UN report says Pakistan ‘very vulnerable’ to higher commodity prices

The United Nations listed Pakistan, India, Bangladesh and Nepal among the lower-middle income countries with a warning that South Asia is “very vulnerable to the higher global commodity prices that have resulted from the [Ukraine] conflict”.

In a latest report titled “World Economic and Social Outlook Trends 2023”, the UN mentioned the risk of being vulnerable to the higher commodity prices despite noting that South Asia has not been affected by the Ukraine war because of fewer direct links with Russia and Ukraine.

The report argues that recent high and volatile energy prices have shown South Asia’s vulnerability to energy imports, and underlines “a clear need to become less dependent on these imports”.

About Pakistan, it said the country would continue to be exposed to fluctuating energy prices and asked the entire South Asian region to reduce energy consumption.

The report placed India and Bangladesh among lower-middle-income countries despite their economic gains and said South Asia “remains highly vulnerable to natural disasters, for example on the flood plains of Pakistan and Bangladesh.”

Countries such as Pakistan “are also increasingly held back by very high levels of energy subsidies, which weigh heavily on public finances and are failing to reduce poverty effectively”, the report read.

According to the report prepared by the UN’s International Labor Organization (ILO), finding a decent and well-paid job will be harder in 2023 than it was in 2022, thanks to the continuing global economic downturn.

The UN agency predicts that the number of people unemployed around the world would rise slightly to 208 million in 2023. This corresponds to a global unemployment rate of 5.8 percent — or 16 million people. Today’s economic slowdown “means that many workers will have to accept lower quality jobs, often at very low pay, sometimes with insufficient hours,” the report adds.

It notes that this is already happening in Europe and other developed countries, thanks to the Ukraine war and the continued disruption of global supply chains, both of which are counteracting the robust stimulus packages implemented to ride out the Covid-19 crisis.

“Real wages we project for 2022 to have declined by 2.2 percent in advanced countries and of course, Europe makes up a significant proportion of advanced countries, versus a rise in real wages in developing countries,” says Richard Samans, Director of ILO’s Research Department. The report also predicts a setback to the informal economy, which will adversely affect efforts to help the world’s two billion informal workers join the formal employment sector.

As prices rise faster than wages, the cost-of-living crisis risks pushing more people into poverty, the report adds, pointing out that the trend follows significant declines in income during the Covid-19 crisis, which affected low-income groups most, in many countries. Some 214m workers live in extreme poverty today, “in other words with $1.90 a day”.

From a gender perspective, the unequal development of the global jobs market continues to be concerning. There are 290 million youth who are not in employment, or in education or training and “young women are faring much worse,” the report warns.

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