With financial institutions collapsing, developed countries slipping into recession and whole nations facing the possibility of bankruptcy there are few reasons to celebrate. However, for the world's poorest, living on a dollar a day or less the current credit meltdown may have come just in time.
It is not just Lehrman Brother CEOs gently floating back to earth with their golden parachutes that are looking with relief at the present economic crisis. The sudden end to cheap loans and lax lending policies have put a break on spiralling food prices and the given a respite to those struggling to pay for basics such as corn, rice and bread.
Over the last two years countries such as Bangladesh, Cameroon, Egypt and Yemen have seen riots and other forms of serious social unrest triggered by the massive increase in the cost of basic food stuffs. Rising oil prices, the growth in consumption by China and India and the impact of growing biofuel demand have all been cited as the villain of the piece. While these factors have been implicated in the sudden rise in the cost of food worldwide the upsurge in prices is, in the opinion of some analysts the result of the rapid rise in speculation in the commodities market. According to the New Statesman the massive influx of investment capital fleeing unstable mortgage market has set off speculation in commodities such as wheat, rice and the like by investment houses, pension funds, private equity groups and banks.
The Toronto Global and Mail reported in May 2008 that investments in commodity indexes rose from $13 billion dollars (U.S.) in 2003 to $260 billion in March 2008 and that according to U.S. hedge fund manager, Michael Masters, speaking at a Senate hearing in May that that figure could rise to $1 trillion. Under the weight of such numbers the demand for increased returns has proved stronger than the reality that such increases have to come from the pockets of the planet's poorest and most vulnerable.
Rising prices have impacted on the lives of billions worldwide but none more so than those who live on $2 a day or less as Josette Sheeran, the executive director of the World Food Program, speaking to Time in July says;
"What we're seeing is that people living under $2 a day are giving up health care and education," says Sheeran. "Those living on under $1 a day are giving up protein once a week or vegetables." And those on 50¢ a day or less, like the people of Karamoja (Uganda), are simply cutting out meals".
Similarly, the World Bank predicted that 100 million people run the risk of starvation in its 13 April forecast.
However, with the sudden halt in the supply of cheap credit, the driving force behind the commodities bubble the price of basic food stuffs has dropped, perhaps restoring a note of sanity in what has been one of the most heinous robbery attempts in recorded history.
Despite the fall in prices many in the poorer parts of the world worry that once the markets recover their nerve the commodity markets will once again be flooded with capital wary of riskier choices. Dr Dunstan Campbell, FAO representative in Jamaica, The Bahamas and Belize speaking to the Sunday Gleaning that the food markets will be once again considered a secure market in a world economy heading to recession thus pushing up prices once more.
Tags: World | RECESSION | new statesman | Credit Crunch | world food crisis | world's poorest | rising food pries | toronto global and mail | sunday gleaning
It is not just Lehrman Brother CEOs gently floating back to earth with their golden parachutes that are looking with relief at the present economic crisis. The sudden end to cheap loans and lax lending policies have put a break on spiralling food prices and the given a respite to those struggling to pay for basics such as corn, rice and bread.
Over the last two years countries such as Bangladesh, Cameroon, Egypt and Yemen have seen riots and other forms of serious social unrest triggered by the massive increase in the cost of basic food stuffs. Rising oil prices, the growth in consumption by China and India and the impact of growing biofuel demand have all been cited as the villain of the piece. While these factors have been implicated in the sudden rise in the cost of food worldwide the upsurge in prices is, in the opinion of some analysts the result of the rapid rise in speculation in the commodities market. According to the New Statesman the massive influx of investment capital fleeing unstable mortgage market has set off speculation in commodities such as wheat, rice and the like by investment houses, pension funds, private equity groups and banks.
The Toronto Global and Mail reported in May 2008 that investments in commodity indexes rose from $13 billion dollars (U.S.) in 2003 to $260 billion in March 2008 and that according to U.S. hedge fund manager, Michael Masters, speaking at a Senate hearing in May that that figure could rise to $1 trillion. Under the weight of such numbers the demand for increased returns has proved stronger than the reality that such increases have to come from the pockets of the planet's poorest and most vulnerable.
Rising prices have impacted on the lives of billions worldwide but none more so than those who live on $2 a day or less as Josette Sheeran, the executive director of the World Food Program, speaking to Time in July says;
"What we're seeing is that people living under $2 a day are giving up health care and education," says Sheeran. "Those living on under $1 a day are giving up protein once a week or vegetables." And those on 50¢ a day or less, like the people of Karamoja (Uganda), are simply cutting out meals".
Similarly, the World Bank predicted that 100 million people run the risk of starvation in its 13 April forecast.
However, with the sudden halt in the supply of cheap credit, the driving force behind the commodities bubble the price of basic food stuffs has dropped, perhaps restoring a note of sanity in what has been one of the most heinous robbery attempts in recorded history.
Despite the fall in prices many in the poorer parts of the world worry that once the markets recover their nerve the commodity markets will once again be flooded with capital wary of riskier choices. Dr Dunstan Campbell, FAO representative in Jamaica, The Bahamas and Belize speaking to the Sunday Gleaning that the food markets will be once again considered a secure market in a world economy heading to recession thus pushing up prices once more.
Tags: World | RECESSION | new statesman | Credit Crunch | world food crisis | world's poorest | rising food pries | toronto global and mail | sunday gleaning
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