Russia, Saudi Arabia and the United Arab Emirates among main beneficiaries of global price increases
More than a year into the pandemic, the effects of the coronavirus on the economy are beginning to be visible. Energy, mineral and food prices have risen to the benefit of those countries that are the main exporters of these goods. On the other hand, countries that import most of their raw materials are bearing the brunt of the economic recovery, as prices have risen by 20% this year. The cost of oil, an indispensable mineral for virtually all nations, has risen by 50 per cent. The black gold has reached its highest level in ten years and is heading for its fourth consecutive monthly increase.
For this reason, the world's largest oil exporters, such as Saudi Arabia and Russia, will benefit from this price increase due to the COVID-19 pandemic. Other gas-producing countries in the Persian Gulf will also become the year's big economic winners. According to a Bloomberg Economics survey, the United Arab Emirates and Qatar increased their net exports by more than 10 per cent of national GDP.
The gains for commodity exporters outweigh the losses they faced last year as the virus spread, confinements increased and demand for goods declined. Bloomberg Economics estimates that exporters will take in $550 billion in 2021, up from $280 billion last year.
Russia will be one of the biggest gainers. Its exports will reach $120 billion this year. Australia, Saudi Arabia, Brazil and the United Arab Emirates follow the Eurasian giant with more than $50 billion each.
The places that will be most affected by this price increase will be Western Europe and Asia. Japan, like many European countries, will have to spend more on imports of basic goods. Others, such as Vietnam and Bangladesh, will have to cope with high fuel and food prices. China will also see its exports reduced by almost $220 billion.
The United States, on the other hand, will decrease its foreign sales by $22 billion, although this decline will be insignificant when its annual economic output of $21 trillion is taken into account.
The rising price of basic commodities, such as food, was one of the triggers of the Arab Springs that took place 10 years ago. Some of the countries that witnessed these historic protests managed to get rid of their corrupt rulers, but in others, they started wars that continue to this day.
The problem of a decade ago is being repeated in the Middle East and Maghreb region. The cost of bread and meat has risen over the past 13 months, approaching its highest level since 2011, according to UN data.
Seven countries in both zones are among the 10 weakest and most vulnerable countries in the global economic recovery according to a Bloomberg Economics analysis of emerging markets. These include Yemen, Tunisia and Algeria, all of which are at high risk.
Another country with a critical outlook is Lebanon. The economic crisis that has hit the Mediterranean country is considered by the World Bank as one of the three worst financial and political crises in the world since the mid-19th century. The national currency has lost 90 per cent of its value against the dollar in the last 18 months and the national GDP has fallen by 40 per cent in the last three years. Other serious factors include high inflation and shortages of basic commodities.