13 April 2008
analysis
Washington, DC — This is the season for economic reports, and, as usual, the message is mixed. The World Bank and the Food and Agriculture are stressing the structural crisis caused by rising food prices, and propose some new remedies, both immediate and medium-term.
The Economic Commission for Africa (ECA) and the International Monetary Fund (IMF) cite 2007 growth rates of 5.8% for Africa and 6.5% for sub-Saharan Africa, respectively. Both note, nevertheless, that few African countries are on track to halve poverty by 2015.
The IMF predictably proposes a private-sector emphasis in response, while the ECA lays out a wider range of actions.
This AfricaFocus Bulletin contains a press release from the World Bank on the food price surge and the Bank's response, excerpts from a speech by World Bank President Robert Zoellick, and a report on new Food and Agriculture Organization proposals for changes in food security operations and planning.
Another AfricaFocus Bulletin sent out today includes excerpts from reports on Africa's economic outlook released by the UN Economic Commission for Africa (UNECA) and the International Monetary Fund (IMF).
For previous AfricaFocus Bulletins on food and agriculture, see http://www.africafocus.org/agexp.php; on economic issues more generally http://www.africafocus.org/econexp.php
For a current roundup of critical views on the "Green Revolution" approach to Africa's food crisis, see Pambazuka News 361 "AGRA - green revolution or philanthro-capitalism?"
(http://www.pambazuka.org/en/issue/361)
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Food Price Surge Could Mean '7 Lost Years' in Poverty Fight, Zoellick Says
WB President Calls for Plan to Fight Hunger
April 11, 2008 - The crisis of surging food prices could mean "seven lost years" in the fight against worldwide poverty, World Bank President Robert B. Zoellick said.
"While many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day," Zoellick said at a press briefing on the eve of the IMF-World Bank Spring Meetings.
To meet this crisis, Zoellick is calling for a "New Deal on Global Food Policy."
For the "immediate crisis," he urged governments to fill the US$500 million food gap identified by the UN's World Food Program.
Under the New Deal, the World Bank will nearly double agricultural lending to Sub-Saharan Africa over the next year to US$800 million to substantially increase crop productivity. In addition, the International Finance Corporation - the World Bank Group's arm for private sector development - will boost its agribusiness investments.
Zoellick is also proposing that sovereign wealth funds around the world allocate US$30 billion - one percent of their US$3 trillion assets - to investments for African "growth, development, and opportunity." At his press briefing Thursday, Zoellick said rising food prices are also contributing to malnutrition, one of the "forgotten" Millennium Development Goals.
"This is not just about meals foregone today or about increasing social unrest. This is about lost learning potential for children and adults in the future, stunted intellectual and physical growth.
Even more, we estimate that the effect of this food crisis on poverty reduction worldwide is in the order of seven lost years. So we need to address this not just as an immediate emergency but also in the medium term for development.
"Meetings such as this are usually about talk. Words can focus attention. They can build momentum. But we can't be satisfied with studies and paper and talk. This is about recognizing a growing emergency, acting, and seizing opportunity, too. The world can do this. We can do this. We can have a New Deal on Global Food Policy."
Zoellick said the poor spend as much as 75 percent of their income on food. "In just two months, rice prices have skyrocketed to near historical levels, rising by around 75 percent globally," he said.
The price of wheat has risen 120 percent over the past year, he added. Over the past three years, food prices overall have risen 83 percent, the World Bank estimates.
"A Challenge of Economic Statecraft"
Robert B. Zoellick
President of The World Bank Group
Center for Global Development, Washington D.C.
April 2, 2008
...
The remarkable difference between this period of financial upheaval and those in the past is the performance of developed and developing countries. ...
Most important, there is something strikingly different about this downswing: China, India, and other rising economic powers are offering alternative poles of growth for the global economy. This is not a "decoupling," because the interconnections of globalization will transmit effects from the developed world's financial problems and slowdown; it represents instead a welcome diversification of the sources of growth. More than half of the growth in global demand for imports is now originating in developing countries, providing export opportunities for both developing and developed economies. ...
There is a challenge of statecraft in times such as these: to recognize the changing landscape, often as events and fate rush by, so as to address pressing needs, while also planting seeds that may become the supportive timbers of the future. ...
Therefore, I will highlight four immediate needs that also offer longer-term opportunities. For each, I will aim for action.
High Food Prices: A New Deal for Global Food Policy
As financial markets have tumbled, food prices have soared. Since 2005, the prices of staples have jumped 80 percent. Last month, the real price of rice hit a 19-year high; the real price of wheat rose to a 28-year high and almost twice the average price of the last 25 years.
The good news for some farmers adds a crushing load to the most vulnerable - children, as young as four or five, forced to flee the safety of their rural communities to fight for food in teeming cities; food riots threatening societal breakdown; mothers deprived of nutrition for healthy babies. The World Bank Group estimates that 33 countries around the world face potential social unrest because of the acute hike in food and energy prices. For these countries, where food comprises from half to three quarters of consumption, there is no margin for survival.
The realities of demography, changing diets, energy prices and biofuels, and climate changes suggest that high -- and volatile -- food prices will be with us for years to come.
We need a New Deal for Global Food Policy. This New Deal should focus not only on hunger and malnutrition, access to food and its supply, but also the interconnections with energy, yields, climate change, investment, the marginalization of women and others, and economic resiliency and growth. Food policy needs to gain the attention of the highest political levels, because no one country or group can meet these interconnected challenges.
We should start by helping those whose needs are immediate. The UN's World Food Program requires at least $500 million of additional food supplies to meet emergency calls. The United States, the European Union, Japan, and other OECD countries must act now to fill this gap - or many more people will suffer and starve.
Skyrocketing food prices have increased attention to the larger challenge of overcoming hunger and malnutrition, the "Forgotten" U.N. Millennium Development Goal (MDG).
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