There are many causes behind the world food crisis, but one chief villain: World Bank head, Robert Zoellick. Commentary by writer, activist and academic Raj Patel.

 

For anyone who understands the current food crisis, it is hard to listen to the head of the World Bank, Robert Zoellick, without gagging.

Earlier this week, Zoellick waxed apocalyptic about the consequences of the global surge in prices, arguing that free trade had become a humanitarian necessity, to ensure that poor people had enough to eat. The current wave of food riots has already claimed the prime minister of Haiti, and there have been protests around the world, from Mexico, to Egypt, to India.

The reason for the price rise is perfect storm of high oil prices, an increasing demand for meat in developing countries, poor harvests, population growth, financial speculation and biofuels. But prices have fluctuated before. The reason we're seeing such misery as a result of this particular spike has everything to do with Zoellick and his friends.

Robert Zoellick's mission was to accelerate two decades of trade liberalisation in key strategic commodities for the United States, among them agriculture. Practically, this meant the removal of developing countries' ability to stockpile grain (food mountains interfere with the market), to create tariff barriers (ditto), and to support farmers (they ought to be able to compete on their own).

Before he replaced Paul Wolfowitz at the World Bank, Zoellick was the US trade representative, their man at the World Trade Organisation. While there, he won a reputation as a tough and guileful negotiator, savvy with details and pushy with the neoconservative economic agenda: a technocrat with a knuckleduster.

His mission was to accelerate two decades of trade liberalisation in key strategic commodities for the United States, among them agriculture. Practically, this meant the removal of developing countries' ability to stockpile grain (food mountains interfere with the market), to create tariff barriers (ditto), and to support farmers (they ought to be able to compete on their own). This Zoellick did often, and enthusiastically.

Without agricultural support policies, though, there's no buffer between the price shocks and the bellies of the poorest people on earth. No option to support sustainable smaller-scale farmers, because they've been driven off their land by cheap EU and US imports. No option to dip into grain reserves because they've been sold off to service debt. No way of increasing the income of the poorest, because social programmes have been cut to the bone.

The reason that today's price increases hurt the poor so much is that all protection from price shocks has been flayed away, by organisations such as the International Monetary Fund, the World Trade Organisation and the World Bank.

Even the World Bank's own Independent Evaluation Group admits (pdf) that the bank has been doing a poor job in agriculture. Part of the bank's vision was to clear away the government agricultural clutter so that the private sector could come in to make agriculture efficient.

The reason that today's price increases hurt the poor so much is that all protection from price shocks has been flayed away, by organisations such as the International Monetary Fund, the World Trade Organisation and the World Bank.

But, as the Independent Evaluation Group delicately puts it, "in most reforming countries, the private sector did not step in to fill the vacuum when the public sector withdrew." After the liberalisation of agriculture, the invisible hand was nowhere to be seen.

But governments weren't allowed to return to the business of supporting agriculture. Trade liberalisation agreements and World Bank loan conditions, such as those promoted by Zoellick, have made food sovereignty impossible.

This is why, when we see Dominique Strauss-Kahn of the IMF wailing about food prices, or Zoellick using the crisis to argue with breathless urgency for more liberalisation, the only reasonable response is nausea.

Note: The above article was circulated by Information Clearing House. Writer, activist and academic Raj Patel (http://www.rajpatel.org/) is the author of Stuffed and Starved: Markets, Power and the Hidden Battle for the World's Food System. Click here to order the book.





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April 20, 2008
 


General George Yeo of $ingapore with Burmese General Thein Shin [left]. This picture was taken in April 2007 when General Yeo was in Burma to negotiate for sand. Indonesia has refused to export sand to $ingapore.

"GLOBALISATION IS A CHALLENGE NO BUSINESS CAN DUCK"

"I have just come back from the WTO Meeting in Cancun which collapsed because of the strong reaction among many developing countries against globalisation. But whether we like it or not, the revolution in technology which is the reason for this globalisation is here to stay. Advances in Information Technology and transportation have led to globalised markets and easier flow of knowledge and capital. Take global travel as an illustration. In 1980's, there were about 360 million international travellers and tourists a year. Today, the number has nearly tripled.

"Globalisation is a challenge that no business however small can duck. Traditionally, in many countries, SMEs dominate the sectors where the forces of globalisation have least been able to penetrate. Distance and trade barriers protected the mom-and-pop shops. Content with their local niches, they could take their time to adapt to change, if at all. But today, all these niches are under attack. Even if we do not go overseas, foreign competitors will come. If we do not keep an eye on our lunch, someone else will take it from us!

"The plight of the local grocery store all over the world is familiar to all of us. Increasingly it has to compete against large supermarkets including foreign ones like Carrefour, Wal Mart and Giant."

- GENERAL GEORGE YEO, $heep City's Minister for Trade & Industry, Sept 22, 2003. General Yeo is also a procurer of Burmese sand for $ingapore.

There is one sector protected from globalisation. Ministers cannot be replaced with foreign talent. Their multi-million-dollar salaries are protected. $ingaporeans, however, must be "competitive", ie, work harder on lower wages.