High-Level Talk With Low Level Impact

There was wall-to-wall talk about the world economy at the United Nations on Monday (14 April). The occasion was the annual high-level meeting of the UN Economic and Social Council with the World Bank, the International Monetary Fund (IMF), the World Trade Organization and the United Nations Conference on Trade and Development (UNCTAD). There were official Press conferences, informal briefings, chats in the corridors, and of course, continuous speechifying in the graciously appointed ECOSOC chamber. It was a typical UN affair, with hardly a thought given to how meaningful the proceedings were to the real world of financial fraud, foreclosures and food riots.

Secretary-General Ban Ki-moon's opening speech had a hastily inserted paragraph echoing World Bank president Robert Zoellick's call for action on the growing problem of rising food prices, which "could mean seven lost years in the fight against worldwide poverty." The World Bank, he said, had "indicated that the doubling of food crisis (sic) over the last three years could push 100 million people in low-income countries deeper into poverty. We need not only short-term emergency measures to meet urgent critical needs and avert starvation in many regions across the world, but also a significant increase in long-term productivity in food grain production." The international community would "also need to take urgent and concerted action in order to avert the larger political and security implications of this growing crisis." The UN needed "to examine ways to lead a process for the immediate and longer term responses to this global problem."

After that Ban passed on to the theme of the day: “Coherence, coordination and cooperation in the context of the implementation of the Monterrey Consensus, including new challenges and emerging issues." The 2002 Monterrey Consensus on financing for development was supposed to provide significantly more support for developing countries but it has had little impact. Aid has increased but most poor countries have not benefited; in fact they continue to transfer large amounts of money to the rich. This reverse flow of capital has continued over the decades since the end of formal colonial rule because of unfavorable terms of trade and a variety of illicit transfers. Norway noted that about half of the $1 trillion to $1.6 trillion a year in illicit financial flows is estimated to originate from developing countries.

Ban announced that he had appointed M. Philippe Douste-Blazy, former Foreign Minister of France as "Special Adviser on Innovative Financing for Development" to lead the UN Secretariat’s "efforts to support that important process." (Bruised feelings at the Quai d'Orsay at its loss of the Department of Peacekeeping Operations are unlikely to be salved by the appointment.) He also designated two Special Envoys for the Doha Review Conference: Heidemarie Wieczorek-Zeul, Minister of Development Cooperation of Germany, and Trevor Manuel, Minister of Finance of South Africa; they will "help mobilize political support for, and high-level participation in, the Conference." Ban left the meeting with the uplifting exhortation:
“Let us make 2008 a truly great year in the field of development.”

Another moment of unintended comic relief came in the speech of a representative of the World Bank (not Zellick but someone of the order of Chief Assistant to the Assistant Chief). He told the meeting that a "Monitoring Report" prepared in collaboration with the IMF showed that the world is on track to meet the Millennium Development Goal (MDG) on gender parity in schools but not on nutrition, education, health and sanitation. Many "fragile" countries are "falling behind on most, if not all, the Millennium Goals." However, he added cheerily, the MDGs could still be met if global economic growth momentum is sustained, there is more progress on human development, aid is scaled up, trade is harnessed to inclusive and sustainable growth, international financial institutions provide more "leverage," and environmental sustainability is ensured -- all at the national and international levels. Sad to say, the audience did not laugh.

At the end of the day ECOSOC president Leo Merores of Haiti told delegates that a special meeting of the Council "in the very near future" would consider a global response to the food crisis.

The Great Famine of 2008-2009?

Over the last year rising food prices have affected poor people in countries around the world and in recent days many thousands of them have taken to the streets to protest. There have been food riots in Bangladesh, Burkina Faso, Egypt, Haiti, Mauritania, Mozambique and Senegal.

The World Food Program has reported food crises in 37 countries, and told governments that it faces a $500 million shortfall to meet the needs of 89 million hungry people. That number could rise dramatically if the inflation in food prices -- which analysts ascribe to a perfect storm of soaring petroleum prices, natural disasters linked to climate change, growing demand in China and India, and the ever-rising demand for raw materials to make biofuels -- is not brought under control. The rampant speculation that has contributed to skyrocketing food and fuel prices is hardly ever mentioned as a cause of the crisis; however the Food and Agriculture Organization (FAO) has noted that speculation and market failures have reduced the impact of increased production.

Recommendations to deal with the situation have not been too specific. World Bank President Robert Zoellick, who has warned that the inflation in food prices "is not a this-year phenomenon," has proposed a "New Deal for a Global Food Policy"combining emergency aid and long-term initiatives to boost agricultural productivity. The "Group of 24" Developing Countries in the World Bank-IMF has urged affluent countries to increase financial aid.

There does not seem to be an air of urgency about the situation yet, much less one of panic; but that could develop within a matter of weeks if it becomes apparent that governments do not have a handle on the situation.