The Guardian’s view on the cost of living crisis: a global emergency | Editorial
Jhe United Kingdom is sliding towards a social and economic crisis the likes of which its people have not seen in decades. Household fuel bills are set to hit £2,400 this fall as the price of groceries soar. Meanwhile, the economy is stagnating and average employee wages continue to fall behind inflation, which hit 7% in March, the highest rate since 1992. It’s no wonder charities and analysts working on poverty and inequality issue such dire warnings. One in three Britons – 23.5 million people – will not be able to afford the cost of living this year, according to one projection.
The rest of the world is being buffeted by the same storms: Covid, followed by soaring food and fuel prices, then the Russian invasion of Ukraine, which led to another massive increase in the cost of basic commodities . The difference is that most other countries don’t have our wealth, our social security system or our infrastructure. So imagine the devastation felt elsewhere, in less wealthy, less stable and less powerful countries. In Somalia, the Food and Agriculture Organization of the United Nations (FAO) predicts that more than 6 million people will fall into “crisis, emergency or catastrophic levels of hunger“in the next two months.
Add to that southern Ethiopia and Kenya, and the total number of people facing “crisis or worse” jumps to 16 million. A terse, bureaucratic, economic expression – “crisis or worse” – denotes unimaginable human trauma: selling everything you have to feed your children, leaving your family home and walking miles to feed yourself. It takes a lot of luck to survive such rigors.
Now imagine the fate that befalls families from Africa to Asia to Latin America, because that is what awaits them. Oxfam predicts that 260 million people will be pushed into extreme poverty this year alone, meaning living on $1.90 (about £1.50) a day or less. These are huge numbers which, until now, have been largely ignored. To take a small example: earlier this year, the FAO appealed for $138 million in assistance to farming families in Somalia; four months later, nearly two-thirds are still left. Much of the wealthy world – its governments, households and businesses – is focused on helping Ukraine, but sadly it is just one of many countries that desperately need help.
Some basic things can be done, both in the UK and overseas. Chancellor Rishi Sunak could immediately return the billions he cut from the aid budget. Next week, finance ministers from around the world will travel to Washington DC to the spring meetings of the IMF and the World Bank. There they could agree to supplement the humanitarian aid needed in the Horn of Africa, Afghanistan and elsewhere. They could restructure the debt of poorer countries, canceling loans that are simply unpayable and suspending interest payments on others. And they should increase the financial reserves or strategic drawing rights provided by the IMF, while stipulating that they must go to the poorest countries without the usual conditions imposed by Washington economists.
It remains outrageous that the rich world has not given up patents on Covid vaccines or supported poorer countries in making them. And it’s high time a wealth tax was introduced in all countries, levied on those who prospered wildly during the pandemic and then spent their profits on space travel or stocks in struggling social media companies.
The cost of not doing at least some of the above will be high: in human lives, in geopolitical stability, in financial markets. This week, Sri Lanka warned it would forgive its foreign debts, even as thousands of protesters took to the streets of Colombo to demand the overthrow of their president. More dominoes are bound to fall.