Uncommon Sense: Understanding Today’s Global Hunger Crisis

Dr. Christopher Dunford, President, Freedom from Hunger writes:

As leader of a global organization that strives to eliminate hunger, I want to put the food crisis in perspective and observe how a number of disparate but ultimately interrelated factors combined to create the crisis. Similarly, no single intervention will solve this global dilemma. At Freedom from Hunger, we put tools into the hands of chronically hungry poor people so that they can prevail against such upheavals.

A Growing World Population Demands More

I was an undergraduate at Cornell in 1968 when I first encountered Paul Ehrlich. He had just authored The Population Bomb and was touring campuses to promote his book and his prediction that the 1970s would see hundreds of millions of people die of starvation. Then the Green Revolution started to kick in, and growth of world food supplies soon outstripped population growth and drove down food prices for three decades.

As I was training to be an ecologist, I knew Ehrlich was applying sound principles of population ecology in his doomsday forecast. I was also studying sociology and anthropology and suspected Ehrlich was not appreciating the confounding effects of human adaptability, foresight, and ingenuity. But I took no satisfaction as Ehrlich’s prediction proved wrong.

Getting governance right

 —Dani Rodrik

Too much focus on broad issues, such as rule of law and accountability, runs the risk that policymakers will end up tilting at windmills while overlooking the particular governance challenges most closely linked to economic growth

Economists used to tell governments to fix their policies. Now they tell them to fix their institutions. Their new reform agenda covers a long list of objectives, including reducing corruption, improving the rule of law, increasing the accountability and effectiveness of public institutions, and enhancing the access and voice of citizens. Real and sustainable change is supposedly possible only by transforming the “rules of the game” — the manner in which governments operate and relate to the private sector.

Good governance is, of course, essential insofar as it provides households with greater clarity and investors with greater assurance that they can secure a return on their efforts. Placing emphasis on governance also has the apparent virtue of helping to shift the focus of reform toward inherently desirable objectives. Traditional recommendations like free trade, competitive exchange rates, and sound fiscal policy are worthwhile only to the extent that they achieve other desirable objectives, such as faster economic growth, lower poverty, and improved equity.

Global crisis & Marx

By Simon Caulkin

TO piece together the fragments of today’s worldwide crisis is to grapple with a sense of deja vu. The sweep of globalisation; strident inequalities (the Financial Times recently ran a breathless piece about the Bond-style security mechanisms built into the luxury homes of the international superclass — alongside stories of food riots); vast intervention by central banks to prop up the banking system; the origin of the crisis in the explosive mixture of masters and leftovers of the universe — what does all this remind you of?

It takes a reading of Francis Wheen’s concise and lucid Marx’s Das Kapital — a biography (Atlantic) for the penny to drop. The cantankerous ghost hovering over the global turmoil and glorying in the discomfiture of its chief agents is that of London’s Highgate Cemetery’s most eminent denizen and the UK’s great revolutionary.

The sense of the grinding of the gears of history, the shifting of the political and economic plates, comes straight from Karl Marx (although some might also want to add an element of Groucho). When the governor of the Bank of England talks of protecting people from the banks, and plaintively recommends that graduates should consider a career in industry as well as the City of London (financial sector), shimmering eerily through his remarks is the Gothic vision of alienation and auto-destruction that Marx outlined 150 years ago.

PAKISTAN: Literacy ratio still at 50 percent

“Literacy ratio in Pakistan still remains at 50 percent, mainly because of small budgetary allocations, lack of political will and delays in disbursement of funds, according to Unesco. In the region, Pakistan has been ranked higher only than Nepal and Bangladesh, which have literacy rates of 49 and 43 percent, respectively. Other countries have far better ratios: the Maldives, 96 percent; Sri Lanka, 91 percent; and India, 61 percent.

Sindh has the highest percentage in education which stands at 54 percent followed by Punjab (52 percent) and the NWFP (40 percent). Balochistan has the lowest ratio — 33 percent. Unesco attributed the low level of literacy rate to factors like weak organizational infrastructure, low professional capacity, lack of research, non-availability of proper training institutes, low public awareness and lack of evaluation and monitoring system.”

Source: muslimnews.co.uk – full story here

Food crisis pushes 100 million into poverty

Wed Apr 30, 2008 2:49 am (PDT)
WASHINGTON, April 29: The World Bank chief warned on Tuesday that 100 million people have already been pushed into poverty due to a man-made food crisis while as many as two billion are on the verge of disaster.

“This is not a natural disaster,” said Robert B. Zoellick, president of the World Bank. “Make no mistake; there is nothing natural about this. But for millions of people it is a disaster.”

He noted that hunger and malnutrition were already the underlying causes of death of over 3.5 million children every year, robbing the future potential of many millions more.

In Washington, a US government commission is investigating claims that big investors who buy large quantities for future trading are largely responsible for the current unprecedented hike in food prices across the world.

The use of corn and soyabean as bio-fuel also contributed to this crisis by moving farmers away from food to cash crops and by driving food prices beyond the reach of common people.

After an annual meeting in Washington earlier this month, the bank warned that the world is facing an unprecedented food crisis which may cause riots and wars if not checked.

“The next few weeks are critical for addressing the food crisis,” said Mr Zoellick on Tuesday. “For 2 billion people, high food prices are now a matter of daily struggle, sacrifice and for too many, even survival.”

Mr Zoellick, who issued the statement after attending a meeting of the UN System Chief Executives Board for Coordination in Berne, Switzerland, said the bank believes that already some 100 million people may have been pushed into poverty as a result of high prices over the last 2 years.

For the immediate crisis, the bank urged governments to fill the $500 million food gap identified by the UN World Food Programme.

The bank also launched an emergency management programme called the “new deal,” pledging to nearly double agricultural lending to Sub-Saharan Africa over the next year to $800 million to substantially increase crop productivity.

“Donors must act now to support the WFP´s call for some $755 million to meet emergency needs,” said Mr Zoellick.

He also warned donors to fulfil their pledges, noting that roughly $475 million have so far been pledged. “But pledges won´t feed hungry mouths,” he said. “Donors must put their money on the table, and give WFP maximum flexibility – with a minimum of earmarking – to target the most urgent needs.”

Mr Zoellick said that the proposed `new deal´ must embrace a short-, medium- and long-term response: support for safety nets such as school feeding, food for work, and conditional cash transfer programmes.

He also called for increased agricultural production; a better understanding of the impact of bio-fuels and action on the trade front to reduce “distorting subsidies,” and trade barriers.

“We are urging countries not to use export bans. These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves,” he said.

The international community, Mr Zoellick added needs to commit to working together to respond with policy initiatives, “so that this year´s crisis doesn´t become a generation´s fact of life.”

SRI LANKA: On track to eliminate malaria

“Sri Lanka, once among Asia’s worst affected nations for malaria, is now close to eliminating it. The sharp drop in the number of reported cases to 196 in 2007 — with no deaths — demonstrates that the national malaria control program has been effective even in the traditionally disease-prone northern districts.

About four million people, a fifth of the population, dispersed over the largely rural dry zone are still vulnerable and could serve as a reservoir for the malaria parasite. The Health Ministry is seeking an estimated $40 million in donor aid and government counterpart funds to cover a five-year elimination program in seven of the island’s nine provinces. While overseas aid has helped bridge the shortfall in government expenditure, the low rate of malaria incidence threatens to undermine foreign financing.”

Source: AlertNet

WHY DID FINANCIAL GLOBALIZATION DISAPPOINT?

Dani Rodrik and Arvind Subramanian writing here eloquently for the free movement of global capital..

In the wake of the sub-prime financial crisis, the claims that recent financial engineering has generated large gains are sounding less plausible, and it is becoming clear that domestic finance will come under closer scrutiny. On the international front, even leaving financial crises aside, it seems increasingly clear that the benefits of financial globalization are hard to find. Financial globalization has not generated increased investment or higher growth in emerging markets. Countries that have grown most rapidly have been those that rely less on capital inflows. Financial globalization has not led to better smoothing of consumption or reduced volatility. If you want to make an evidence-based case for financial globalization today, you are forced to resort to fairly indirect, speculative, and, in our view, ultimately unpersuasive, arguments.

It is time for a new paradigm on financial globalization, and one that recognizes that more is not necessarily better. As long as the world economy remains politically divided among different sovereign and regulatory authorities, global finance is condemned to suffer from deformations far worse than those of domestic finance. Depending on context and country, the appropriate role of policy will be as often to stem the tide of capital flows as to encourage them. Policymakers who view their challenges exclusively from the latter perspective will get it badly wrong.

Pakistan: “Food-led” inflation?

An editorial from today’s Daily Times –

“The Federal Bureau of Statistics says that “food inflation” surged over 20 percent due to high prices of food and increase in domestic oil prices during March of the current fiscal year as compared with the corresponding period last year. The consumer price index (CPI) therefore has gone up by 14.12 percent, the highest in a decade during the month under review. On top of this, the wheat crop estimates have been drawn down from 24 million tons to 22 million tons, threatening to further push up “food-led” inflation in the country”.

The word “food-led” is misleading and might encourage the “economics of antagonism” which is unfortunately issuing from the finance ministry under Ishaq Dar, blaming the Shaukat Aziz government for the inflation. The fact is that food has actually become more expensive all over the world. The global increase has been of the order of 40 percent in one year. Added together with global oil and edible oil prices, the phenomenon is more “foreign-led” food inflation than just food-led. The Shaukat Aziz government has been punished by the 2008 elections. It is time to move on. Don’t forget that in 1999, too, the economy under Nawaz Sharif was “belly-up” and had to be rescued by Mr Aziz. *

Vandana Shiva on Farmer Suicides…

Vandana Shiva on Farmer Suicides, the U.S.-India Nuclear Deal, Wal-Mart in India and More

We speak with world-renowned environmental leader and thinker, Vandana Shiva. A physicist and ecologist, Shiva is author of many books, her latest is “Earth Democracy: Justice, Sustainability, and Peace.” [includes rush transcript]

In India, more than three hundred farmers climbed water tanks in the country’s central Vidarbha region, many of them threatening to commit suicide unless the government fulfilled their demands to lift them out of poverty. Throughout India, more and more troubled farmers are killing themselves. Up to three farmers a day swallow pesticides, hang themselves from trees, drown themselves in rivers, set themselves on fire or jump down wells. Many of them are plagued by debt, poor crops and hopelessness.

• Vandana Shiva, world-renowned environmental leader and thinker. She is also a physicist and ecologist and the Director of the Research Foundation on Science, Technology, and Ecology. She is the founder of Navdanya–“nine seeds”, a movement promoting diversity and use of native seeds. Dr. Shiva was the 1993 recipient of the Alternative Nobel Peace Prize–the Right Livelihood Award. And she is the author of many books, her latest is “Earth Democracy: Justice, Sustainability, and Peace.”

AMY GOODMAN: Vandana Shiva remains with us, physicist; ecologist; director of the Research Foundation on Science, Technology, and Ecology; in ‘93, awarded the Alternative Nobel Peace Prize, the Right Livelihood Award; her latest book, Earth Democracy: Justice, Sustainability, and Peace. There is an epidemic you write about in India of farmer suicides. Can you explain what’s happening and where this is happening?

VANDANA SHIVA: Indian farmers have never committed suicide on a large scale. It’s something totally new. It’s linked to the last decade of globalization, trade liberalization under a corporate-driven economy. The seed sector was liberalized to allow corporations like Cargill and Monsanto to sell unregulated, untested seed. They began with hybrids, which can’t be saved, and moved on to genetically engineered Bt cotton. The cotton belt is where the suicides are taking place on a very, very large scale. It is the suicide belt of India.

And the high cost of seed is linked to high cost of chemicals, because these seeds need chemicals. In addition, these costly seeds need to be bought every year, because their very design is to make seeds nonrenewable, seed that isn’t renewable by its very nature, but whether it’s through patenting systems, intellectual property rights or technologically through hybridization, nonrenewable seed is being sold to farmers so they must buy every year.

New figures cast shadow over Bank poverty reduction claims

Preliminary recalculations of global economic output excluding differences in domestic prices and currencies, released by the World Bank in mid-December, may undermine the much-trumpeted claims that globalisation has reduced the number of people living in extreme poverty.

The aim of the World Bank-led International Comparison Program (ICP) is to provide more accurate comparative data on economic growth based on the analysis of purchasing power. Measuring the economies of India or Mexico in US dollars at market exchange rates will seriously underestimate their ‘value’. To capture this difference, price surveys of a broadly equivalent bundle of goods and services are carried out in each country to calculate the real purchasing power of a unit of currency. This is then used to calculate a purchasing power parity (PPP) exchange rate in order to convert the economic output in each currency into a common measure (US dollars).

The first such survey was conducted in 1970, and the last major one in 1993. The recalculations released in December are based on numbers gathered in 2005. The Chinese government declined to participate in any of the surveys until 2005. The government of India participated in 1985, but declined to participate subsequently until 2005. As a result, past figures for the all-important Chinese and Indian economies had a large element of guesswork, muddying the global picture.

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