Tag Archives: crisis

Rich countries launch great land grab to safeguard food supply

Small farmers at risk from industrial-scale deals

Julian Borger, diplomatic editor, The Guardian, Saturday November 22 2008

Rich governments and corporations are triggering alarm for the poor as they buy up the rights to millions of hectares of agricultural land in developing countries in an effort to secure their own long-term food supplies. The head of the UN Food and Agriculture Organisation, Jacques Diouf, has warned that the controversial rise in land deals could create a form of “neo-colonialism”, with poor states producing food for the rich at the expense of their own hungry people. Rising food prices have already set off a second “scramble for Africa”. This week, the South Korean firm Daewoo Logistics announced plans to buy a 99-year lease on a million hectares in Madagascar. Its aim is to grow 5m tonnes of corn a year by 2023, and produce palm oil from a further lease of 120,000 hectares (296,000 acres), relying on a largely South African workforce. Production would be mainly earmarked for South Korea, which wants to lessen dependence on imports. Continue reading
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Open democracy on the financial crisis – the end of American capitalism?

openDemocracy on the global financial crisis of 2007-08:

Saskia Sassen, Globalisation, the state and the democratic deficit” (18 July 2007)

Tony Curzon Price, “The end of gentlemanly capitalism” (13 August 2007)

Robert Wade, “The financial crisis: burst bubble, frayed model” (1 October 2007)

Avinash D Persaud, “The dollar standard: (only the) beginning of the end” (5 December 2007)

Fred Halliday, “Sovereign Wealth Funds: power vs principle” (5 March 2008)

Willem Buiter, “The end of American capitalism (as we knew it)” (17 September 2008)

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Filed under Capital markets, capitalism, finance, Multilateral Institutions

US congressman: “If we don’t pass this bill, we’re going to have martial law in the United States”

By Tom Eley writing at WSS

(3 October 2008)

In the wake of Monday’s vote in the US House of Representatives rejecting the $700 billion bailout package for the American financial industry, prominent voices in the US and international media have responded by denouncing the lower house of Congress and complaining that the American political system is too susceptible to popular opinion and insufficiently obedient to the will of the corporate and political elite.

The yearning for more authoritarian forms of rule was expressed by, among others, Michael Gerson, the former chief speechwriter for George W. Bush. In a column in the Washington Post, he complained, “[I]t is now clear that American political elites have lost the ability to quickly respond to a national challenge by imposing their collective will.” The Times of London, part of Rupert Murdoch’s media empire, was even more blunt, headlining a column, “Congress is the Best Advert for Dictatorship.” Continue reading

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Filed under Capital markets, capitalism, finance, United States

When aid causes crises

Discovered this erudite blog “Law and Development” and a brilliant post titled “Do World Bank and IMF Programs cause crises?”

The conclusion of Axel Drefer and Martin Gassebner  here is a qualified yes.

We examine whether and under which circumstances World Bank projects and IMF programs affect the likelihood of major government crises. Using a sample of more than 90 developing countries over the period 1970-2002, we find that crises are on average more likely as a consequence of Bank and Fund involvement. While the effects of the IMF to some extent depend on the model specification, those of the World Bank are shown to be robust to the choice of control variables and method of estimation. We also find that governments face an increasing risk to enter a crisis when they remain under an arrangement once the economy performs better. The (economic) conditions present when a new arrangement is initiated, however, do not affect the impact of Fund and Bank on the probability of a crisis. Finally, while crisis probability rises when a government turns to the IFIs itself, programs inherited by preceding governments do not affect the probability of a crisis.

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IMF aide says Pakistan might not need new loans

published on Sunday, August 17, 2008

KARACHI, Pakistan: Pakistan does not need to turn to the International Monetary Fund for money in the next 10 months if the government cuts spending and gets other sources of financing to offset its falling reserves, a senior IMF official said.

Mohsin Khan, the IMF director for the Middle East and Central Asia, said Pakistan had not sought IMF loans.

He said Pakistan would not need an IMF loan in the fiscal year to June if the government abolished all fuel subsidies by December as planned, and stopped borrowing from the central bank to pay for its budget deficit.

High oil prices have depleted Pakistan’s foreign exchange reserves to levels worth less than three months of imports, sparking concerns among investors that Pakistan may need to seek loans from the IMF to pay for imports. Continue reading

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Filed under IFIs, Inflation, Pakistan

Food crisis demonstrates the limits of globalization

FOOD CRISIS
Food Is Different
Globalization has made more food available worldwide to more people at lower prices. But the current crisis demonstrates the limits of globalization and that the market for food may not be the same as for other products.

by Bruce Stokes
Globalization’s Pluses and Minuses

The world has become more dependent on imported grain in the past 40 years, but failing global grain stocks make it harder to ease shortages and high prices.
Robert Zoellick, head of the World Bank, warns that the unfolding food crisis could force 100 million people deeper into destitution and set back efforts to reduce world poverty by seven years.

In the midst of this crisis, the immediate humanitarian challenge is to feed the hungry. But the suddenness and breadth of the emergency has raised fundamental questions about the future of agricultural policy that will drive debates in Washington and other world capitals for years to come. The questions being posed about agricultural policies are complex and hard to answer.

Was it a mistake over the past generation to increasingly trust market forces to feed the world? Or are the problems that bedevil farmers today the residue of continued government interference in agricultural markets? Are current food prices a problem or the ultimate solution to future food needs? Does the world food system suffer from too much globalization or not enough?

In the search for answers to these questions, Washington is a Tower of Babel. Partisans of all stripes have seized on the crisis to justify their long-standing ideological positions on agriculture. Free-market proponents support a swift completion of the Doha Round of multilateral trade negotiations, which would cut American and European farm subsidies and allow developing countries to increase their food exports to rich countries. “The solution is to break the Doha Development Agenda impasse in 2008,” Zoellick said in April. Continue reading

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The world food crisis and the capitalist market – Part Three

By Alex Lantier
10 June 2008

This is the last part of a series of articles on the world food crisis also posted here. The original versions of Part one and  Part two can be found here.

The current food crisis reflects not only financial events of recent years, but longer-term policies of world imperialism. Instead of allowing for a planned improvement of infrastructure and farming techniques, globalization on a capitalist basis has resulted in a restriction in many parts of the world of farm production. This has been carried out in order to lessen competition and prevent market gluts from harming the profit interests of the major powers.

One major aspect of imperialist policy was to limit farm production in the so-called “First World” to prevent sudden falls in world prices. In the US, this policy took the form of the federal government’s Conservation Reserve Program, first passed as part of the 1985 Food Security Act.

The program allows farmers to apply for payments of $50 per acre of land on which they do not plant crops. A nationwide limit of 180,000 square kilometers (about 10 percent of US arable land) was imposed on the program, later decreased to 130,000 square kilometers in 2007.

Though the bill was presented as a means of limiting soil erosion due to overplanting of ecologically vulnerable land, much of the fallow land registered under the project was not, in fact, vulnerable to erosion, but rather chosen by farmers on the basis of the price of the crops that could be grown on it. This was in line with the law’s stated objectives, which were “acreage reduction” and the maintenance of “target prices and price-support loans.”

Similar payments to farmers for farmland kept out of cultivation were adopted on a country-by-country basis, after the 1992 reform of Europe’s Common Agricultural Policy. Continue reading

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Filed under capitalism, Food Security, Globalization, Poverty