1 oz. rising oil and metal prices
1 oz. predicted 5.5 percent growth
2 oz. climbing food prices
1 oz. increasing number of people pushed into poverty
Dash of political instability and slowed progress
On Sunday in the Financial Times, Donald Kaberuka, head of the African Development Bank, said that “rising oil and food prices are combining to create a ‘Molotov cocktail’ for Africa as the continent attempts to push ahead with its recovery from the economic crisis.”
As prices rise and the ranks of the hungry continue to grow, it is only natural that those with empty stomachs start pointing fingers. Who is to blame?
Tom Arnold, CEO of Concern Worldwide, urges stakeholders to work together on the global food crisis — or suffer the consequences.
Last Friday, as part of the Spring Meetings of the World Bank and IMF in Washington, D.C., — I was a panelist in a groundbreaking global conversation, the Open Forum. It was a unique opportunity for a small group of experts to engage not only with each other, but with 3,000 participants in a concurrent 24-hour chat, and people from 91 countries who had submitted comments and ideas online before the event. The topic was the food crisis — crippling market volatility whose net effect has been a sustained increase in food prices, wreaking havoc on the world’s poor.
To prevent high food prices from going higher, experts from the World Bank to the US Department of Agriculture (located only a few blocks away from one another), continue to chant the mantra “free trade policy will solve high prices.” The benefit of refraining from export bans seems to make sense to me since they keep more food on the world markets, thus lowering prices some, although I understand why an exporting government might want one. However, I question some of the experts’ views on whether lowering import tariffs and taxes will protect the world’s poorest.
While much of sub-Saharan Africa seemed to be coping well during the first months of the food crisis in 2010, some countries in East Africa have suffered more recently from poor rains and seen prices rise since the turn of the year.
Prices for maize rose over the past three months by 25 percent in Uganda and Somalia and 27 percent in Kenya, and maize prices in Uganda are double what they were this time last year.
Dry weather in Kenya and Tanzania has drastically reduced the second harvest in some areas, while crumbling roads and fragmented markets mean that food cannot be brought in as quickly or cheaply as needed to make up the deficit.
Laurie Garrett, Global Health Senior Fellow at the Council on Foreign Relations, was featured on the Colbert Report Thursday. She explained to Stephen, who, in addition to being a popular TV show host, is apparently also an excitable food commodities trader, why she thinks that he has been making so much money lately on the rising prices of food commodities: other speculators, biofuels demand (40% of corn!), fires and floods, and the livestock-killing foot and mouth disease.
Stephen asked her to “make a case for humanity,” and she replied, “Maybe you are rich enough, Mr. Colbert to afford everything you need… but high prices are affecting people all around the world.” She noted that high food prices are affecting not just people in developing countries, but consumers here in the U.S. who buy much of their food from multinational food companies, for which corn is a major ingredient of many of their products. In true policy wonk fashion, she also pointed to a recent International Monetary Fund (IMF) report that indicated that the steep rise in wheat prices was indeed a major factor in recent riots the riots in Tunisia, where rioting citizens were initially seen waving baguettes in the air.
To that, Colbert replied, “Well then, shouldn’t people be thanking, me, the speculator, for bringing democracy to countries around the world?” It is an interesting question, and it leads me to ask myself, have we been unconsciously as a society excusing the impacts of high prices because dictatorships have crumbled as a result of them? Or maybe it’s just that we’ve been distracted by the unrest while millions of people have slipped into poverty and hunger due to high food prices. Not to say that the unrest does not deserve some of our attention, but why are we not outraged that 44 million more people now go to bed hungry compared to this time last year? Hunger is easy to forget, but I hope that you, as ONE a member, won’t forget what we can do to help.
Please read more about agriculture and food issues on ONE’s blog.
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