The Iran War's Devastating Butterfly Effect

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**Rachel Abrams** (0:35)
From The New York Times, I'm Rachel Abrams and this is The Daily. The war in Iran has had some visible consequences like skyrocketing energy costs and higher gas prices. The effects of this war are often far less obvious and much more serious for the world's most vulnerable people. Today, my colleague Peter Goodman tells us about what he learned on a recent trip to Somalia and why the system of global aid is no longer in a position to help. It's Wednesday, June 10th.
Peter Goodman, welcome back to The Daily.

**Peter Goodman** (1:31)
Thanks for having me.

**Rachel Abrams** (1:32)
So Peter, we're now 101 days into the war with Iran, and we have talked a lot on the show about its effect on gas prices. But you cover global supply chains, which means that you've gone all over the world, you've reported on how something gets from point A to point B, and you have focused a lot on all the people who are affected in between.
So for that reason, we wanted to ask you for your take on how the war has disrupted things all over the world in less visible ways.

**Peter Goodman** (2:01)
Well, first of all, the price of energy goes so far beyond putting gas in your car, right? I mean, we've seen cooking fuel get scarce in India, in South America. We've seen the Philippines limit the hours that people can work in office buildings to limit the cost of air conditioning. We've seen helium, which is used by computer chip factories from Taiwan, get expensive and hard to secure. The ripple effects of this are almost infinite.

**Rachel Abrams** (2:29)
Reminds me of the butterfly effect. A butterfly flaps its wings in one place and you see a tidal wave in another.

**Peter Goodman** (2:35)
Right. I mean, this particular butterfly is coming out of the Strait of Hormuz, which is the conduit for something like one fifth of the world's oil supply and something like a third of major forms of fertilizer, which affects how much food that we can grow. And so the consequences of this particular flapping of wings are especially enormous.
In addition to these kind of ripple effects, there are also significant issues of life and death. And that's what I've been focusing on. I've been looking at 60 or so countries that tend to suffer from malnutrition, even in the best of times. And every time there's a shock, we have reason to worry. And now we have a big reason to worry because the price of food and fertilizer is going up very quickly in many parts of the world. And we, in wealthy countries, decided to dismantle large parts of the international humanitarian relief system. This is the safety net that dates all the way back to the end of World War II. And then we, in the United States, and Israel, decided to launch this war.

**Rachel Abrams** (3:46)
The aid cuts that you referred to, the US aid cuts, of course, refer to USAID. We covered this on the show. That was something that happened very early on in the second Trump administration.

**Peter Goodman** (3:55)
Yes. I mean, that's a critically important part of the story, but it's far from the only part. I mean, in addition, major European donors, like the United Kingdom, like Germany, have also pulled back. And this is in part because the Trump administration has pressed European allies to spend more money on their own defense or financing NATO, as opposed to, in the Trump view, just relying on the good graces and largesse of the United States. And so in London, in Berlin, major governments have also cut back significantly on overseas aid, and that has contributed to this picture. So let me give you an example. You know, four years ago, when Russia invaded Ukraine, there were similar fears about a fertilizer crisis and hits to food security, because Russia and Ukraine together produce a lot of grain. They also produce a lot of the peace parts for fertilizers. And so from Egypt to Indonesia, there were worries about the price of bread and grains.