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‘cost of living crisis’ | Journal of Public Health

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Dreading that climax of all human ills,

The inflammation of his weekly bills.

Lord Byron1

The phrase ‘cost of living crisis’ is bandied about by politicians, charities, bankers and a host of others. But what does it really mean? I took a straw poll among some friends and family and asked them what they thought it meant. All of them guessed that it was probably something to do with rising prices. The think-tank Institute for the UK Government defines the UK’s cost of living crisis as ‘the fall in real disposable incomes (that is, adjusted for inflation and after taxes and benefits) that the UK has experienced since late 2021’.2 However, I prefer the more realistic definition in ‘The Big Issue’3 (the world’s most widely circulated street newspaper founded to offer homeless people, or individuals at risk of homelessness, the opportunity to earn a legitimate income): ‘a situation in which the cost of everyday essentials like groceries and bills are rising faster than average household incomes’.4

Recent projections by United Nations Conference on Trade and Development estimate that the world economy will be a percentage point of GDP growth lower than expected.5 According to the World Bank’s recent Commodity Markets Outlook report, ‘the war in Ukraine has dealt a major shock to commodity markets, altering global patterns of trade, production, and consumption in ways that will keep prices at historically high levels through the end of 2024’.6 The increase in energy prices over the past 2 years has been the largest since the 1973 oil crisis. Price increases for food commodities (of which Russia and Ukraine are large producers) and fertilizers (the production of which rely on natural gas) have been the largest since 2008.6

Increasing food and energy prices by themselves have an impact on inequalities. In addition, according to the Financing for Sustainable Development Report 2022, ‘60 per cent of least developed and other low-income countries are already at high risk of, or in, debt distress’.7 An United Nations Conference On Trade And Development analysis of historical data8 indicates that civil unrest and increases in agri-food commodity prices are highly correlated. This ‘perfect storm’ following the social and economic impact of the COVID-19 pandemic can have knock-on effects of social unrest as illustrated by the situation in Sri Lanka.

António Guterres, the United Nations Secretary-General at a press conference to launch the report on the impact of the conflict in Ukraine on food security, energy and financing said: ‘for people around the world, the war [in Ukraine], together with the other crises, is threatening to unleash an unprecedented wave of hunger and destitution, leaving social and economic chaos in its wake. No country or community will be left untouched by this cost-of-living crisis.’

A paper for the United Nations Development Programme in July 20229 undertook the analysis of data from 159 countries. It projects that the current cost-of-living crisis may have pushed over 51 million people into extreme poverty at $1.90 a day, and an additional 20 million at $3.20 a day, with hotspots in Sub-Saharan Africa, particularly in the Sahel, the Balkans and the Caspian Basin.

The vicious cycles of poverty, hunger and inequalities created by the crisis shows that no one dimension of the crisis can be fixed in isolation, and no country is immune to its effects.

A plethora of reports and policy papers from local, national and international think-tanks, agencies, etc. outlining various recommendations are available. The consensus appears to be that urgent action is needed and existing policies and tools will need to be used flexibly and appropriately in the first instance. However, as the crisis will ‘leave deep and long-lasting scars’, further medium and long-term policy proposals will be needed subsequently.

‘Crises and deadlocks when they occur have at least this advantage, that they force us to think’10 and think we must and act collectively at local, national and global levels. As always, the public health community and its leaders have a role in gathering evidence, influencing governments and prompting policy makers to plan and implement appropriate policies to protect communities from the cost-of-living crises and further widen inequalities.

References

1.

Byron

L

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Don Juan canto 3, stanza. 35

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5.

United Nations Conference on Trade and Development

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Tapering in a Time of Conflict Trade and Development Report Update: March 2022 UNCTAD/GDS/INF/2022/2

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6.

World Bank Group.

Commodity Markets Outlook: The Impact of the War in Ukraine on Commodity Markets

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Washington, DC

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World Bank Group

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2022

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7.

United Nations

, Inter-agency Task Force on Financing for Development.

Financing for Sustainable Development Report 2022. (New York: United Nations, 2022)

. United Nations publication ISBN: 978–92–1-101452-5. https://developmentfinance.un.org/fsdr2022.

9.

Molina

GG

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Montoya-Aguirre

M

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Ortiz-Juarez

E

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Addressing the cost-of-living crisis in developing countries

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United Nations High-Level Political Forum on Sustainable Development (HLPF) 2022

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10.

Nehru

J

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The Unity of India: Collected Writings, 1937–1940

,

1942

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94

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© The Author(s) 2022. Published by Oxford University Press on behalf of Faculty of Public Health. All rights reserved. For permissions, please e-mail: [email protected]



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