Press Conference by Secretary-General António Guterres at United Nations Headquarters

Following is the transcript of UN Secretary-General António Guterres’ press conference with Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), to launch of the Global Crisis Response Group brief on energy, in New York today:

Secretary-General:  Good afternoon.  It’s a pleasure to join you today to launch the third brief of the Global Crisis Response Group (GCRG) on Food, Energy and Finance.  And this is the report.  And I want to thanks to GCRG Task Team coordinated by Rebeca Grynspan, and the Energy Workstream for making this report possible.  The war in Ukraine continues to have a devastating impact on the people of that country.  Civilians are dying in the most tragic circumstances every day.  Millions of lives have been destroyed or put on hold.  This war is senseless, and we must all do everything in our power to bring it to an end through a negotiated solution in line with the UN Charter and international law.

We are doing all we can to reduce suffering and save lives in Ukraine and the region, through our humanitarian operations.  And Martin Griffiths will be able to soon brief you on those developments.  But the war is also having a huge and multi-dimensional impact far beyond Ukraine, through a threefold crisis of access to food, energy and finance.  Household budgets everywhere are feeling the pinch from high food, transport and energy prices, fuelled by climate breakdown and war.  This threatens a starvation crisis for the poorest households, and severe cutbacks for those on average incomes.  Many developing countries are drowning in debt, without access to finance, and struggling to recover from the COVID-19 pandemic and could go over the brink.

We are already seeing the warning signs of a wave of economic, social and political upheaval that would leave no country untouched.  That is the reason why I set up the Global Crisis Response Group:  to find coordinated global solutions to this triple crisis, recognizing its three elements — food, energy and finance — that are deeply interconnected.  The GCRG has presented detailed recommendations on food and finance.  I believe we are making some progress, namely on food.

Today’s report looks at the energy crisis, with a wide array of recommendations.  Simply put, it aims to achieve the energy equivalent of the Black Sea Grain Initiative, by managing this energy crisis while safeguarding the Paris Agreement and our climate goals.  I would like to highlight four of the recommendations of the report.

First, it is immoral for oil and gas companies to be making record profits from this energy crisis on the backs of the poorest people and communities and at a massive cost to the climate.  The combined profits of the largest energy companies in the first quarter of this year are close to $100 billion.  I urge all governments to tax these excessive profits and use the funds to support the most vulnerable people through these difficult times.  And I urge people everywhere to send a clear message to the fossil fuel industry and their financiers that this grotesque greed is punishing the poorest and most vulnerable people, while destroying our only common home, the planet.

Second, all countries — and especially developed countries — must manage energy demand.  Conserving energy, promoting public transport and nature-based solutions are essential components of that.

Third, we need to accelerate the transition to renewables, which in most cases are cheaper than fossil fuels.  Earlier this year, I outlined a five-point plan to spark the renewables revolution.  Storage technologies including batteries should become public goods.  Governments must scale up and diversify supply chains for raw materials and renewable energy technologies.  They should eliminate red tape around the energy transition, and shift fossil fuel subsidies to support vulnerable households and boost renewable energy investments.  Governments must support the people, communities and sectors most affected, with social protection schemes and alternative jobs and livelihoods.

Fourth, private and multilateral finance for the green energy transition must be scaled up.  Renewable energy investments need to increase by factor of seven to meet the net-zero goal, according to the International Energy Agency (IAEA).  Multilateral development banks need to take more risks, help countries set up the right regulatory frameworks and modernize their power grids, and mobilize private finance at scale.  I urge shareholders in those banks to exercise their rights and make sure they are fit for purpose.

Today’s report expands on these ideas, and Rebeca Grynspan will elaborate on them in a moment.  Every country is part of this energy crisis, and all countries are paying attention to what others are doing.  There is no place for hypocrisy.  Developing countries don’t lack reasons to invest in renewables.  Many of them are living with the severe impacts of the climate crisis, including storms, wildfires, floods and droughts.  What they lack are concrete, workable options.

Meanwhile, developed countries are urging them to invest in renewables, without providing enough social, technical or financial support.  And some of those same developed countries are introducing universal subsidies at gas stations, while others are reopening coal plants.  It is difficult to justify such steps even on a temporary basis.  If they are pursued, such policies must be strictly time-bound and targeted, to ease the burden on the energy-poor and the most vulnerable, during the fastest possible transition to renewables.  Thank you.

UNCTAD Secretary-General Rebeca Grynspan:  Thank you very much, Secretary-General, for your strong message and leadership and for accompanying us once more today.  Good morning, everyone.  Let me thank you first the task team on energy, part of three streams that have been working in these briefs and I want to thank Damilola Ogunbuyi and Rachel Kyte and all the principals of the task team for their very good work while we are at a defining moment for energy politics and energy policy.

In the brief, we centre our attention on people’s pain, but we also sympathize with Governments and policymakers, who are now under huge pressure.  Our brief focuses, as the Secretary-General said, on the realistic options in front of us.  But we must be clear about one thing.  Decisions by the countries that consume the most energy have global implications for the rest of the world, and especially for the smallest and poorest countries that have little influence in these markets.  After two years of a pandemic that was marked by extreme inequality, especially in vaccines, the world cannot afford another scramble, these times on fuels.

Before I go into our proposals for energy policy, I want first to say a few things about the situation as a whole — about this interconnected, multi-dimensional, cost-of-living crisis; the worst in a generation.  Since our last press conference at the beginning of June, the situation in terms of commodity prices has improved.

Crude oil is now around $93 per barrel, down from $120 in June.  Wheat prices are down almost 50 per cent from their peak.  Corn and fertilizer prices are almost 25 per cent down from a month ago.  Shipping costs are about 10 per cent lower since June.  Only natural gas has bucked the trend and is still higher than a month ago.  These are positive developments, as falling prices are key to breaking the vicious cycle of rising costs, rising inflation, rising interest rates, and rising poverty.

There are many factors behind these price falls.  Let me mention first the Black Sea Grain Initiative, which brought down wheat prices by 6 per cent the day it was signed.  Since then, we saw the first ship leave the port of Odesa.  And today we can say prices are lower than before the deal.  Falling prices are good news but the efforts to improve the humanitarian situation are only starting.  Prices have already been too high for too long.  Since June, when we last met, forecasts for extreme poverty and food insecurity have risen by 71 million, and 47 million, respectively.

And we are also worried about the finance dimension of the crisis.  Since inflation was rising in all regions of the world, and especially in developing countries, interest rates rise, and debts as the Secretary‑General said, are becoming much more expensive to pay.  Bond spreads in developing countries are increasing by about 15 per cent since June.  The International Monetary Fund (IMF) now says that not only are 60 per cent of low-income countries debts in or near debt distress, but also 30 per cent of middle-income country debts or near debt distress.  Also, about $40 billion have left emerging market funds since the beginning of the year.  And global South currencies have also depreciated against the dollar, by about 5 per cent since we last met.

As a result, imports in developing countries are becoming more expensive and domestic prices are increasing even as international prices fall.  This is another sign of the interconnected nature of this crisis, of the vicious cycles we need to break.  And this is proof, again, of the messages we have been giving in this Global Crisis Response Group since the beginning.  Let me now go very quickly into the energy policy recommendations of our Brief.  These are our four key messages.

First, in the short-term, the best fuel we have is the fuel we save.  On the demand side, the focus should be on reducing consumption in developed countries.  This will help bring down the energy demand and allow to build reserves for winter.  The decision of the European Commission last week to regulate gas consumption is a step in this direction, and we welcome it.  In the brief we propose options in this direction for transport, heating, and cooling.

On the supply side, we can save almost 150 billion cubic metres of gas by reducing energy waste, such as gas flaring and methane leaks.  This is close to 2,000 terawatt hours of energy per year, almost two thirds of the European Union’s yearly net domestic electricity generation.

Second, in developing countries, we need to make sure energy poverty does not increase and that the burden of this crisis is shared fairly and progressively.  Already one tenth of humanity has no electricity, and about a fourth has no access to clean cooking; disproportionally, women and girls.  Governments must target vulnerable households with publicly funded cash transfers and rebates through social protection policies.  Governments should explore the most effective ways to fund these programmes, including through windfall taxes on the largest oil and gas companies, whose combined profits as the Secretary‑General has already emphasized on the first quarter of the year were already close to $100 billion.

A word of warning:  countries are paying attention to what others are doing.  We’ve seen developed countries setting in place blanket subsidies are their own gas stations and reopening coal plants.  There are many proposed measures in the brief to avoid this, to not compromise the long‑term and sustainable goals through short-term measures.

Third, in the medium term, countries need to double down and recommit to renewable energy goals.  But, developing countries need to be empowered to be able to transition.  It is true that renewable energy is often the cheapest and most quickly deployable source of electricity for many countries.  But, this is only true if we ensure that supply chains work well and without bottlenecks, that the workforce has the right skills, and that enough funds will be made available for the initial investments.  To meet these conditions, we have to scale up financing and technology transfer for the developing countries and the energy poor of the world.

Fourth and last, the energy transition should not be a luxury to those that can afford it.  According to the International Energy Agency, as stated by the Secretary-General, annual capital spending on clean energy in developing countries needs to be seven times bigger than it is now, to put the world on track to reach net-zero emissions by 2050.  Today, developing countries are spending around $150 billion on clean energy.  They need to spend $1 trillion in investments.  This is why we say governments don’t need reasons to transition as the Secretary General said, they need options.

We propose many policies in this direction.  Meeting the $100 billion pledge from advanced countries.  Ramping up development finance lending, and accelerating the deployment of funds, specially by the multilateral development banks, who also have to support countries to leverage finance from public and private sectors.  Funnelling lending through carbon and sustainable debt markets.  And Government action is needed to increase private sector funding, by improving market transparency, de-risking investments and sharing clear energy transition plans.  On top of what we have been asking for since our first brief for a new emission of special drawing rights, concrete solutions to the debt crisis in the developing countries and galvanizing the coordination of international financial institutions.

In a month, summer will be over, and the world will enter peak energy demand season, which is winter in the Northern Hemisphere.  As the colder months draw near, the pressure governments feel today will get even worse.  The only way to relieve this pressure is by working together.  By avoiding at all costs, a scramble for fuels.  By shielding the vulnerable from energy poverty.  By managing demand in a fair and equitable way.  And by investing and doubling down on the energy transition.  The short term and the long term start at the same time.  And that time is now.  Thank you.

Spokesman:  Thank you very much, Rebeca.  We'll go to your questions.  Sherwin?

Question:  To both Secretaries-General, on behalf of the UN Correspondents Association, thank you very much for this briefing.  And Secretary-General, welcome back from your non-vacation.  You say that this report aims to achieve the energy equivalent of the Black Sea Grain Initiative, do you envisage a greater facilitation role by the UN for what could be an energy initiative?  What might you call that initiative?  And who will be your Türkiye in that instance in terms of the energy revolution that you're seeking?  And you also talk about strictly time bound policies when it comes to the re-opening of these coal plants in some developed countries as a result of the war in Ukraine, but if this is a war that has no ending in sight, how can you expect time-bound policies when there's no time-bound limits on this war?

Secretary-General:  Well, first of all, the solution of the problem is not of the same nature as in relation to the food crisis.  In relation to the food crisis, the war's high speculation because Ukraine production of food was not accessible to the international markets and Russia had banned the exports of food and fertilizers.  And, at the same time, even if there are no sanctions on food and fertilizers, there was a number of obstacles in relation to their exports, and this led to a massive speculation.  And what we did and… we see starting it as the negotiations gained credibility was that the markets started to anticipate that the prices would go down.  And of course, the speculators decided to start to sell before it was too late.  And so, we have witnessed, since the negotiations gained traction, a fall, a significant fall.  And today, we have the prices, as it was said, of most foodstuffs and fertilizers, more or less, at the level before the war.

But, that doesn't mean that bread in the bakery is at the same price before the war, because these are quotations in wholesale markets, some of them related to futures.  There is time between the moment in which prices go down at this level until they come to the consumer, and then there are lots of other factors that are contributing to the rising prices, namely, transportation, insurance, the questions related to supply chain disruptions.  And so, it is good to see food prices going down in the global markets, but there will be a lot of factors that will make it difficult, translate itself into the daily life of people.

What we want to do is exactly the same, is it's not because there is not the same kind of physical constraints, but it is to try to create a dynamic in the markets leading to the anticipation of the understanding that we will come to a situation in which we will have an excess energy in relation to the needs.  And for that, there are two things that are essential:  one is reduce consumption as much as possible, and second is bet on a strong investment in renewable energy.  And at the same time, I believe that, because of all the speculation we are witnessing, to tax the excessive profits of oil and gas companies would give a very strong signal to the markets, and that very strong signal to the markets would help increase investment in renewables and would help, in our belief, help stabilise the markets of energy.  So, what we want is a number of measures that has the same impact in a different way, the same impact, which is to create the conditions for those that were speculating to understand that it's better to start changing course because, if not, in the end, they will lose a lot of money.

Spokesman:  Thank you.

Question:  [Inaudible] about the time-bound…?

Secretary-General:  I mean, if we have an adequate reduction of consumption and if we have a meaningful increase in renewables, I think that, in the very few cases where that can be justified, the time-bound can be very, very limited.

Spokesman:  Edie?

Question:  Thank you very much, Mr. Secretary General.  I was listening to one of the major oil companies defend its profits, saying that oil prices had been very low for a few years, and this is part of the vagaries of the market, that prices go up and down.  How are you planning… you made a very sharp criticism of their profits.  How are you trying… going to try and go about getting support from both the energy industry as it is today and Governments to actually divert to renewable energy and put those excess profits into the needs of the world's poorest?

Secretary-General:  Well, many, not all, but many in the oil and gas industry have, for decades, denied and spent a lot of money in public relations to deny that there was an impact of fossil fuels in climate change.  And obviously, prices go up and down, it is true, but go up and down and largely because of speculation and because of artificial conditions.  And the truth is that we are seeing excessive scandalous profits of the oil and gas industry in a moment in which all of us are losing money.  With the rate of inflation in countries like 7, 8 per cent, all of us are seeing our assets reduced.  All of us are seeing our income reduced, and all of a sudden, we have a group of entities that have strongly contributed to climate change that is benefiting from this situation.  What we are telling is those excessive profits need to be taxed, and the money that is obtained with these taxes should be put at the disposal of those most vulnerable, that are more dramatically impacted exactly by the high prices that are benefiting a very limited number of companies in the world.

Spokesman:  Alan Bulkaty, RIA Novosti.

Question:  Thank you very much, Mr. Secretary General.  I have two very short questions regarding Ukraine.  First, Russia is asking the UN to take part in the investigation of the attack on a prison in Olenivka city in Donetsk region.  When the UN is going to deploy the team to take part in this investigation?  And the second question is regarding the letter from Russian Mission which was submitted two days ago.  They are notifying about… that the Ukrainian armed forces are dispersing anti-personnel mines, so called Lepestok, in Donetsk populated areas, and this might amount to terrorism… terrorism, they say.  What can you tell about this?  How can you react on this? Thank you.

Secretary-General:  First of all, in relation to the most important point, we received a request from the Russian Federation and the request from Ukraine to do an investigation in relation to the events that you have mentioned.  I decided, in line with my own competencies and powers, to launch a fact-finding mission.  I have not the authority to do criminal investigations but to launch a fact-finding mission.  The terms of reference for that fact-finding mission are being prepared at the present moment.  They will be shared with the Governments of the Russian Federation and the Government of Ukraine.  I hope we'll be able to have an agreement on the terms of reference of that mission.  We are, at the same time, looking for competent, independent people that could integrate that fact-finding mission, and we hope to have all the facilities from both sides for access and for the [obtaining] of all data that is necessary to be able to clarify the truth about what has happened.

So, this is a matter that we took very seriously, and we are working hard for that.  The operation has been coordinated by Courtenay [Rattray] because this involves a number of different aspects from the selection of people, from logistics, from diplomatic negotiations.  And as I said, not only we took very seriously that request, but we are, in full, moving ahead.  Now, I have not a knowledge, concrete data, about the second aspect that you referred.  The only thing we always say is that the protection of civilians is a fundamental element in any conflict, and all parties should abstain of actions that put at risk the life of civilians.

Spokesman:  Michelle Nichols?

Question:  Thank you, Secretary-General.  You've talked about taxing the oil and gas companies and using it to look after the most vulnerable people.  Would the UN accept money from the oil and gas industry?  And what's your message to the United States and China at a time of escalating tensions between the world's two biggest Powers?

Secretary-General:  No.  In relation to the first question, what we believe is that we are having excessive profits based on the sacrifice of vulnerable people around the world, and that is the reason why we believe it makes full sense to tax those companies for their excessive profits and to use that money to support the victims of the present situation.  But, your question was more specific.

Question:  Would the United Nations accept money from the oil and gas industry?

Secretary-General:  I can guarantee that the UN Secretariat does not.  Our orientation has been for the Pension Fund to entirely divest from the fossil-fuel system, which started by divesting from coal, and I believe they already reached full divesting from the fossil-fuel industry in general.  And to the agencies, I strongly recommend not to receive any contribution [from] those that we consider have played the most important role in the climate change.

Spokesman:  Pam?

Correspondent:  And…

Secretary-General:  And… sorry?

Question:  The United States…?

Secretary-General:  Our… I think this relates to the recent events.  Our position is very clear.  We abide by General Assembly resolutions, by the One China policy, and that is the orientation that we have in everything we do.

Question:  Thank you, Mr. Secretary-General.  It's Pamela Falk from CBS News.  My question is another piece of the taxation part of your report.  You say that the report is the energy equivalent of the Black Sea Initiative, and this taxation on oil and gas companies is part of it.  We've heard you answer some of the questions, but as a former Prime Minister, you know that Governments increasing any taxation is very unpopular.  To what extent have you contacted any of the big… or will contact any of the big oil and gas producing countries in order to increase that tax?  And then, to the other Secretary-General, if I may, my understanding is you were involved and tasked with the Russian exports of fuel and food in the Black Sea Initiative.  How is that going?  Can you give us any updates?  Thank you, both.

Secretary-General:  Well, first of all, nothing will be more popular than to tax the excessive profits on oil and gas companies and to distribute that money to the most vulnerable families.  So, I don't think there is any problem of popularity in relation to this mission.  There is a problem of lobbying against, and sometimes lobbyists are very powerful, and they have strong influence in the way policies are defined.  And we all know how that thing sometimes happens, and it's probably not very dignifying.  But about popularity, I can guarantee this would be extremely popular.  And I mean, we have been talking naturally to countries, but it's not only the oil producing countries.  I mean, I am talking about the profits of the companies, and the companies that operate in different countries do not necessarily belong to those countries.  I'm talking about the profits of the private operators in relation to this.

Spokesman:  Thank you.  Rebecca?  Rebecca?  Go ahead, Rebecca, yeah.

Correspondent:  She's muted.

Rebeca Grynspan:  Can I support what the Secretary-General is saying, also that I think that it's very widely… sorry.  This is the sun getting to my face.  I'm here in Geneva.  There is wide consensus in the economic field that, when you have windfall profits, you need to tax them while prices are excessively high, not because of cost of production, increases.  And so, the Secretary-General is absolutely right.  This is good economic policy to tax windfall profits, and this case, there is the moral priority that the Secretary-General has put forward precisely to support the most vulnerable households if we have to have targeted protection measures for them that have to be financed.  And this is a very clear and direct source of finance.

With respect to Russia and to the facilitation of trade being food and fertilizers from the Russian Federation, we are working hard, and we are trying to take away the obstacles that they face in terms of finance, of insurance, of shipping and transport.  And some of the clarifications have been already enacted by the US and by the European Union with respect to these sanctions that are in place.  What we need these clarifications so the private sector will understand what are the conditions under which they can make those activities and those commercial endeavours.  So, we are working hard on that, and some clarifications have already been published, and that will help also for us to continue our work.

Spokesman:  At the risk of the SG firing me, I'm going to have to sneak in one last question before we release him.  Edward, please go ahead.

Question:  Hi, Secretary-General.  This is Dezhi Xu with China Central Television.  Just now, when you make your opening remarks, you talked about recommendations that you said it would be equivalent to the Black Sea Grain deal… Initiative.  I'm just wondering, in short term, do you expect your recommendations really had any effect on the energy crisis?  And is there any possibilities for the United Nations to, let's say, just like the Black Sea Grain Initiative, to break a deal with Russia?  Because energy… speaking of the resource of energy, Russia is still a big exporter in the market.  Will you break a deal with Russia to export energy to the European countries that would ease the crisis?  Thank you.

Secretary-General:  I believe the question is global.  I mean, I don't think we can look into the Russian European relationship.  I think the question is global.  It has to do with the availability of the different sources of energy globally.  And for that, I believe the measures that we have announced should lead the markets to stabilization and the reduction of prices, independently of the specificities of the relationship between the Russian Federation and the European Union.

Spokesman:  Thank you.  Sir, we have to let you go, and Rebeca will take some more questions.

Secretary-General:  Thank you very much.

Correspondent:  Back to vacation?

Secretary-General:  I'm going to Japan, to Hiroshima, and then I will visit two countries because of the… this is related to the non-proliferation, I will go to Republic of Korea and to Mongolia, because Mongolia is a country that has had very positive role in getting connection with the DPRK [Democratic People’s Republic of Korea).

Question:  No stops in Taiwan?

Spokesman:  Let's go…

Secretary-General:  No.  Thank you very much.

Spokesman:  Thank you.  Great.  Kristen Saloomey?

Question:  Thank you, Stéphane.  Kristen from Al Jazeera here.  Secretary-General, last time you were here, I believe the main concern regarding food insecurity had to do with distribution, and of course, increasing prices.  Now, obviously, the UN's helped tackle some of that issue.  But, I'm wondering, given the ongoing conflict, reduced fertilizer exports, weather concerns are continuing; we had a situation in Sri Lanka where food production fell way below what they normally do; are you worried that there could be global food shortages in the near future?  And given what happened in Sri Lanka… I was hoping to ask the Secretary-General.  Given what happened in Sri Lanka where there was an attempt to mandate greener farming and that resulted in so much lower food output, are you worried that this message of sticking to the Paris Agreement goals, trying to reach the climate goals, can you… how do you reassure countries that they can do that and still have enough food?  Thanks.

Rebeca Grynspan:  Thank you very much.  It's a very important question.  We think that we can avoid the food shortages if we are able to take the obstacles away from the fertilizer market, and we think that that is possible, and we are working on that.  So, for the moment, we don't have shortfalls of food.  Our worry was that, if the prices of fertilizers continue to go up and the demand of fertilizers will go down, because the problem is that because of the price, the demand of fertilizers was going down dramatically in many parts of the world.  Now prices of fertilizers have eased a little, and we think that we can ease that pressure even more.  If we get back to the demand… the normal demand levels, there is no reason why we have to face shortfalls in the next harvest, but I want to caution, we need to bring prices even farther down for that to happen.  And precisely, the agreement that we reached between the UN and Russia and the agreement on the Black Sea target the fertilizer sector very specifically for that to happen.

Now, with respect to what happened in Sri Lanka — and I want to be very, very clear on that — first of all, it's true that they had a bad policy with respect to fertilizers because you can… you have to make the transition possible.  Like it was said in the food systems fora that… the summit that was held at the beginning of this year, you can do things in the right way or in the wrong way.  You can have the right policies.  Even if you have an important objective, if the implementation of that objective is supporting bad policies, then you will have a problem.  The main problems Sri Lanka came through the financial dimension, not necessarily because they didn't have enough food produced in Sri Lanka, but because they couldn't buy it because they were more dependent on imports.  Sure, if you want to bring production inside the country and increase production inside the country, the combination of policies that Sri Lanka implemented will not be the ones that will be advised by us.

But, it's not because they used more bio-fertilizers and sustainable fertilizers.  It was because there was no training.  There was no support.  There was no finance, and it was done in a way in which many didn't know how to really use the new techniques for doing that.  So, I think that it will be rushing a conclusion to say, oh, we would have to continue to rely on phosphite fertilizers forever.  No, no.  There is a transition going on, but we have to make the transition in the right way and with the right support for farmers and small farmers.  And maybe the… my last point of this is, we need to put more research into it, yes, to scale up production because the production of sustainable fertilizers that don't rely on fossil fuels is still to be reached.  We are not there yet.

Spokesman:  Thank you.  Mario, EFE?

Question:  Thank you.  Mario Villar Sanjurjo, EFE.  In the report, you proposed measures to control the energy demand in the short term, things like limiting [air-conditioning], heat and transportation.  There's a debate in several countries happening right now about plans by Governments to do these kinds of things.  What would you say to the people in the political parties that are opposing these types of measures?

Rebeca Grynspan:  Well, for example, who is going to be really opposed to not putting the air conditioner at 18°C but at 21°C or 22°C? You know?  You know, why should you oppose something like that?  You can be fresh at home.  You can help the world.  You can save fuels.  You can rationalize demand.  I don't know about you, but I have been in too many places where I suffer from home being in a warm country.  So, that doesn't make sense.  Rationalizing demand doesn't have to be controversial.  Why would it be not a reasonable thing to do, for example, with air conditioning — or, for example, having, in the winter, your house too warm if you can be comfortable at reducing 1°C in the temperature?

Those are measures that we all know that make sense, that are rational, and that is about also fostering awareness on the consumers and on people, but also on having the right messaging from the leadership.  Leadership is very important in this moment, and a coordination of policies is very important around the world.  I don't see why this should be controversial.  All the measures that we put in the report are measures that are concrete, that are practical, that can have a very important impact in the short term and that I honestly don't see why should not be embraced by the governments of the world.

Spokesman:  Thank you.  Mr. Abbadi, and then we'll go back to you, Edie.

Question:  Thank you very much…

Spokesman:  If you could take off… Mr. Abbadi, if you could take off your mask when you ask the question because it's hard to hear.  Thank you.

Question:  Thank you very much for this briefing.  The Secretary-General introduced the element of morality in business profit, and it's always a sensitive issue.  There is also the element of fairness.  Who decides what level of profits should be taxed?  And did the Secretary-General have in mind an international tax?

Rebeca Grynspan:  Yes, in this brief, there have been many discussions about international taxation.  That’s a separate discussion.  In this brief, we talk about domestic taxes to support the poor households of the world.  We are not talking about international taxation, but there are other spaces where international taxation has been discussed but not… we haven't discussed that in this brief.  We talk about domestic taxation.  And that… there are different methodologies to calculate windfall profits, yes, because you have comparisons of normal… the behaviour in normal markets.  So, you can have… you can normalize the price given by the market, by the market.  It's not an arbitrary price.  There are methodologies to do that and to calculate the windfall profit.  And this taxation is temporary taxation because, if prices go down again, so, obviously, you… the windfall profit disappears, yes, so, you have to be sensible to that possibility.  But there are methodologies and there are very sound methodologies in the economic profession to do that well.  And it will have to be done at the country level, not at the international level, because the conditions of the market and the windfall profit calculation will be different in each situation.

Spokesman:  Thank you.  Edie?

Question:  Thank you, Ms. Grynspan.  I'd like to go back to what you told Pamela about the Russian agreement with the UN on trying to get their grain and fertilizer to global markets.  Can you tell us whether there have actually been any shipments from Russia as a result of this deal?  Are nego… I realize that this is all commercial, but so is the Black Sea Initiative.  Has the deal with the UN made any significant difference?  Are there ships lined up, ships waiting?  Do they need to be loaded?  Are they waiting for agreements?  Thank you.

Rebeca Grynspan:  Thank you, Edie, for that question.  I cannot give you that information right now but let me address the question because I think it's an important question.  First of all, there were exports of grain and fertilizers coming out from Russia, yes?  But, the cost of transactions of those shipments of grain and fertilizers are very high, and that's why prices are also affected.  Half of the increases in the price of grains comes from increases in transport and logistic costs.  So, precisely, that is the pressure that we want to ease.  It's not that exports were not happening, but they were happening at very high conception costs.  So, that is the first thing to your answer.  The second is that it's true that part of what we want to make happen is more ships coming into the Russian ports for the exports of food and fertilizers because, if those ships come in, then not only the volumes but the cost, as I said, the price will go down.  That is too soon to happen because there are still bottlenecks that we need to remove.  The clarifications that have been already provided by the European Union and by the US will have to go to the private sector that is evaluating the situation as we speak.

Remember, these are not governmental transactions.  These are commercial transactions.  It's not contracts with Governments.  These are contracts of the private sector.  So, what we need to see happening is that the actors in the private sector will evaluate the situation today differently than before the agreement and that there will see conditions to resume the exports of food and fertilizers from the Russian Federation, because there is a lot of what we have described as a chilling effect on the private sector.  So, an important part of the private sector has stopped their dealings in food and fertilizer.  That is what we are talking about with the Russian Federation.  But, there's still a road to be travelled in that sense.

Question:  So, that's the major bottleneck, still getting the private sector to accept that this deal will enable these transactions to occur without the threat of sanctions?

Rebeca Grynspan:  Yes.

Spokesman:  Thank you.  We're going to take two more questions, online.  Joe Klein, are you here? Joe?  Okay.  Iftikhar, Iftikhar Ali, are you on?

Question:  Yes, Steph.  Thank you.  Can you hear me?

Spokesman:  Perfectly, Iftikhar.  Go ahead.

Question:  In your… sorry.  In your opening remarks, you have highlighted the plight of developing countries where domestic prices, according to you, are increasing while the prices are falling on international markets.  Not only that, the developing countries are being hit by impacts of climate change like floods and fires while they are still struggling to overcome the impact of COVID pandemic while struggling to deal with the increasing debt issue.  Apart from the measures that you have outlined, what more can be done to meet this extraordinary situation of the developing countries?  Thank you.

Rebeca Grynspan:  What else can we do?

Spokesman:  Go ahead, Rebeca.

Question:  What more can be done?

Rebeca Grynspan:  What more can be done?  Yes.  Thank you very much for your questions.  Yes.  In fact, domestic prices can go up while international prices go down because there are currency depreciations that are happening in the developing countries, precisely because the interest rates, there are interest rate increases in the developed countries.  And so, there is… there are several things happening.  One is capital slide to the advanced economies that is devaluating the currencies and also because of the strength of the dollar that is devaluating currencies in the developing world, so that's why domestic prices can go up while international prices in dollars go down.  And so, in the national currencies, prices can go up.

What else can be done?  We have been very emphatic that the developing countries need liquidity now.  They need liquidity, because they have a trade deficit going up because of the problems of the prices of food and fertilizers and energy, but also because they need to support their poor and most vulnerable households.  And they don't have fiscal space after the pandemic.  So, liquidity today, not only the issue of solvency, but the issue of liquidity, of capital importance.  And for that, the best tool that the international community has is the special drawing rights, even if they are badly distributed — because they are badly distributed, because most of these special drawing rights go to the advanced economies.  But, the amount that goes for the developing countries is still a very significant amount that can really ease the pain and cushion the blow for the developing world.  So, that is a very important one.

And the second one, obviously, is to extend the DSSI [Debt Service Suspension Initiative] for the non-payment of interest of the low-income countries, but what we are saying is that we want to extend the DSSI, extending also the maturity of the loans, because if not, you will have a snowball in the future.  So, more liquidity immediately and also extending the DSSI for the low‑income countries as a bridge to a restructuring of the debt problem in the future, because right now, we only have three countries that have come into the debt restructuring framework that the G20 agreed to.  Imagine if not only… in two years, we have three countries.  Imagine if we have 60 per cent of the low-income countries and 30 per cent of the middle-income countries coming to a process of debt restructuring.  The framework is not yet fit for purpose.  So, the DSSI can be… with longer maturities can be a good bridge for a more orderly process for debt restructuring for the countries that are on the brink of another debt crisis.

Spokesman:  Great.  Rebeca, thank you very much.  And thank all of you for participating.  Thank you, and have a good eve… a good afternoon, rather.  Thank you.

Rebeca Grynspan:  Thank you very much.

For information media. Not an official record.