Iran war could push more than 32 million people into poverty; UN warns developing countries of ‘triple shock’

The United Nations Development Program (UNDP) said the economic impact of Iran’s war could push more than 32 million people into poverty around the world, with developing countries hardest hit.The report, released against a backdrop of uncertainty over a fragile ceasefire, said the world economy was facing a “triple shock” of rising energy prices, food insecurity and slowing economic growth. The report warns that conflict is reversing development gains, with the impact being uneven across regions.Energy prices have soared in the weeks since the U.S.-Israeli air strikes on Tehran, compounded by disruptions to global oil and gas supplies caused by Iran’s closure of the Strait of Hormuz. The impact has also spread to fertilizer supplies and transportation, raising concerns about a growing food crisis in developing countries.The United Nations Development Program outlines three scenarios for the economic impact of war. In a worst-case scenario – weeks of major disruption to oil and gas production, followed by months of rising costs – as many as 32.5 million people could be pushed into poverty. This estimate is based on the World Bank’s upper-middle-income poverty line of $8.30 per person per day.About half of the increase in poverty will be concentrated in the 37 energy-importing countries of the Gulf, Africa, Asia and small island developing countries.The Guardian quoted Alexander De Croo, administrator of the United Nations Development Program and former Belgian Prime Minister, as saying: “Conflicts like this are a setback for development. Even if the war stops, a ceasefire is obviously very popular. But the impact is already there.”“You see the lasting effects, especially in poorer countries, where you push people back into poverty. That’s the most heartbreaking factor. The people who are pushed into poverty tend to be the same people who were once poor, got out of poverty, and are now being pushed back into poverty.”The head of the International Monetary Fund has warned that even if peace is maintained, the “traumatic effects” of the conflict are already causing lasting damage to the global economy.The United Nations Development Program has called for a global response to support the countries hardest hit. It recommends targeted temporary cash transfers to protect vulnerable households, estimating that about $6 billion is needed to offset the impact on people below the poverty line.De Croo said international agencies and development banks could support such measures. “Providing short-term cash transfers to avoid people falling back into poverty has positive economic returns,” he said. He added that temporary subsidies or electricity or gas vouchers could also help, but the report warned against blanket subsidies as they would benefit wealthier households but would be difficult to sustain.UNDP said that while wealthier countries are better able to cope with the impacts, developing countries face greater challenges due to limited financial resources and existing economic pressures. The report also noted that Western governments including the United States, Germany, France and the United Kingdom have cut aid spending in response to rising debt and increased defense spending.