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Food insecurity and economic misery in low-income countries

The deterioration in the global economic landscape has exacerbated suffering in the world’s poorest countries. Still recovering from the sharp downturn…

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By Carlos Arteta, Sergiy Kasyanenko

The deterioration in the global economic landscape has exacerbated suffering in the world’s poorest countries. Still recovering from the sharp downturn caused by the pandemic, low-income countries (LICs) are being hit hard by soaring inflation at home and rising global interest rates. Dislocations in global commodity markets due to the pandemic, amplified by the war in Ukraine, have led to food and fuel shortages and to surging prices of staple consumer goods. This is eroding real incomes, exacerbating food insecurity, and worsening extreme poverty in LICs. Surging world food prices, which reached their highest levels on record this year, are contributing to the rapid rise in LIC inflation (Figure 1). 

Figure 1. Inflation in low-income countries 

Sources: Food and Agriculture Organization of the United Nations (FAO);  Haver Analytics; World Bank.  

Note: “Median” line shows median percentage increase in consumer prices from 12 months earlier for a sample of eight low -income countries. Last observation April 2022. The base period prices of the FAO Food Price Index are the averages for the years 2014-2016. 

Food insecurity is exacerbating misery  

Food consumption accounts for 45 percent of total household expenditure in low-income economies, and diet is heavily based on staple foods including wheat. All LICs are food-deficit countries reliant on imported foods. Imports of wheat from just Russia and Ukraine account for about 14 percent of total caloric intake in a median LIC, compared with just 3 percent in the median emerging market and developing economy. Disruptions to wheat imports from Russia and Ukraine and surging global food prices are slowing LIC growth and increasing extreme poverty, particularly in countries where sizeable segments of the population were already experiencing acute food insecurity (Figure 2). 

Figure 2. Wheat imports and food insecurity in LICs  

Figure 2. Graph of Wheat imports and food insecurity in LICs

Sources: Global Network Against Food Crises; Comtrade (database); World Bank.

Note: DRC = Democratic Republic of Congo. Wheat imports shares are averages for 2019-2020; wheat imports data for Sudan is only available for 2018. “People in food crisis” indicates the estimated percentage of population being in phase 3 or above of the Integrated Food Security Phase Classification (IPC) for 2022; estimates are not available for Madagascar and Togo.

Subdued growth and stretched public finances have hamstrung the ability of governments to cushion vulnerable populations from soaring food and fuel prices. Even in LICs that do not rely on imports of wheat from Russia and Ukraine, millions of people are struggling to afford enough food to avoid hunger. Worsening hunger and malnutrition will inevitably exert adverse long-term consequences, compounding the pernicious effects of more than two years of pandemic on human capital. 

War-related disruptions and the sharp deceleration in global growth are amplifying other ongoing challenges faced by LICs, including pervasive poverty, deteriorating security, and policy uncertainty. As a result, growth forecasts for 2022 presented in the World Bank’s latest Global Economic Prospects report have been downgraded in more than 80 percent of LICs (Figure 3). Per capita income growth in LICs is projected to be a feeble 1.3 percent this year—well below that in middle-income countries (2.3 percent) and high-income countries (2.4 percent). 

Figure 3. Forecast revisions to 2022 growth  

Figure 3. Graph of Forecast revisions to 2022 growth

Sources: World Bank. 

Note: EMDEs = emerging market and developing economies; LICs = low-income countries. Sample includes 145 EMDEs and 22 LICs. Forecast revisions show the share of countries where 2022 growth forecasts were downgraded/unchanged/upgraded between January 2022 and June 2022 editions of Global Economic Prospects. Data for 2022 are forecasts. 

In commodity-exporting LICs, elevated commodity prices will only partly mitigate the deleterious effects of higher food and fuel costs. In these countries, surging living costs are tempering gains from increased export earnings. High oil prices are also unlikely to boost growth meaningfully in LIC energy exporters, as aging oil fields as well as pandemic-induced maintenance delays and weak extractive investment limit prospects for increased oil production.  

Agricultural production in most LICs is also expected to remain subdued, further tightening food supply. Several LICs have faced worsening drought conditions and planting delays due to erratic and poor rainfall. In some LICs, higher prices of grains are expected to limit the ability of farmers, especially those dependent on subsistence agriculture, to purchase enough seeds for the new planting season and feed for livestock. The war in Ukraine has also disrupted the global supply of fertilizers. Insufficient access to agricultural inputs could lead to a state of widespread, low-productivity subsistence farming, rendering LIC food systems more vulnerable to shocks.  

More suffering ahead 

These sobering prospects could be even weaker if supply shortages, conflict, and divisions persist. With almost all LICs relying on imports of wheat, a longer-lasting disruption to global trade in cereals would worsen affordability and availability of staple foods. Further price increases of farming inputs—such as seeds, fuels, and fertilizers—could lead to worsening food price pressures. These pressures would be particularly painful in LICs where climate change has already depressed productivity in farming and in those with high incidence of extreme poverty. In this environment of high inflation, a more pronounced deterioration in living standards would exacerbate social unrest, especially in countries suffering from high levels of insecurity and violence. As financial conditions tighten, higher risk aversion would lead to increases in borrowing costs in LICs. High levels of public debt and increased non-concessional borrowing could further stall progress in debt relief. About one-fourth of all LIC external debt has variable interest rates, compared to just 11 percent in 2010.  

Quick and coordinated responses needed 

Already weakened by the adverse shocks during the last two years, LICs are facing stiff headwinds. The scope for domestic fiscal and monetary policy responses is in most cases limited. A concerted global effort is necessary: 

  • A rapid global response to improve access to safe and nutritious food and bolster food security is critical for health and human development in LICs. The international community needs to substantially scale up financing of LICs’ food systems, including measures that target farming, nutrition, social protection, water, and irrigation.  
  • LICs also face formidable debt-related challenges. Even before the invasion of Ukraine, about 60 percent of LICs were in or near debt distress. To mitigate the risks that debt burdens lead to financial crises, globally coordinated debt relief efforts are essential.  
  • The global community also needs to help foster LIC vaccination rates, which continue to lag far behind other EMDEs owing to a combination of insufficient supply, logistical challenges, and vaccine hesitancy. Sustained collective action is required to bolster pandemic preparedness and rapidly expand vaccination campaigns in LICs.  
  • Finally, the increasing frequency and severity of climate-related disasters highlights the escalating costs of climate change, especially among the poorest countries. Green investment projects need to be accompanied by policies to reduce the economic, health, and social costs of climate change, many of which are borne disproportionately by vulnerable populations in poor economies and make these countries more resilient to climate shocks.  

In the poorest countries of the world, a quick return to economic growth and prosperity is the surest antidote to all these problems, including climate change.

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Economics

Reduced myocardial blood flow is new clue in how COVID-19 is impacting the heart

Patients with prior COVID may be twice as likely to have unhealthy endothelial cells that line the inside of the heart and blood vessels, according to…

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Patients with prior COVID may be twice as likely to have unhealthy endothelial cells that line the inside of the heart and blood vessels, according to newly published research from Houston Methodist. This finding offers a new clue in understanding covid-19’s impact on cardiovascular health.

Credit: Houston Methodist

Patients with prior COVID may be twice as likely to have unhealthy endothelial cells that line the inside of the heart and blood vessels, according to newly published research from Houston Methodist. This finding offers a new clue in understanding covid-19’s impact on cardiovascular health.

In a new study published today in JACC: Cardiovascular Imaging, Houston Methodist researchers examined the coronary microvasculature health of 393 patients with prior covid-19 infection who had lingering symptoms. This is the first published study linking reduced blood flow in the body and COVID-19.

Using a widely available imaging tool, called positron emission tomography (PET), researchers found a 20% decrease in the ability of coronary arteries to dilate, a condition known as microvascular dysfunction. They also found that patients with prior COVID-19 infection were more likely to have reduced myocardial flow reserve – and changes in the resting and stress blood flow – which is a marker for poor prognosis and is associated with a higher risk of adverse cardiovascular events.

“We were surprised with the consistency of reduced blood flow in post covid patients within the study,” said corresponding author Mouaz Al-Mallah, M.D., director of cardiovascular PET at Houston Methodist DeBakey Heart and Vascular Center, and president elect of the American Society of Nuclear Cardiology. “The findings bring new questions, but also help guide us toward further studying blood flow in COVID-19 patients with persistent symptoms.”

Dysfunction and inflammation of endothelial cells is a well-known sign of acute Covid-19 infection, but little is known about the long-term effects on the heart and vascular system. Earlier in the pandemic, research indicated that COVID-19 could commonly cause myocarditis but that now appears to be a rare effect of this viral infection.

A recent study from the Netherlands found that 1 in 8 people had lingering symptoms post-covid. As clinicians continue to see patients with symptoms like shortness of breath, palpations and fatigue after their recovery, the cause of long covid is mostly unknown.

Further studies are needed to document the magnitude of microvascular dysfunction and to identify strategies for appropriate early diagnosis and management. For instance, reduced myocardial flow reserve can be used to determine a patient’s risk when presenting with symptoms of coronary artery disease over and above the established risk factors, which can become quite relevant in dealing with long Covid.

Next steps will require clinical studies to discover what is likely to happen in the future to patients whose microvascular health has been affected by COVID-19, particularly those patients who continue to have lingering symptoms, or long COVID.

This work was supported, in part, by grants from the National Institutes of Health under contract numbers R01 HL133254, R01 HL148338 and R01 HL157790.

———————–

For more information: Coronary microvascular health in patients with prior COVID-19 infection. JACC: Cardiovascular Imaging. (online Aug. 16, 2022) Ahmed Ibrahim Ahmed, Jean Michel Saad, Yushui Han, Fares Alahdab, Maan Malahfji, Faisal Nabi, John J Mahmarian, John P. Cook, William A Zoghbi and Mouaz H Al-Mallah. DOI: www.doi.org/10.1016/j.jcmg.2022.07.006

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War, peace and security: The pandemic’s impact on women and girls in Nepal and Sri Lanka

The impacts of COVID-19 must be incorporated into women, peace and security planning in order to improve the lives of women and girls in postwar countries…

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Nepalese girls rest for observation after receiving the Moderna vaccine for COVID-19 in Kathmandu, Nepal. (AP Photo/Niranjan Shrestha)

Attention to the pandemic’s impacts on women has largely focused on the Global North, ignoring countries like Nepal and Sri Lanka, which continue to deal with prolonged effects of war. While the Nepalese Civil War concluded in 2006 and the Sri Lankan Civil War concluded in 2009, internal conflicts continue.

As scholars of gender and war, our work focuses on the United Nations Security Council Resolution 1325 on women, peace and security. And our recently published paper examines COVID-19’s impacts on women and girls in Nepal and Sri Lanka, looking at policy responses and their repercussions on the women, peace and security agenda.

COVID-19 has disproportionately and negatively impacted women in part because most are the primary family caregivers and the pandemic has increased women’s caring duties.

This pattern is even more pronounced in war-affected countries where the compounding factors of war and the pandemic leave women generally more vulnerable. These nations exist at the margins of the international system and suffer from what the World Bank terms “fragility, conflict and violence.”

Women, labour and gender-based violence

Gendered labour precarity is not new to Nepal or Sri Lanka and the pandemic has only eroded women’s already poor economic prospects.

Prior to COVID-19, Tharshani (pseudonym), a Sri Lankan mother of three and head of her household, was able to make ends meet. But when the pandemic hit, lockdowns prevented Tharshani from selling the chickens she raises for market. She was forced to take loans from her neighbours and her family had to skip meals.

Some 1.7 million women in Sri Lanka work in the informal sector, where no state employment protections exist and not working means no wages. COVID-19 is exacerbating women’s struggles with poverty and forcing them to take on debilitating debts.

Although Sri Lankan men also face increased labour precarity, due to gender discrimination and sexism in the job market, women are forced into the informal sector — the jobs hardest hit by the pandemic.

Two women sit in chairs, wearing face masks
Sri Lankan women chat after getting inoculated against the coronavirus in Colombo, Sri Lanka, in August 2021. (AP Photo/Eranga Jayawardena)

The pandemic has also led to women and girls facing increased gender-based violence.

In Nepal, between March 2020 and June 2021, there was an increase in cases of gender-based violence. Over 1,750 incidents were reported in the media, of which rape and sexual assault represented 82 per cent. Pandemic lockdowns also led to new vulnerabilities for women who sought out quarantine shelters — in Lamkichuha, Nepal, a woman was allegedly gang-raped at a quarantine facility.

Gender-based violence is more prevalent among women and girls of low caste in Nepal and the pandemic has made it worse. The Samata Foundation reported 90 cases of gender-based violence faced by women and girls of low caste within the first six months of the pandemic.

What’s next?

While COVID-19 recovery efforts are generally focused on preparing for future pandemics and economic recovery, the women, peace and security agenda can also address the needs of some of those most marginalized when it comes to COVID-19 recovery.

The women, peace and security agenda promotes women’s participation in peace and security matters with a focus on helping women facing violent conflict. By incorporating women’s perspectives, issues and concerns in the context of COVID-19 recovery, policies and activities can help address issues that disproportionately impact most women in war-affected countries.

These issues are: precarious gendered labor market, a surge in care work, the rising feminization of poverty and increased gender-based violence.

A girl in a face mask stares out a window
The women, peace and security agenda can help address the needs of some of those most marginalized. (AP Photo/Niranjan Shrestha)

Policies could include efforts to create living-wage jobs for women that come with state benefits, emergency funding for women heads of household (so they can avoid taking out predatory loans) and increasing the number of resources (like shelters and legal services) for women experiencing domestic gender-based violence.

The impacts of COVID-19 must be incorporated into women, peace and security planning in order to achieve the agenda’s aims of improving the lives of women and girls in postwar countries like Nepal and Sri Lanka.

Luna KC is a Postdoctoral Researcher at the Research Network-Women Peace Security, McGill University. This project is funded by the Government of Canada Mobilizing Insights in Defence and Security (MINDS) program.

Crystal Whetstone does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Target Sets Sights on Holiday Season, Has Plan for High Inventory

Target said that it still expects spillover from inventory rightsizing to the tune of $200 million in the third quarter.

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Target said that it still expects spillover from inventory rightsizing to the tune of $200 million in the third quarter.

Target's  (TGT) - Get Target Corporation Report strategy is paying off as the company's stock falls on heavy volume following its earnings release. 

Normally, a profit miss as wide as Target's, 39 cents per share vs. expectations of 72 cents per share, would result in a bigger drop than Target's, but the retailer has been prepping the market for this miss all summer. 

The inventory the company built up during the height of the pandemic, as Americans shopped more from home, needs to go, and the only way get rid of the excess product is deep discounts. 

"Back in June, we announced that our team would be undertaking a bold effort to rightsize our inventory position in the categories for which demand patterns have radically changed," CEO Brian Cornell said during the company's earnings call. "While this decision had a meaningful short-term impact on our financial results, we strongly believe it was the best path forward."

Now, looking forward the company sees some overhang for the third quarter, but expects a big holiday season ahead. 

While some fear a recession and what it might do to the economy, Target is convinced that the holiday season will be strong.

Image source: John Smith/VIEWpress.

Target Aims for Holiday Season

While Target is focused on the back-to-school season currently underway, the company expects "spillover" from its inventory issues to be present during the third quarter to the tune of $200 million. 

But the company's own checks suggest that its shoppers are excited about the holiday season. 

"The one thing that seems to be very consistent is a guest and consumer who says they want to celebrate the holiday seasons so we certainly expect that they are going to be celebrating Halloween this year and actively trick or treating and hosting parties with friends and family," Cornell said.

"We know they're looking forward to Thanksgiving and they're going to look forward to celebrating the Christmas holidays and that comes down each and every week as we survey consumers and talk to our guests so that gives us great optimism for our ability to perform during these key holiday seasons"

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Not only does Target expect a strong quarter, but the company also expects favorable comps as fourth quarter headwinds from a year ago aren't present this time around. 

"Guests already have their sights set on upcoming holidays and seasonal moments in Q3 and beyond," Cornell said.

Target's Q2 Collapse

Target said adjusted earnings for the three months ending in July were pegged at 39 cents per share, down 89% from the same period last year and well shy of the Street consensus forecast of 72 cents per share.

Group revenues, Target said, rose 3.5% to $26 billion, essentially matching analysts' estimates of a $26.04 billion tally. Target said same-store sales rose 2.6%, again shy of the Refinitiv forecast of 3.2%, while operating margins fell to 1.2%, below the group's July guidance of a 2% level. 

Earlier this summer, Target cautioned that its bigger-than-expected 35% build-up in overall inventories over the first quarter would trigger price cuts, adding that deeper discounts would be needed to shift the excess goods onto a customer base that was already pulling back on discretionary spending.

Walmart  (WMT) - Get Walmart Inc. Report, Target's larger big box rival, said Tuesday that improving spending trends, as well as actions the group has taken to shift excess inventory, will ease some of the pressures it expects to face in terms of overall profits over the back half of the year.

Walmart said adjusted earnings for the three months ended in July came in at $1.77 per share, down one penny from the same period last year but well ahead of the Street consensus forecast of $1.62 per share.

Group revenues, the company said, were tabbed at $152.9 billion, an 8.4% increase from last year that topped analysts' estimates of $150.81 billion. U.S. same-store sales rose 6.5% from last year, the company said, firmly topping the Refinitiv forecast. 

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