The Impact of the Russian-Ukraine War on Food Security and Market Volatility in Muslim Countries

The Russian-Ukraine conflict has had significant repercussions on food security and market volatility in Muslim countries. This research presents two novel models that investigate the multifaceted factors influencing food security and market volatility in 2022. The first model utilizes the food security index as the dependent variable and considers four independent variables, including conflict proximity, political status (UN voting's), and whether the country is a food or oil exporter, along with four control variables, including GDP, GGD, food inflation, and population. The results reveal a significant negative impact of oil exporter status and a positive effect of GDP on food security, contradicting prior studies. Interestingly, the findings diverge from previous research by showing a negative relationship between oil-exporting status and food security index. Additionally, the study finds no significant correlation between food security index and UN voting's, proximity to conflict, or country's status as a food exporter. The second model examines market volatility in 21 Muslim countries during the conflict, revealing an ARCH effect in nine countries, with the coefficient GARCH being significant in six volatile countries, four of which are oil producers. This underscores the need for innovative Shariah-compliant financial products and risk management strategies to safeguard against volatile market conditions. The findings of this research have important implications for policymakers and stakeholders, providing valuable guidance for promoting stability and mitigating the impact of conflict in Muslim countries.