Tuesday, December 17, 2019

Nine Billion Hungry People

Reprise: It's funny and it's irritating looking at the online financial news reports.

Each day for the past few weeks news reports have been coming out advising

- Stocks rally after crash

- Stocks pull back sharply after rally

- Stocks edge lower in choppy trading

All of which is fine and dandy except that the reports are posted throughout the day and yet read as though they sum up the day's trading.

But in the fast-changing trading of the past few weeks, with stocks going up and down and up again, and down again on any given day, it's not uncommon to see Yahoo Finance or Bloomberg carrying a list of news headlines with one talking about stocks going down, and another right below it talking about stocks going up.

So it's funny to see classic headlines in bald contradiction of one another, but it's irritating brushing them aside while looking for something of substance to read.

One thing I have learned being here in England over the past several months is that some people in the U.S. seem to have absolutely no idea that the economic fallout of the credit drought has been just as great here in Europe as it is in the States.

The United States has an area 39 times that of the United Kingdom and a population 5 times greater. So I can see that there is plenty to keep people entertained or worried or informed about in the U.S. without them wondering what is happening in other parts of the world. But it makes me wonder when I hear friends in the U.S. ask whether Britain has been affected by the economic situation.

Well yes, Britain and the people of Britain have been affected.

Three of Britain's failed lending institutions have been nationalized. A clutch of high street names have disappeared. And one of its savings banks having its assets in Icelandic banks - which have defaulted - has defaulted in turn leaving some people stripped of everything.

And I have to say that I have the same blindness with regard to many parts of the world. For example, what is the current situation in poor parts of the world as a result of the volatility of food prices? There were headline news reports a few months ago warning that the rises in fuel prices were leading to a widespread risk of famine in the developing world.

I remember thinking at the time that if the recession turned into a depression, and if that became a worldwide depression on the scale of the Great Depression, then oddly enough it might be the poorer countries that could withstand it better because their infrastructure was not so tightly bound as in First World countries.

I could see s situation where people in developed countries would not be able to feed themselves if the supply chain broke down.  I could see sewage and water systems breaking down in developed countries and with nowhere for the people to go.

Whereas in poor countries where people are living subsistence lives, they might well be able to carry on.

Or maybe not. This report from Oxfam details the current risks to people in Africa as a result of the volatility in food prices.

Oxfam: global food crisis will worsen - 1bn hungry people need help now
Urgent action is needed to prevent hundreds of millions more people slipping into hunger as a result of volatile food prices and increasing energy and water scarcity, said international agency Oxfam today. Decades of underinvestment in agriculture coupled with the increasing threat of climate change mean that despite recent price falls, future food security is by no means guaranteed, and in fact the situation could get worse, said Oxfam on the opening day of a UN conference in Madrid to address the issue.

Oxfam’s warning comes on the day that two new reports are published, detailing the threats to global food security and exposing the lack of adequate coordinated international action to tackle hunger.

The reports, 'A Billion Hungry People and The Feeding of the Nine Billion' are published by Oxfam and the UK think tank, Chatham House respectively, and together are a call to action to politicians, and representatives from the private sector and civil society meeting to discuss the implementation of the UN Taskforce’s response.

Although global food prices have fallen in the last few months, they are not back to previous levels, and are likely to rise sharply again in the future.   Furthermore, price volatility itself is a problem, and more needs to be done to address the underlying structural issue that cause the chronic hunger affecting 1 in 6 people in the world today, says Oxfam.

Barbara Stocking, Oxfam Chief Executive, said: “This should be a wake-up call for all those who believe that the food crisis is over. World leaders have a window of opportunity to prevent a worse situation resulting from the triple crunch of the economic crisis, climate change, and energy and water scarcity. They must act urgently to turn their plans into coordinated action that addresses immediate needs and begins to implement long-term reforms. Failure to act will see millions more people falling into hunger.”

Oxfam said current severe food shortages in Afghanistan, Ethiopia, Kenya, Mozambique and Zimbabwe are evidence that the global food crisis is far from over (see annex). Even before recent price rises, there were over 850m people classified as undernourished. Now, there are nearly a billion, as a result of the price rises, alongside other factors such as political instability and conflict.

“Not enough has been done to tackle the situation. There is a lack of coordination at all levels and the opportunity for root and branch reform of the aid system has not yet been taken. International institutions and donors must reverse decades of under-investment in agriculture and scrap blatantly distortionary polices such as biofuels mandates that make things worse,” said Stocking.

“The recent decision by the EU to reinstate export subsidies for dairy is the direct opposite of what’s needed: a retrograde step that calls into question their commitment to longer term reforms,” she added.

The Feeding of the Nine Billion, published by Chatham House and part-funded by Oxfam, predicts demand for food will increase as the world’s population grows by 2.5bn to 9.2bn by 2050. It also notes a UN prediction that climate change will increase the number of undernourished people worldwide by between 40m and 170m.

Meanwhile, Oxfam’s A Billion Hungry People includes recommendations for reform of the humanitarian aid system and makes a strident call to poor countries to do their bit by investing more in agriculture, targeting women and small-scale producers. Developing countries must increase social protection measures for vulnerable populations - including cash payments and employment creation schemes for those at risk of hunger. Rich countries must ensure long-term predictable funding to developing countries for investment in agriculture and climate change adaptation.

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