Hunger: the real economic crisis

Blog post by Jeremy Hobbs

Oxfam International, Executive Director (former)
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Hunger affects about 1 billion people around the world, and as the economic crisis continues, the push for growth can actually make matters worse.

The world financial crisis of 2008 and the subsequent recession have dominated the thoughts and minds of the OECD economic leaders for these past four years. But a more permanent and visceral crisis, one that marks the failure of the global economy for a large number of the 7 billion people living on the planet, points to the need for a new way to talk about the economy if we are to successfully meet the challenges of the 21st century. The real crisis lies not in the rise and fall of stocks and shares but in the bellies of a billion people, an everyday ache which stunts opportunity, arrests development and leaves a large segment of humanity without that most basic of needs: food.

Efforts, of course, are being made to tackle global hunger. Following food riots in dozens of countries in 2008, global leaders did promise action. The G8 leaders’ meeting in L’Aquila, Italy, agreed that agriculture and food security should be placed “at the core of the international agenda”. Importantly, later that year the Committee on Food Security (CFS) was reformed to strengthen the governance of the world food system.

These efforts have either yet to bear fruit (the reformed CFS is still in its infancy) or have simply been unfilled. Following the 2008 food crisis, the G8 promise at L’Aquila to provide €20 billion in support for agriculture over three years has turned out to be largely recycled from past promises or double-counted against other commitments.

Many of the policies which contributed to the food crisis continue as before. Biofuel production, for example, is still being encouraged by the EU and the US; this is despite evidence that it was a major cause of food price increases in 2008 and a significant driver of food price volatility, while perversely contributing to, rather than diminishing, carbon emissions.

In the meantime, the pressure on people living in poverty has continued to grow as the resources, land and water they depend upon to provide food are increasingly targeted by powerful interests, eager to access these valuable assets.

In developing countries, as many as 227 million hectares of land—an area the size of western Europe—has been sold or leased since 2001, mostly to international investors, often seeking not just the land but the access to vital water resources it comes with. Oxfam has already seen how many so-called investments in land have in fact been 'resourcegrabs'—with the poorest often left without land, without compensation and without food security.

The failure to address seriously the challenge of global warming is another carve-out of scarce resources by developed countries. So far, they have refused a fair climate deal which would allow poor countries to develop without resorting to massive use of fossil fuels. Meanwhile, agriculture in developing countries suffers as the seasons go haywire and the number of extreme weather events hit global food supplies.

With the world seemingly unwilling to take the urgent action necessary to tackle climate change and with the world population set to increase by another 2 billion people by 2050, the pressure is set to increase on global resources and on the world’s poor—those least able to cope. Research commissioned by Oxfam in 2010 predicts international price rises of key staples by 120-180% by 2030, with 50% of that increase attributable to climate change.

The solutions to this crisis are at hand. There is sufficient food in the world to ensure that everyone has enough to eat today and in the decades to come; at issue are questions of distribution and political will. The realisation that we are in a resource-constrained world forces us to place equity at the heart of global economic thinking. Finite resources also force us to take the issue of sustainability seriously—not as a piece of rhetoric to be deployed periodically but as an integral element of economic thinking. Instead of equality, we see booming inequality. As the world’s hungry grew to 925 million in 2010, the number of dollar millionaires grew by 8%, even in countries with hundreds of millions of people living on less than US$1.25 a day.

Instead of addressing resource constraints, many governments have simply sought to restore growth with barely a nod to its impact on the world’s carrying capacity. Green investments were just 7% of the UK’s initial spending stimulus following the 2008-09 crisis, just 6% in Spain and 3% in Japan. Instead of delivering a climate change deal, talks drag on as the world continues to grow warmer.

It’s clear that the current way of discussing and managing the world economy is not fit for purpose; it’s failing hundreds of millions now and is set to fail billions in the coming decades. Governments have defaulted to their old tools and solutions: short-termism and competitive negotiations, rather than a collaborative long-term approach.

A new, ethical economy for the 21st century is needed, one which judges its success by the fulfilment of rights, by maintaining rather than diminishing the world’s envelope of resources and by keeping equity at its heart. A simple touchstone for this new ethical economy is hunger and how we make sure it is ended.

Originally published by OECD Observer.

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