture practices. Subsidies that that are more targeted to increasing productivity
increasing sustainable and smart agriculture practices. And you have to do also a lot. There's a lot of homework on the land use
management side of it. Of course it hit Sri Lanka. It defaulted. Pakistan could be next. What other countries are at risk. Well
you know there's a number out there where low income countries. I think it's 60 if I'm not mistaken. There are already close to
that distress. And then there are a larger number of increasing number of middle income countries. But I think what's
important is to to really anticipate this and work with the countries as in the case of Sri Lanka we will have we have been
working with development partners to look at how we can restore stability and a broader based approach. Growth. But we will have
to wait for a new government. We will have to wait for the IMF to come in with its program. Supply chain disruptions have led
to the inflation level that we're seeing right now. And it's also led governments to look at bringing manufacturing back
home. A reassuring on shoring friend shoring. Some say what impact might this have on emerging economies. I mean it could be
detrimental to them and their growth. Yes. This is absolutely something that we need to pay attention to because I still
believe trade and investment is still an important source of recovery and growth for developing countries. And global value
chains have been very important in that. And therefore moving forward how do we make sure that we don't have this short term
view in the name of resilience and energy security or food security or medicals equipment security that you have on shoring
or reassuring. Self-sufficiency is not the answer. If the worry is about having enough just in time products the answer is
diversification. Diversification between countries as well as products that are needed. I think the moment you go for you know
are you going to only trade with those you have alliance with then you you will be cut. You will have a fractured fragmented
world that will actually exclude developing countries. Very big issue. Just one other thing to note here is should a
lot more money be going into the politics of all this and enhancing democracy. Because I mean there's a statistic that
there's never been a famine in a democracy. I think this is. Well it's part yes. Partly bad policies that
are driven by by maybe bad politics. And this is something obviously for food. Yes something like food. All countries all
governments. I have been in government before. The issue of food availability and food price is uppermost in
many governments minds. And therefore it does have to be couched in in in in good policies as well. Because what you don't want
is controlling price. What we don't want to happen right now in the food insecurity situation is controlling prices for the
whole population because A it's going to be fiscally heavy on you. And second it's it's it's not helping the supply and demand
responses that needs to happen. What you need to happen is what needs to happen is to protect the poor and vulnerable. And this
can be a flexible program and expand it to a wider part of the population but not for the whole population because it will
affect the supply and demand responses that you want to happen to to address the food shortage gap as well. Right. So I think I
think we need to work with governments to ensure that they can have the right policy framework and mindful of the fact that
it's uppermost in their mind how to ensure that they protect the people in their countries.