OECD urges support for vulnerable as war undermines global recovery

By Ovunc Kutlu

ANKARA (AA) – The Organization for Economic Co-operation and Development (OECD) on Thursday called for support to vulnerable as the Ukraine-Russia war undermines global recovery.

"The measures could be financed by considering windfall taxes on energy company profits," the intergovernmental economic organization said in a report titled OECD Economic Outlook, Interim Report March 2022.

The OECD said it must be ensured that trade and agriculture keep flowing to emerging and lower-income economies.

It noted that commodity prices have risen sharply, as Russia and Ukraine are important producers of wheat, fertilizers and metals used in industry such as nickel and palladium.

"Disruptions to wheat, maize and fertilizer risk raising hunger and food insecurity across the world in particular in emerging market and low-income countries," it said.

The OECD said the war also has an impact on energy prices, with Russia supplying around 16% of the world’s natural gas and 11% of oil, and Europe is highly dependent on Russian gas and oil.

"Gas spot prices in Europe are now more than 10 times higher than a year ago while the cost of oil has nearly doubled over the same period. The price shock risks increasing poverty and disrupting the production of goods and services worldwide," the report said.

The organization called for diversification of energy supplies and investment in energy security.

It also advised reducing dependency on fossil fuels, maximizing the use of existing low-emissions sources, including bioenergy and nuclear, increasing liquefied natural gas imports, and accelerating green energy investment with more funding for innovation.