May 3, 2008
Food prices, political unrest and Jeff Sachs
I went to a couple of meetings this week where the food crisis was discussed. At Chatham House on Monday John Holmes, the UN’s co-ordinator for emeregency relief, gave a careful and under-stated presentation -which was still alarming in its implications. He told me after the meeting that he thinks that we are still only at the beginning of the food crisis - and that prices and hunger are likely to keep rising for a while yet.
I’ve certainly noticed on my travels that food prices are now a big political issue in almost every country that I visit. I first noticed it on a trip to Pakistan and Bangladesh at the beginning of the year. In both countries, people told me that the biggest source of popular discontent were not the machinations of President Musharraf or the Bangladeshi interim government. It was the fact that the price of staple foods had gone up by as much as 40% over the last year.
You are now hearing similar complaints in richer parts of the world. President Saakashvili of Georgia blames some of the popular discontent aimed at his government on food prices. President Sarkozy of France made the same point in his television interview last week. And now it is the turn of the Labour Party in Britain to speculate over whether their electoral drubbing has something to do with the rising price of food and energy.
More expensive food is irksome and worrrying for people in Britain or France. But - obviously -it can be a matter of life-and-death in poorer parts of the world. Yesterday at the LSE I saw Jeff Sachs in action for the first time. Sachs is Mr Poverty Relief - and he is also a very effective (and unstoppable) public speaker. I have rarely seen an academic who is able to talk fluently for over an hour - without notes - and completely hold the attention of a group of students.
Of course, most of Sachs’s message is highly congenial to the average LSE student: there should be more foreign aid, President Bush is an evil moron, markets will not fix poverty, the war in Iraq was about oil, action on climate change is urgent. But Sachs’s appeal is about more than just his message. His combination of passion, high intelligence, energy and egotism is compelling. He managed inadvertently to make me feel faintly guilty with a long riff about how world-weary cynicism is the soft option. His latest book “Common Wealth” is - by contrast - suffused with optimism that the world can fix everything from global warming to global poverty.
Fortunately, the food crisis is not so severe that it stopped the LSE from giving Prof Sachs dinner after his speech. But the Sachs who shows up for dinner is not really that different from the man who performs on a public platform: passionate, energetic and convinced of his own rectitude.
on world hunger/food prices…This is such an important issue. It is on the G8 agenda this summer, the UN has it a high priority. It needs to be tackled from several fronts and not just meetings for the sake of holding meetings as so often is the political/government response …policies relating to trade, economic, agriculture, technology need to be both developed and reformed…
The biggest threat from global warming,is the risk to world agriculture.
On Sachs…I am a fan and a believer he’s got it right…
Posted by: Lisa-Helene Lawson | May 3rd, 2008 at 3:53 pm | Report this commentI most humbly disagree with Jeff Sachs on 1. ‘markets will not fix poverty,’ and 2. ‘action on climate change is urgent.’
1.Rather the contrary… it is the markets only that are creating affluence in yester poverty stricken societies…
These very markets that he critics are responsible for a new rising middle class of billion plus consumers in the world. We keep talking about a new ‘European sized middle class’ in India but where did it come from, it emerged definitely from free market economy, Nehruvian socialism entrapped India into a poverty trap until Manmohan Singh in 1992 reversed the policies to more incentive based. I will not term it as a ‘Reagan- Thatcher model’ that will be considered as a sin with Jeff Sach.
The poverty trap that Chinese and Indians were firmly ensnarled in could not have been broken without all ships rising simultaneously, as if a hidden hand of ‘providence’ in this age of knowledge has worked miracles, the global prosperity unleashed is quintessentially lifting all boats. Only the regions where tolerance and dankness reigns supreme are missing this blissful rising tide. Poverty is the worst polluter and worst offender of human rights, it devoid mankind of basic human dignity and makes a human an apex of nature’s creation sink down to animal kingdom. We are not witnessing a challenge from absolute poverty but a challenge from rising expectations of new prosperous masses; we are facing ‘Malthusian constraints’ not as a result of geometric progression of population but as a result of too many demanding a middle class consumption rising from the lowest levels of poverty.
Greens may differ and may still hurl stumbling blocks by accusing MNC’s as abusive; however until other more beneficial arrangements are made eradication of mass poverty through free trade will lift fortunes far better. Free trade is removing inequalities and removing causes of mass revolutions.
This is the first time in annals of human history that global pockets of poverty are receiving partial relief through a beneficial economic system. The prospective 2 billion new consumers in the Brics countries are new productive members of the global society.
2. ‘action on climate change is urgent.’
Our world may have the ability to support 12 billion of us but not with the kind of huge carbon footprint of Mr. Al-Gore. If Noble Laureates want to live in huge compounds with what face they can tell a poor Chinese or Indian to cut his consumption, this rising prosperity would find sustainable energy paths through knowledge and research, these were the factors that helped destroy the myths of Malthusian scarcities, these factors and knowledge will once again come to humanities aid, like more fertilizer, genetically modified seeds, and advanced machinery and technology. The exponential nature of our growth patterns have unfortunately always been neglected by liberal intellectuals. It is not darn ‘CO2′ it is shortages of food that will take its toll as those ‘new consumers’ living on miniscule 900 calorie/day so far now demand few thousands. CO2/ per capita is their new demand.
Protectionism by EU and USA is one of the culprit in today’s world of shortages in agri products but much more is the misplaced environmentalism. .54 cent tariff on imported Brazilian ethanol is cheering a ‘bankrupt’ biofuel industry in US to survive.
Vaclav Havel says that, “Communism was replaced by the threat of ambitious environmentalism.” “As someone who lived under communism for most of my life, I feel obliged to say that the biggest threat to freedom, democracy, the market economy and prosperity at the beginning of the 21st century is not communism or its various softer variants,” said Klaus, responding to questions posed by the two lawmakers in the US congress recently.
We as humankind have an obligation to act before it is too late. Tyrannical communistic environmentalism will lead us to major human disasters. According to Poverty.com as to how do we end global hunger; one of the five key steps is awareness of what drives up food prices, and preventing this with alternative solutions.
Instead of asking what would you have done, let’s do the right thing now - procure resources for staple food; let’s bring global prices down and stop diverting resources to bio fuels, which are taking away acreage of staple food to produce maize-based ethanol. Ethanol production is bad science so let’s stop it.
In a display of over enthusiasm to grow crops for biofuels to control toxic emissions a lot of agricultural land has been diverted away from food and led to severe price hikes.
The hardest hit from such global economic situation will be the countries on the lowest rung of poverty ladder. Will someone put some senses to divert this whole dialog on environment on a more human footing? Environment at the cost of mass famine and fewer morsels in the mouth of those who need the most is very poor judgment. Death of a poverty stricken individual is a death of a whole generation, lets stop playing God and stop fiddling with mother nature that has created us over 13.6 billion years of complex creation from nothingness.
Posted by: Iqbal Latif | May 5th, 2008 at 9:23 am | Report this comment[…] Egypt teetering on the brink of socio-economic colapse because of the high price of basic foodstuffs, or so we’re told. Riots in Kenya… well, there are always riots in Kenya. Gideon Rachman of the FT tells his reading public that pretty much every country he visits in the world is suffering because of price increases. […]
Posted by: Food crisis? What food crisis? « Blakerig’s Weblog | May 5th, 2008 at 10:59 am | Report this commentObviously, I was not at the lecture…but my understanding of Sachs, is that he sees the “market economy” and the “capital system” as one in the same…He is correct. A Market economy alone will not erase proverty or even make a dent in global poverty… A Market economy/Capital system…comes about via a process…it needs, even is dependent on a literate population of people with skills and education to start with…its needs physically healthy people …not people who are sick starving and dying in childhood…markets have to be created and sustained before they benefit not just a few but the entire society …I have never heard Sachs be dismissive of Free trade or capital markets, or the Capital system… but there are immediate needs now that more Foreign Aid must be there for…and there must be oversight on how it is used.
Posted by: Lisa-Helene Lawson | May 5th, 2008 at 4:45 pm | Report this commentAsk the Russians how right they think ‘Jeff’ Sachs is. Nuff said.
Posted by: AYC | May 5th, 2008 at 4:52 pm | Report this commentAYC:”Ask the Russians how right they think ‘Jeff’ Sachs is. Nuff said.”
By Sachs own admission he resigned in 94 after 2 years at the task of attempting to reform/advise Russia’s economy… also, by his own admission he got in over his head, by trying to impose models used in Poland and somewhat Bolivia… and he was impeded by the lack of civil society and corruption in Russia and the West bias against Russia …I think Sachs is correct that both the West AND the Russian elites failed Russia at a critical time in its history …and I think many Russians would agree with that.
Posted by: Lisa-Helene Lawson | May 5th, 2008 at 6:18 pm | Report this commentI attended a presentation by Jeff Sachs recently (not LSE but at a US university), part of the book tour for Common Wealth.
Wow. how does he quote from Kennedy for about 10 mins (a slight exaggeration perhaps but not by much) without looking at his notes? Impressive.
I’m not sure about everything he says but he’s definitely worth listening to.
Posted by: bobbytiger | May 5th, 2008 at 7:28 pm | Report this comment.
The Elephant in the room is that 6 billions people are kept alive by carbon use
the net energy return on those decrease constantly
there is no avoiding this fact .
Energy IS standard of living ,
overpopulation is a temporary abberation soon to be corrected
.
Posted by: jeannick | May 5th, 2008 at 10:50 pm | Report this commentWhat makes you think he guilt tripped you inadvertently: HE CAN SEE INTO YOUR HEART!
Posted by: Oliver | May 6th, 2008 at 1:26 pm | Report this commentOn ” food prices….political unrest” There should have been more discussion about this….I am a bit disappointed in all of you.
Posted by: Lisa-Helene Lawson | May 6th, 2008 at 1:48 pm | Report this comment“P”,
I was very surprised when you of all people (or should say posters!) had nothing to say here!…especially, with the Middle East so hard hit with food prices!…and the potential for serious political unrest…I must say this is the first time you disappointed me. I never mind when we disagree…but like most women, I do not like being disappointed…(I would make a smilely face here butI dont know how to!)
Posted by: Lisa-Helene Lawson | May 8th, 2008 at 2:38 am | Report this commentHi L-H L,
This is how you do a smiley use the following characters : - ) but without spaces!
I think the food “crisis” is a mixture of several factors, namely, the rise in virtually all othe commodity prices, the ability of many Third Worlders to eat 3 meals when they previously made do with one, crop failures and the silly attempts to replace oil with ethanol.
There is much debate about the weight of those factors but the debate appears unsettled. Some of the factots, like crop failures will go away in due course. Market mechanisms and government efforts will compesate somewhat (hopefully before the starving die!!)
In the Persian Gulf region this has added to the inflationary pressures but is partly mitigated by the increase in the oil revenues which allow the governments to subsidise more.
In the smaller nations (like UAE), the immigrant workers (S. Asians in Dubai for examnple), bear the brunt due to rising costs which together with the depreciating US$ (to which the local currencies are pegged) will reduce their remittances home. The native population is too small and pampered to notice.
In Iran, inflation is really back-breaking and will probably result in social unrest. Rice (a staple food) could be said to be affected by the huge market price rise but there is general mismanagement by the government which has been pumping the extra oil revenue into the economy and stoking up inflation.
As for Mr. Sachs, I have an aversion to “charismatic” academics. Moreover, I didn’t like the shock therapy wrought on the foirmer Soviet Union.
A reasoable critique is here:
http://www.monthlyreview.org/200holm.htm
Quote
Russia’s descent into gangster capitalism began in the early 1990s when Russian market reformers attempted to introduce capitalism in one fell swoop—on the advice of Western advisors, particularly Harvard University “shock therapist,” Professor Jeffrey Sachs and his capitalist provocateurs at the Harvard Institute for International Development (HIID).
Unquote
At my rate of progress, I hope to achieve mediocrity (from the present state of being quite terrible. So I hope the above earns a D minus.
P
Posted by: Pacifist | May 8th, 2008 at 12:06 pm | Report this comment“P”
Thank You! I am sitting in my cafe with my $4.00 latte feeling a little guilty and foolish discussing starvation but I did want your thought on the subject so thanks for posting!
I am glad the G8 is discussing this but there needs to be some immediate steps taken …according to some experts the Japanese are demanding that the US stop impeding the selling of Japan’s large stockpile of rice that it is storing due to commitments negotiated with the US and other trading partners under the WTO. The US carries weight here because most of the the stockpile is US rice that was exported to Japan. Many assert that if this rice stock was released, rice prices could come down significantly…Bush asked for a significant aid package recently that Congress should approve …there is really no reason for delay in either remedy
In the long run…going green is an imperative…and someone needs to make Africa understand that they must go Green, as they are the part of the world that will continue to suffer the most from from food price increases.
As I said Sachs got in over his head in Russia…that happens more than we realize…(i.e., getting in over your head)especially to the gifted…in part because they don’t believe that they can get in over their heads…
I shall try a smiling face :_)
Posted by: Lisa-Helene Lawson | May 8th, 2008 at 3:44 pm | Report this commentShoot! It did not work P! You see, I am in over my head!
Dear L-H L,
Why pay $4 to Starbucks when you can make a coffee for a few cents?
It wouldn’t be so bad if Starbucks weren’t giving a proportion of their profits to Israel :’-( (This is a tearful face!)
The smiley needs a dash not an underscore : - ).
As for the Japanese stock of rice, it would certainly not work for the Middle East where people eat long grain rice only and turn up their noses @ the short grain variety.
All the best,
P
Posted by: Pacifist | May 8th, 2008 at 4:00 pm | Report this commentI am glad you showed up this morning! Hillary Clinton has be highly agitated with her silly selfish behavior! I shall practice my smiley faces! and I am NOT at Starbucks… I am too particular about my coffee to use them unless no one else is around to make a latte!…Although I did find a Starbucks in Mayfair that made great lattes during my last trip to London…I am at Peet’s Coffee! It is delicious and strong! But now on the run! Catch you later!
Posted by: Lisa-Helene Lawson | May 8th, 2008 at 4:31 pm | Report this commentIt was certainly ego and hubris that lead Prof. Sachs to be so totally wrong about policies the Russian Govt was meant to follow in the early 1990s. He (and the IMF and the World Bank) never understood that the Russian Govt had lost the monopoly on money and that the economy would never follow the dream path he laid out. Has he ever acknowledged how wrong he was? No. So why should he have credibility now?
Posted by: Niels de Terra | May 11th, 2008 at 5:58 am | Report this commentTechnology once again comes to the rescue of mankind.
By tapping a cluster of nearly 1 million PCs scattered around the world, the researchers hope to develop more nutritious, robust strains of rice sooner by completing complex genetic calculations in just one or two years. (Imagine the computing power of a billion computers within a decade.)
Those calculations might have taken 200 years if left to the school’s computers. “We can make things happen much faster. We should be able to get new strains to farmers within five years,” says Ram Samudrala, associate professor of computational biology at the University of Washington in Seattle.
The novel technological development of the Green Revolution was the production of what some referred to as miracle seeds.The world population has grown by about four and a half billion since the beginning of the Green Revolution and most believe that, without the Revolution, there would be greater famine and malnutrition. India saw annual wheat production rise from 10 million tons in the 1960s to 77 million in 2007.The production increases fostered by the Green Revolution are widely credited with having helped to avoid widespread famine, and for feeding billions of people. CIMMYT was credited with creating short, stiffstrawed, fertilizer-responsive, and disease-resistant varieties of wheat that significantly increased production in Mexico, India, Pakistan, Turkey and in other parts of the globe. These successes won Borlaug the Nobel Peace Prize in 1970. Later in 1970, CIMMYT and IRRI shared the UNESCO Science Prize. Norman Borlaug is often credited with saving over a billion people.
SETI@home, I think, is the absolute best example, because here are three-million-plus people, participants in a world Internet community who are accepting from the University of California at Berkeley the data from the Arecibo telescope. As their computer is going about its business it’s analyzing those parcels of data, returning them to Berkeley. Conceivably, if any signal is ever isolated in that noise, you or me or any other participant in SETI@home will be credited with some part of that discovery. That is about as democratic an approach to science, this notion of massive distributed computing, as any.
Posted by: Iqbal Latif | May 16th, 2008 at 8:31 am | Report this comment