Adonis Diaries

Posts Tagged ‘James Goodman

The rich speculate on food and the world’s poor go hungry to death

To overcome poverty, we have to overcome the causes of poverty.  And the big causes of poverty today are untouched by aid. How that?

1. Poor countries are still forced to pay off debts that cannot be paid (since interest alone absorbs half the budgets of most underdeveloped States).

2. The global poor are facing ever-higher food prices, driven by speculation of the multinational financial corporations.

3. And climate change is already destroying lands and livelihoods.

The United Nations warns that these three factors are now reversing global development. To stop this we need radical change.

A 10-month-old Ethiopian child suffers malnutrition while the rich speculate on food prices.

A 10 month-old Ethiopian child suffers malnutrition while the rich speculate on food prices. Photo: Kate Geraghty

James Goodman posted on July 1 that foreign aids are not the solution for developing countries going hungry…

“WHEN we think of overseas aid, we think of helping people who need it. The western governments say: “Extend aid to help people overcome poverty”. But does it?

1. We need complete debt cancellation. We need to dismantle financial institutions that use debt to control poor countries, and we need to require banks to finance public goals, not derivatives.

2. We need to ban food speculation and protect the peasant farmers, who produce the bulk of the world’s food.

3. We need to halt ”market access” rules and limit large-scale agribusiness.

4. We need real action to leave fossil fuels in the ground – to stop mining coal, oil and gas.

5. And we need to pay our climate debts to poor countries that are facing climate change now.

Utopian? How do you think we can overcome the wholesale reversal in development that the UN is warning of?

The developed and richer States global financial crisis began in 2008.   The financial crisis in poor countries began in the late 1970s, and hasn’t stopped for breath.

Billions of dollars each year are still transferred from poor to rich States.

In 2008, $100 billion was given in overseas aid, and in the same year, rich countries pocketed $600 billion in debt repayments.

The debt burden of developing countries became unpayable when the interest on development loans was suddenly hiked in the early 1980s. Just like subprime mortgages in the US, development loans turned into a debtors’ prison.

After the 2008 financial crisis, rich countries spent more than $20 trillion in bank bailouts and economic stimuli (incredibly, $20 trillion is a fifth of global income).

The total debt of all 128 developing countries stands at just $3.7 trillion. It can be cancelled if we want it to be.

Scandalously, the food crisis in developing countries has passed us by, almost unnoticed. Yet, it is the biggest threat to poverty reduction.

Farming in many developing countries has been decimated by ”free trade” rules under the World Trade Organisation: Countries have become dependent on food imports, leaving the poor vulnerable to price hikes.

From 2006 to 2008, the global price of food doubled, forcing an additional 180 million people into destitution.

Why is food suddenly so expensive?

The answer came in 2008, when prices halved with the financial collapse, and then doubled again with the financial recovery.

Speculation on food prices was big business after the US lifted its ban on the practice in 2000.

About $13 trillion surged into food commodities from 2006, and then out again in 2008, and then back in again by 2011.

That’s why we should reverse the WTO’s ”market access” agenda and support peasant agriculture – rather than global agribusiness – and reimposed the ban on food speculation.

The third threat to poverty reduction – climate change – is already having a devastating impact on the global poor.

Nine of the 10 people displaced by climate change live in developing countries. Poverty is already on the increase due to floods and shortages of fresh water and sea-water inundation related to climate change.

The World Bank says $100 billion is needed now, each year, to help poor countries cope with the impacts of climate change.

Obviously, rich countries are most able to stop burning fossil fuels. We are most to blame for the problem and yet still we stall.

And aid donors (including Australia) still refuse to accept that climate aid should be in addition to development aid.

The debt, food and climate crises are the key drivers of global poverty. Rich countries are responsible for all three crises, and can address them if they have the political will. Why don’t they?

The Occupy movement told us that governments are captured by the new global rich.

In 2012, the World Economic Forum (WEF) calculated that 1% of the world’s population – just 70 million people – own half of the world’s wealth. That ”1%” is the problem.

The 1%  have no interest in addressing the causes of poverty because they profit from rising food prices, spiralling debt repayments from poor nations and the booming carbon economy.

The WEF – the forum for the ”1 per cent” – says this unprecedented scale of global inequality now poses the biggest risk to its interests. It is high time that risk was made real.

Note: James Goodman is in the IQ2 debate Foreign Aid is a Waste of Money, Melbourne Town Hall on Wednesday. He is an associate professor at the University of Technology, Sydney.

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June 2023

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