NEW YORK CITY: UN Secretary-General Antonio Guterres said on Thursday he was “deeply concerned” that disruptions linked to tensions around the Strait of Hormuz were inflicting damage that will be felt for years.
Speaking to reporters at the UN headquarters in New York, he said that although a fragile ceasefire is in place as the war with Iran enters its third month, the situation continues to deteriorate.
“The pain will be felt for a long time to come,” he added.
Guterres raised serious concerns about the denial of navigational rights and freedoms in the Strait of Hormuz, a vital global maritime shipping route. He warned that the disruptions were impeding the delivery of oil, gas, fertilizer and other critical commodities, which was affecting the energy, transport, manufacturing and food markets, and “strangling the global economy.”
He added: “As with every conflict, the whole of humanity is paying the price — even if a few are reaping huge profits.”
The UN chief outlined three potential scenarios based on multiple forecasts, emphasizing that even the most optimistic outlook carried significant economic consequences.
In the best-case scenario, in which restrictions on shipping were lifted immediately, he said global supply chains would still take months to recover, global economic growth would decline from 3.4 percent to 3.1 percent this year, and inflation would rise from 3.8 percent to 4.4 percent.
He added that merchandise trade growth would fall sharply, from 4.7 percent last year to about 2 percent, with continuing supply chain disruptions. A world that was still recovering from the effects of the COVID-19 pandemic and the war in Ukraine would face additional economic strain, he noted.
In the second scenario, where the disruptions persist through the middle of the year, Guterres warned that global growth could fall to 2.5 percent and inflation might reach 5.4 percent. About 32 million people would be pushed into poverty, fertilizer shortages would reduce crop yields, and an additional 45 million people could face extreme hunger.
“Hard-won development gains are reversed overnight,” he warned.
In the worst-case scenario, with severe disruptions continuing until the end of the year, Guterres said inflation could surpass 6 percent and global growth could drop to 2 percent. He warned of “immense suffering,” particularly among the most vulnerable populations, and raised the prospect of a global recession with serious economic, political and social consequences.
“These consequences are not cumulative, they are exponential,” he said, stressing that the longer the disruption continues, the more difficult it will be to reverse the damage and the higher the cost to humanity.
Developing countries would be the hardest hit, he warned, as high levels of debt limit their ability to respond, leading to job losses, deeper poverty and increased hunger.
“Every day that ships cannot move escalates these costs and amplifies their reverberations across the global economy,” he said.
Guterres called on all parties to restore navigational rights and freedoms immediately, in line with Security Council Resolution 2817.
“Open the Strait. Let all ships pass. Let the global economy breathe again,” he said, adding that the reopening of the waters alone was not sufficient and that shipping must also be safe, predictable and insurable.
“Now is the time for dialogue, for solutions that pull us back from the brink and for measures that can open a pathway to peace. The world is waiting,” he added.
