Food Price rises lead to the ousting of Haiti PM.

The social unrest that is growing from rocketing food and fuel prices has finally claimed its first scalp. The Prime Minister of Haiti Jacques-Edouard Alexis was ousted when the senate of Haiti passed a censure motion against him. Rice prices had increased by 15 percent and a week of protests and riots had left at least five people dead and 200 injured. Food security is a constant source of concern in poor countries like Haiti while so many in affluent nations are continuing on as if nothing is happening. Protests and riots have increased over the last few weeks in Egypt and the Philippines and both the UN and the IMF have warned of the dangers of the pressure that price rises are putting on governments especially in affected developing economies.

The Guardian listed the countries facing these pressures:

Riots in Haiti last week that killed four people; violent protests in Ivory Coast; price riots in Cameroon in February that left 40 people dead; heated demonstrations in Mauritania, Mozambique and Senegal; protests in Uzbekistan, Yemen, Bolivia and Indonesia. UN staff in Jordan also went on strike for a day this week to demand a pay rise in the face of a 50% hike in prices, while Asian countries such as Cambodia, China, Vietnam, India and Pakistan have curbed rice exports to ensure supplies for their own residents.

The Guardian quoted head of the International Monetary Fund Dominique Strauss-Kahn as saying on Saturday that “the problem could also create trade imbalances that would impact major advanced economies, so it is not only a humanitarian question”. Germany’s development minister also called for greater regulation of the global biofuels market to prevent its expansion from driving up food prices.

Scarcity of rice and limits on exports placed by rice producing nations such as Egypt, Vietnam and India has led to speculation by local traders in importing countries. Philippine President Gloria Arroyo has pledged to crack down on hoarding and promising to jail anyone found guilty of “stealing rice from the people”.

Surely it is the increasing demand for biofuels in advanced nations that is leading to these shortages and the advanced nations driving this demand are the very nations cutting their levels of aid to developing nations. Also the government response of banning exports could exacerbate the difficulties because banning exports to keep domestic prices down affects producers who are poor themselves. This can then reduce supply response needed to meet future demand.

It is only a matter time before inflation begins to affect those in affluent nations but will it be too late for those they have left behind? As Strauss-Kahn said, if the price spike continues, “Thousands, hundreds of thousands of people will be starving. Children will be suffering from malnutrition, with consequences for all their lives.” How much is our ‘need’ for biofuels really costing?

~ by abstraktbiblos on Sunday, 13 April, 2008.

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