By Tom Eley
15 October 2009
More than 1 billion people, one sixth of humanity, will have experienced undernourishment by the end of 2009, two United Nations agencies reported on Wednesday. The ranks of the hungry have increased by about 100 million people in one year, a result of the most severe economic crisis since the Great Depression.
“The State of Food Insecurity,” produced by the UN’s Food and Agriculture Organization (FAO) and the World Food Programme (WFP), explains that the sharp increase in global hunger is not the result of poor harvest or natural disasters, but the man-made causes of high food costs, growing unemployment, and declining incomes.
Meanwhile, cutbacks in donations to the WFP have so far left it with 58 percent of last year’s funding, forcing it to curtail ongoing food relief operations.
The report notes that the spike in malnourishment marked an intensification of a longer-term trend. Hunger has been on the increase since the early 1990s. “Even before the food crisis and the economic crisis, the number of hungry people had been increasing slowly but steadily,” the report notes.
Most of the increase in hunger has taken place in the world’s poorest regions—Asia, sub-Saharan Africa, Latin America and the Caribbean, and the Middle East and North Africa. “No nation is immune and, as usual, it is the poorest countries—and the poorest people—that are suffering the most,” states the report, which was released in advance of World Food Day on October 16.
Poor nations have been hit by a combination of problems, among them a dearth of foreign aid and investment, declining wages and mounting layoffs, an unprecedented global reduction in remittances from emigrants to family members left behind, and persistently high food prices, the Rome-based agencies said.
The world’s poor are still suffering the effects of the commodity speculation of 2006-2008 that sent the prices of such staple foods as rice, wheat and corn beyond the reach of hundreds of millions. While prices have receded somewhat with the economic crisis of 2009, they remain, on average, 17 percent higher than their 2005 levels.
High food prices cause more than hunger. Difficulty in procuring food forces families to adopt a number of “coping mechanisms,” according to the report, such as “replacing more nutritious food with less nutritious food,” selling productive assets, and “forgoing health care or education.”
The report also notes that the tools with which governments in poor nations might typically respond to widespread hunger—currency devaluations, borrowing, and international relief—have been blunted by the global character of the economic crisis. Past economic crises have been concentrated in single nations or regions, the report points out.
Although extreme hunger is most intense in less developed nations, social misery is on the rise among workers and the poor in the advanced economies, where the report estimates 15 million will have experienced undernourishment by the end of 2009.
This figure, if anything, underestimates the nutritional crisis in the advanced countries. In the US alone, 36.2 million people lived in households defined as facing “food insecurity” in 2007—before the onset of the economic crisis— among them 12 million children, according to statistical analysis of US Department of Agriculture and Census Bureau data. (see “US: 12 million children face hunger and food insecurity”).
The social crisis in the advanced economies was highlighted by an Organisation for Economic Cooperation and Development (OECD) report, also released this week, on unemployment. The report found that among its 30 member states the combined unemployment rate rose in August by .1 percentage points from July to 8.6 percent, and stood 2.3 points higher than August of 2008. It is anticipated that unemployment rates will rise for another year and remain high for years to come.
Mounting unemployment in the advanced economies has disproportionately affected layers of the population such as the youth, unskilled workers, and immigrants. In response, immigrants have cut back on remittances, compounding hunger in poorer nations.
Remittances account for more than 6 percent of gross domestic product (GDP) in most developing countries, according to “The State of Food Insecurity.” For some, the figure is much higher. In Tajikistan, remittances account for 46 percent of GDP; in Honduras and Lebanon, about 25 percent. Roughly a fifth of all households in Albania, the Phillipines, El Salvador, and Haiti depend upon remittances as a source of income.
In the South Asian countries, remittances account for well over half of all foreign capital inflows. Surprisingly, this is especially true of India—held up as a star in the new global economy—where remittances account for more than three quarters of all cash inflow, dwarfing foreign direct investment.
Yet declines in remittances were just one part of a marked contraction of the overall capital flows to poor countries. Citing one example, the report explains that in the 13 largest Latin American economies, capital inflows have fallen by more than three quarters, from $184 billion in 2007 to an estimated $43 billion in 2009.
Foreign aid has fallen precipitously as well, with the International Monetary Fund estimating that 71 poor nations will see an average drop of 25 percent in assistance this year. This falloff, again a result of the economic crises in the advanced countries, will have its most severe impact in the very poorest countries, especially those in sub-Saharan Africa.
The global food crisis is prompting warnings from aid organizations for immediate action—as well as incomprehension, given the enormous resources and food production capacity theoretically available to meet it.
“We have the economic and technical means to make hunger disappear,” said FAO Director-General Jacques Diouf. “What is missing is a stronger political will to eradicate hunger forever.”
This statement is only half true. While it is certainly the case that science and technique have increased agricultural productivity to the point that all the world’s population could be easily fed, what stands in the way is not a lack of “political will,” but a system of social organization—capitalism—that subordinates social need to the profit drive of the rich.
Last year the WFP secured record donations of $5 billion in order to feed the world’s hungry. This year, donor countries and wealthy individuals have held the purse strings tight, giving the WFP only $2.9 billion.
This is a paltry sum.
According to Forbes, there are 224 individual families in the world who have personal fortunes of $2.9 billion or more. The total resources allocated through the WFP to feed the world’s poor is also about 2 percent of what the biggest Wall Street banks will dole out in salaries and bonuses to America’s top bankers, whose reckless speculation triggered the very economic crisis that has sent tens of millions more into hunger. (See “A record year for Wall Street pay”)
And, of course, the $2.9 billion offered to feed the world’s hungry is an infinitesimally small percentage of the trillions governments have mobilized to rescue the world’s biggest banks.
“World leaders have reacted forcefully to the financial and economic crisis and succeeded in mobilizing billions of dollars in a short time period,” Diouf noted. “The same strong action is needed now to combat hunger and poverty.”
Yet it is not only that these unfathomably large bank bailouts and the personal fortunes they protect represent a misallocation of resources that might serve useful social purposes, for example seeing to it that everyone has enough to eat.
The wealth of the financial elite arises directly from the impoverishment of the great majority of the world’s population through predatory forms of speculation in debt, commodities, real estate, currency, and the shutdown of industry. Now these practices have been joined by the open plundering of the world’s treasuries.
These processes will encounter mass opposition. Already, high food prices have triggered riots in over 60 countries since 2007.