The World Bank plans to nearly double its lending for agriculture in Africa, to to 800 million dollars.
Putting Africa into further debt to produce export crops will just make matters worse, as the World Bank well knows.
Sunday 13 April 2008
Policymakers of the anti-poverty bank are due to discuss a massive, coordinated international plan to reduce hunger announced less than two weeks ago by the head of the bank, Robert Zoellick.
With soaring food prices threatening political stability in poor countries, Zoellick called for a “new deal” for global food policy, similar in scope to a 1930s program under US president Franklin D. Roosevelt that tackled the problems of the Great Depression.
The World Bank meeting comes against a backdrop of a mounting global financial crisis, a US economy teetering on recession, high energy prices and currency market imbalances.
Escalating inflation is complicating policymakers’ efforts to revive stuttering economic growth.
The 185-nation bank’s sister institution, the International Monetary Fund, issued a dire warning Saturday about the food crisis at their spring meetings in Washington.
“Food prices, if they go on like they are doing today … the consequences will be terrible,” IMF managing director Dominque Strauss-Kahn said.
“Hundreds of thousands of people will be starving … (leading) to disruption of the economic environment,” Strauss-Kahn told a news conference at the close of the IMF meeting.
Development gains made in the past five or 10 years could be “totally destroyed,” he said, warning that social unrest could even lead to war.
“As we know, learning from the past, those kind of questions sometimes end in war,” he said. If the world wanted to avoid “these terrible consequences,” then rising prices had to be tackled.
Skyrocketing prices on rice, wheat, corn and other staple foods like milk particularly hurt developing nations, where the bulk of income is spent on the bare necessities for survival.
According to a World Bank policy note released this past week, increases in global wheat prices reached 181 percent over the 36 months leading up to last February, and overall global food prices increased by 83 percent.
Food crop prices are expected to remain high in 2008 and 2009 and then begin to decline, but they are likely to remain well above the 2004 levels through 2015 for most food crops, the document warned.
“The poor are not just facing higher food prices but also higher energy costs, which is a worrying combination,” said Danny Leipziger, a World Bank Group vice president.
In recent months, rising food costs have lead to violent protests in Egypt, Cameroon, Ivory Coast, Mauritania, Ethiopia, Madagascar, the Philippines, Indonesia and other countries in the past month.
Haiti’s prime minister was ousted Saturday in a no-confidence vote after more than a week of violent demonstrations over rocketing food and fuel prices.
In Pakistan and Thailand, army troops have been deployed to avoid the seizure of food from fields and warehouses.
Thirty-seven countries currently face food crises, according to the Food and Agriculture Organization.
Zoellick is urging countries to provide the minimum 500 million dollars immediately sought by the World Food Program in the mounting food crisis.
The World Bank plans to nearly double its lending for agriculture in Africa, to to 800 million dollars.”
Zoellick proposed three other measures to soften the impact of a slowing world economy on the most vulnerable countries: investment in Africa by sovereign wealth funds; strengthening a 2002 initiative to improve governance in resource-rich countries; and conclusion of the World Trade Organization’s trade liberalization negotiations.
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Haiti’s Government Falls After Food Riots
By Joseph Guyler Delva and Jim Loney
Saturday 12 April 2008
Port-au-Prince – Haiti’s government fell on Saturday when senators fired the prime minister after more than a week of riots over food prices, ignoring a plan presented by the president to slash the cost of rice.
Sixteen of 17 senators at a special session voted against Prime Minister Jacques Edouard Alexis, an ally President Rene Preval placed at the head of a coalition cabinet in June 2006 that was meant to unite the fractious Caribbean nation.
The move by opposition senators was seen as a serious but not crushing blow to Preval, whose 2006 election brought a measure of calm to the poorest country in the Americas as it searched for political stability after decades of dictatorship, military rule and economic mayhem.
The clash with senators came after the president of the country of 9 million people – most of whom earn less than $2 a day – managed to persuade rioters to end a week of violence in which at least five people were killed.
Stone-throwing crowds began battling U.N. peacekeepers and Haitian police in the south on April 2, enraged at the soaring cost of rice, beans, cooking oil and other staples.
The unrest spread this week to the capital, Port-au-Prince, bringing the sprawling and chaotic city to a halt as mobs took over the streets, smashing windows, looting shops, setting fire to cars and hurling rocks at motorists.
U.N. troops, stationed in Haiti since Jean-Bertrand Aristide was ousted as president in a revolt in 2004, fired tear gas and rubber bullets on several occasions to disperse protesters.
On Saturday a Nigerian U.N. peacekeeper was shot to death near the main Catholic cathedral in downtown Port-au-Prince, close to the large and often violent slum of Bel-Air, a Haitian police officer and U.N. commander said.
The circumstances of the shooting were unclear and the city appeared largely tranquil. Three Sri Lankan peacekeepers were struck by bullets on Thursday but were not seriously injured.
Many Haitians Welcome Ouster
“Now it’s my turn to play,” Preval said when he was told by journalists of the Senate vote shortly after he and private sector leaders unveiled a plan to cut the cost of a sack of rice to $43 from $51.
Three dollars of the price cut would be paid for by businesses and the rest by international donors, he said.
Preval said he would ask parliament to pick a new prime minister. Alexis was seen as a pragmatist and dealmaker, and also served as prime minister during Preval’s first term as president from 1996 to 2001.
Many Haitians seemed to welcome the ouster of Alexis.
“When he was prime minister, he did nothing to lower the high cost of living. I hope things will change with a new prime minister,” said Jean Pierre Jean-Baptiste, 29, an electrician.
Sen. Youri Latortue, a nephew of a former prime minister and leader of Saturday’s vote, said Alexis had failed to ramp up food production, protect people against crime, heed calls to establish a new national security force and set a deadline for the U.N. troops to leave.
Everyone Has to Make a Sacrifice
Disturbances over high food prices have broken out in several poor countries, primarily in Africa. Record oil prices, rising demand for food in Asia, the use of farmland and crops for biofuels and other factors such as market speculation have pushed up food prices worldwide.
“The situation is difficult everywhere around the world, everyone has to make a sacrifice,” Preval said on Saturday as he announced the plan to cut rice prices in a room adorned with crystal chandeliers and thick drapes at the National Palace.
Preval reiterated that Haiti could not afford to cut taxes on food because it needed the revenue to pay for longer-term projects that create jobs and boost agriculture.
It was unclear whether the price cut would satisfy protesters.
“It has not been lowered enough,” said a young man who identified himself only as Givens. “If they don’t further lower the price I think people are going to protest more. There will be problems, more unrest. Even the National Palace could be set on fire because we are in trouble.”
Additional reporting by Jean Valme; Writing by Michael Christie; Editing by Xavier Briand.
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Focus on World Food Prices, Market Woes
By Harry Dunphy
The Associated Press
Sunday 13 April 2008Global financial crisis, food prices dominate international financial talks.
Finance ministers and central bankers are focusing their spring meetings on ways to deal with the unfolding financial crisis that has roiled economies around the world and led to higher food and energy prices.
Sessions of the International Monetary Fund and World Bank end Sunday with a look by the bank’s policy-setting committee at the effect on developing countries, especially poor ones where the bank is trying to reduce poverty.
“We must respond to the immediate emergency situation,” Robert Zoellick, the bank president, said before the meeting, but in a way that helps developing countries achieve objectives such as improved health care and reduced malnutrition and infant mortality.
The officials are also talking about climate change, investment in Africa and rising food prices.
“In the U.S and Europe over the last year we’ve been focused on the prices of gasoline at the pump,” Zoellick said. “While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs. And it’s getting more and more difficult every day.” The poor already spend up to 75 percent of their income on food in many developing countries, he said.
Zoellick has said that to deal with the immediate crisis, the international community must fill a food shortage valued at a minimum of $500 million by the U.N. World Food Program.
A similar warning was sounded Saturday by the head of the International Monetary Fund, Dominique Strauss-Kahn. He said there would be dire consequences if food prices remain high in developing countries, especially in Africa.
He added that the problem could also create trade imbalances that would hurt advanced economies, “so it is not only a humanitarian question.”
Governments in Haiti, Egypt and the Philippines are among those already facing social unrest because of food prices and shortages. If the price increases continue, Strauss-Kahn said, “Thousands, hundreds of thousands of people will be starving. Children will be suffering from malnutrition, with consequences for all their lives.”
The development group Oxfam, a frequent IMF critic, said rich countries are largely responsible for the food crisis because they have been cutting aid to developing countries and encouraging biofuel production, which the IMF says is responsible for almost half the increase in the demand for food crops.
“Rich countries demand for biofuel is driving up food prices and is a big part of the problem,” said Elizabeth Stuart, an Oxfam policy adviser. “Meanwhile, by cutting aid levels, they are doing precious little to be part of the solution.”
Germany’s development minister urged greater regulation of the global biofuels market to prevent its expansion from driving up food prices. “It is unacceptable for the export of agrofuels to pose a threat to the supply situation of the very people already living in poverty,” Heidemarie Wieczorek-Zeul said in a statement.
Associated Press writer Desmond Butler contributed to this report.