Last week the two leading international banking institutions met in Washington DC to discuss the precarious status of global food security. Though the conversations were fraught with deeply disturbing hypotheticals and harrowing production projections, immediate mitigation strategies were decided upon and set into motion. Executing these plans quickly enough to alleviate some of the poorest nations’ growing pressure is the challenge that the International Monetary Fund & World Bank now face.
A Tipping Point
These fluctuating food prices make the world’s poor astoundingly vulnerable. The increasing global dependency on large-scale agribusiness made last year’s natural disasters—such as droughts in Europe and flooding in Africa—all the more devastating. So much so that World Bank President Robert Zoellick is worried “we risk losing a generation” if food prices continue to increase, and predicts we are “one more shock away from a full-blown crisis”.
At a time when many poor countries are already grappling with lower wages and higher unemployment, hunger continues to be pervasive in Northern Africa, Sub-Saharan Africa, and the Middle East. Though food prices are not the cause of recent political unrest in these regions, they serve to facilitate, enflame, and sustain the turmoil; Zoellick refers to it as an “aggravating factor”. For example, the World Bank’s latest Food Price Watch has shown double-digit food price inflation in Egypt and Syria.
By June last year 44 million additional people were living below the World Bank’s poverty line. If prices climb by another 10% (which projections show is very possible over the next few months), another 10 million people will be added to that group, and if prices increase by 30 % over 34 million additional people will be not be able to make enough income to feed themselves.
Already this year, staple crop prices have surged—wheat has risen by 69%, corn by 74%, and soy by 36% according to World Bank statistics. The effects of these fluctuations disproportionately hits developing countries; the Kyrgyz Republic has seen prices jump by 27 percent and Georgia has seen a price hike of 23 percent, among many examples. “With food prices, we are at a real tipping point,” said Zoellick. “We are concerned about high and volatile international food prices and their impact on vulnerable populations, as well as the longer term risks they pose to growth and poverty reduction.”
Mitigation Plan
To counteract these trends, the IMF and World Bank plan to greatly expand development in the agricultural sector and hope to aggressively encourage private sector investment in these struggling regions.
Also meeting last week were top G20 Finance chiefs, who pledged financial support to assist the new governments in the Middle East and North Africa. Zoellick said the G20 can play a leading role in helping alleviate the world’s food production problems, adding that the group of nations is working closely with the World Bank.
A strategy to remove export restrictions for food-producing countries was announced, as well as ideas about how to create social safety nets. Zoellick claims support for the world’s poor will be more sustained “through effective, targeted nutrition and safety net programs rather than mistaken price controls or broad-based increases in wages.” Helping to manage agricultural risks and extending the reach of the World Food Program are other plans outlined in the 2011 World Development Report (http://wdr2011.worldbank.org/fulltext).
The ultimate objective is to curb fluctuations in food prices by making crop yields more dependable in 2011. In total the World Bank plans on investing 7 billion US dollars into improving global agricultural production this year. Despite the tremendous challenges, Zoellick remains optimistic: “I think these goals are achievable in the coming months.”
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IMF & World Bank Confront Global Food Security Realities
April 26, 2011
Last week the two leading international banking institutions met in Washington DC to discuss the precarious status of global food security. Though the conversations were fraught with deeply disturbing hypotheticals and harrowing production projections, immediate mitigation strategies were decided upon and set into motion. Executing these plans quickly enough to alleviate some of the poorest nations’ growing pressure is the challenge that the International Monetary Fund & World Bank now face.
A Tipping Point
These fluctuating food prices make the world’s poor astoundingly vulnerable. The increasing global dependency on large-scale agribusiness made last year’s natural disasters—such as droughts in Europe and flooding in Africa—all the more devastating. So much so that World Bank President Robert Zoellick is worried “we risk losing a generation” if food prices continue to increase, and predicts we are “one more shock away from a full-blown crisis”.
At a time when many poor countries are already grappling with lower wages and higher unemployment, hunger continues to be pervasive in Northern Africa, Sub-Saharan Africa, and the Middle East. Though food prices are not the cause of recent political unrest in these regions, they serve to facilitate, enflame, and sustain the turmoil; Zoellick refers to it as an “aggravating factor”. For example, the World Bank’s latest Food Price Watch has shown double-digit food price inflation in Egypt and Syria.
By June last year 44 million additional people were living below the World Bank’s poverty line. If prices climb by another 10% (which projections show is very possible over the next few months), another 10 million people will be added to that group, and if prices increase by 30 % over 34 million additional people will be not be able to make enough income to feed themselves.
Already this year, staple crop prices have surged—wheat has risen by 69%, corn by 74%, and soy by 36% according to World Bank statistics. The effects of these fluctuations disproportionately hits developing countries; the Kyrgyz Republic has seen prices jump by 27 percent and Georgia has seen a price hike of 23 percent, among many examples. “With food prices, we are at a real tipping point,” said Zoellick. “We are concerned about high and volatile international food prices and their impact on vulnerable populations, as well as the longer term risks they pose to growth and poverty reduction.”
Mitigation Plan
To counteract these trends, the IMF and World Bank plan to greatly expand development in the agricultural sector and hope to aggressively encourage private sector investment in these struggling regions.
Also meeting last week were top G20 Finance chiefs, who pledged financial support to assist the new governments in the Middle East and North Africa. Zoellick said the G20 can play a leading role in helping alleviate the world’s food production problems, adding that the group of nations is working closely with the World Bank.
A strategy to remove export restrictions for food-producing countries was announced, as well as ideas about how to create social safety nets. Zoellick claims support for the world’s poor will be more sustained “through effective, targeted nutrition and safety net programs rather than mistaken price controls or broad-based increases in wages.” Helping to manage agricultural risks and extending the reach of the World Food Program are other plans outlined in the 2011 World Development Report (http://wdr2011.worldbank.org/fulltext).
The ultimate objective is to curb fluctuations in food prices by making crop yields more dependable in 2011. In total the World Bank plans on investing 7 billion US dollars into improving global agricultural production this year. Despite the tremendous challenges, Zoellick remains optimistic: “I think these goals are achievable in the coming months.”
