Global Maritime Forum 2022 Annual Summit: Opening Session

Statement by Rebeca Grynspan, Secretary-General of UNCTAD

Global Maritime Forum 2022 Annual Summit: Opening Session

New York
22 September 2022

[as prepared for delivery]


Jan Dieleman, President of Cargill Ocean Transportation, and Chair of the Global Maritime Forum,

Industry leaders, partners, and colleagues,

Ladies and gentlemen,

Dear friends,

I want to begin by thanking our hosts, the Global Maritime Forum, for organizing such a wonderful event, in such a remarkable place. The Brooklyn Navy Yard, which was dubbed at the height of World War Two as the “can-do shipyard”.

And just to make sure that the symbolism of the moment is still not lost on the audience, the organizers also titled this edition of the forum with the words “braving the rough seas”.

Braving the rough seas from the can-do shipyard. I think all of us here know exactly what this means.

This is why I don’t want to only thank the organizers. I also want to thank all of you here present today, from all along the maritime trade supply chain.

I want to thank you for doing all you can to brave these rough seas. Through the work I have done through the Black Sea Grain Initiative, and the agreement for the unimpeded access of Russian food and fertilizers to world markets, I have seen your bravery first-hand.

I have seen you sail through literally mined waters. I have seen you work the ports in the middle of a war zone. And I have seen you get out, and come back in, to get grain and fertilizers out into world markets in the middle of a food crisis. So, from the bottom of my heart – thank you.

But let me say one thing – which is in a way the one-line summary of the speech I have prepared for you today. There are rougher seas ahead. And we will need your bravery more than even before.

Dear friends,

To say that maritime trade is going through a historic moment of crisis and disruption is accurate in the sense that it is true. But it is also inaccurate because this description is incomplete.

The disruption in trade that we are seeing is just one of many across the entire international system. The world is not just dealing with one crisis, but with a cascade of crises, as UN Secretary-General António Guterres calls it.

Since 2020, no country has had a rest from being in emergency mode. And things are getting, in some cases, worse.

A public health crisis has led to a socioeconomic crisis, which is now rapidly turning into a debt and finance crisis, where up to 60% of low-income countries, and 30% of middle-income countries, are near debt distress.

Climate change is hitting us harder every year, pilling up costs at a time when countries don’t have enough fiscal space to cope with disasters, let alone invest in their own long-term development. 

Prices for key commodities are at multiple times the average of the previous decade: in the case of food, at least 50% higher; in the case of energy, twice as high; in shipping, three times as high. And for some fertilizers, also three times as high.

The case of fertilizers is particularly worrying, since it is the top input cost for many small farmers around the world, who are being priced out. We have already lost a sowing season in West Africa because of this.

The food affordability crisis we are dealing with today may become a food availability crisis come next year because of the fertilizer issue if we don’t intervene.

Inflation has returned to all countries; but in developing countries, inflation is being turbocharged by its ugly twin – depreciation – as most currencies struggle to compete with a stronger dollar, fuelled by rising interest rates.

So even though international food prices have come down, domestic prices in developing countries are still going up because of depreciation.

People are suffering, with the number of the food insecure tripling in three years to almost 350 million, and the extremely poor growing by more than 70 million in just the first three months of this year.

Families are unable to cope, as 60% of all workers have lower real incomes than before COVID.

And trade is suffering tremendous disruptions. You know that better than me. Airspaces are closing, pipelines are being redrawn, maritime routes are taking the long road.

Geopolitics, not economics, is now in the driving seat of globalization.

This realignment in trade can be rough, can be costly, and it can be messy.

When global supply chains are disrupted, people go hungry, lights go out, medicines arrive in short supply and business fail all over the world. The last three years have made this very clear.

Now, a world of cascading crises means three things.

One, it means systemic vicious cycles – crises that feed off each other.

Inflation is a case in point. Geopolitical instability feeds energy prices. Energy prices feed shipping prices, shipping prices feed food prices. According to UNCTAD, at least 50% of recent food prices is due to shipping costs alone.

Food prices increase inflation again, inflation raises interest rates, interest rates feed a stronger dollar, a stronger dollar makes imports and debts more expensive in developing countries, debt distress leads to social instability, social instability feeds geopolitical instability, and we’re back to full circle.

This is just one example of the many vicious cycles in the system.

The issue is therefore systemic, and only systemic action can solve it. There will be no answer to the food crisis without an answer also to the finance crisis, the trade crisis, the geopolitical crisis, or the energy crisis.

Two, cascading crises means cascading inequalities –crises that leave more and more millions of people behind.

Since 2020, almost all gaps we monitor – gender gaps, climate readiness gaps, digital access gaps, formal-informal gaps, employment protection gaps, development finance gaps – have increased, especially in those places where the gaps were widest before the crisis hit.

Crises have disproportionate effects – crises are not gender-neutral, poverty-neutral, or country-neutral. 

What this means is that where there is inequality, there is fragility. And that, therefore, where we close gaps, we build resilience. But, since the world is becoming more unequal, it is also becoming more fragile.

And three, finally, cascading crises means cascading instability. I don’t know what the next crisis will be, but I know that it is coming, and I know that we have to be more ready for it. This means action today is more important than action tomorrow.

Dear friends,

These are the rougher seas we face. The question is what we can do about it.

As I have highlighted, trade has an enormous role to play. And especially maritime trade. Despite all the challenges I have mentioned, maritime trade will become more, and not less, important in the years to come.

A case in point is what is happening in natural gas. The sea-borne LNG market has taken off this year, as a way to cope with gas pipeline disruptions. For the first time in history, this year at least half of Europe’s natural gas consumption will be brought by ships. The problem is that there might not be enough LNG to go around – we are already seeing reports of countries in Asia being priced out of LNG spot markets.

According to UNCTAD calculations, the LNG market is missing around 50 billion cubic meters of gas to meet everyone’s demand, about 10% of last year’s total LNG exports. This is why your investments are so important. We need more, and not less, LNG carriers and infrastructure.

I said earlier that trade realignment will be rough, costly, and messy. Well, precisely because of that it will be a huge opportunity for the maritime business. As maritime routes become longer, whole new supply chains are built, new ports join the global trade, we will more and different ships, new ports, more terminals, bunkering stations and new capacities for businesses, crew and dock workers.

Dear friends,

Let me finish with one last plea: please help us get the grain and fertilizers out of Ukraine and Russia.

The Black Sea Grain Initiative, and the agreement for unimpeded access to Russian food and fertilizers, are now proven concepts. We have already surpassed the 4 million metric ton mark of grain and other foodstuffs being shipped out of Ukraine.

But this is only a fraction of what can be done, and what the world needs, for prices to come down to affordable levels for the developing countries, are for the world to have enough fertilizers to feed itself next year.

We need you. The world needs you. The seas are rough. Let’s brave them together.

Thank you.