Developing countries face the greatest challenge
from food insecurity. Simplistic approach to prevent a food crisis could be growing your own veggies on your balcony or roof top. Great idea. It can help no doubt. Only if you have the time. As a person you may do so. But as a nation, you can't do so. Let's get realistic. There is no room for naivety when there is a clear and present danger of food security ballooning out of proportion in Africa - notorious for dictators, religious extremism, violence, large scale institutional corruption and lack of trust frameworks which is pulling Africa towards becoming a bankrupt continent mired in the most acute political crisis of leadership to steer the continent in a clear path of development and growth.
But if we could for a moment pause and think about the interconnected nature of globalization, then we can fathom what an absence of free market can do to complicate things even further if we are not prepared to trade in agricultural commodities that Africa is selling to the world. Any such actions of the developed world will perhaps cause more damage to the fragile African countries in particular and developing countires to certain extent as well. It is worthwhile to think how could we eat our own cake and aspire to have it too?
Trade is perhaps the only way to bring record budget deficits, poor balance of payments and high interest payments that have mired most African states out of their economic disaster. The reality is market based methods are seldom fully accurate but effective nonetheless. A similar analogy could be democracy
- on any given day, democracy is always better than communism
....we don't need a debate in that. We have seen the results the world over.
So what can we really do?
Wat does most poor countries in Africa trade?
It is mostly raw materials, agricultural stuff...
Mostly to the EU, Australia & the United States. now we need to ask why?
In economics, it is explained by the term: comparative advantage
To understand the interconnectedness of individual currencies with comparative advantage, one may need to brush up a bit of economics studies: may be you could try it here
to understand comparative advantage
first. And once you do or if seeing makes it easier than reading, try the two simple videos below as well:
- comparative advantage and gains from trade part 1
- comparative advantage and gains from trade part 2
In defense of globalization
, Prof Jagdish Bhagwati has put forward realistic viewpoints. the only way we can evade a food crisis is not a single solution but an array of activities both at the supply side and the demand side of the equation.
How African political leadership mismanaged their economy causing severe economic hardships for their own citizens should not be overlooked. Nobel Laureate Prof Amartya Sen's Poverty and famines: an essay on entitlement and deprivation (1981)
provides compelling reasons
to show that the 1943 Great Famines of Bengal were man made rather than emanating from food shortages.
Cormac O'Grada from Princeton University looked at markets and famines in pre-Industrial Europe
further elaborated on Adam Smith and Amartya Sen's understanding of famines. Even if we look at India (pre Independence) in the thirties and the forties, the story was nothing different than what we see in Africa today. After Independence, India did not have any major famine while in pre-Independence era (British rule), there were as many as 25 major famines. If we look at Africa, causes of famines, hunger, crop yield and malnutrition are are linked to the non existent nature of any functional democracy in Africa (except South Africa).
Africa and its troubles are not going to go in one shot. The only way is to start a consciousness among the African people in that continent to choose their leaders judiciously who are pro-development, pro-trade and non violent...if African people can shun their guns and try whatever way they can to focus their lives on the ethos of non violence
while at the same time heavily focus on building an infrastructure where non food manufacturing can start, grow and thrive, they can reduce their importations of non food commodities and reduce their compulsion to export food items when their own countrymen go to bed without dinner. It is important to understand the interconnectedness of exports and imports to make sense of the fiscal responsibilities that governments have to meet their debt payment obligations and how wrong policy directions at a macro level can never ever be contained through micro adjustments.
Africa's two vital trading partners - EU and US are now in deep trouble themselves and their domestic priorities are dictating higher tariffs, more stringent regulatory embargoes for all importations (read: agricultural produce from Africa).....even US has a record budget deficit and has political compulsions to protect their own farmers.
The way I see it, Africa should invest in education and create an environment where you can do business and thrive. Only that can change things for Africa. Methods that are relevant for EU and US to deal with recession and food security may not be always relevant for Africa.
You don't have to grow crops to evade food security as long as you have the money to buy it from else where. The problem with Africa is that it has no money at all for anything and the contagion effect from lack of liquidity in the market system means nobody has any money to fund any kind of innovation especially when the basics are not being funded at all.
It has compulsions to export agricultural goods causing domestic food inflation and if we (which is the rest of the world) even stops buying whatever African countries are exporting, they will gather more deficits and their debt service payment obligations could not be met...leading to disaster, collapse and anarchy....so it is important to realize what liberates the oppressed and enriches the poor more than any other mechanism
is free market economics based approaches complemented by large scale government interventions to empower trade and commerce and facilitate capital to flow in uninterrupted...poor people dying from food security will save themselves if their political leadership unlike Zimbabwe's Mugabe understands the importance of minorities, free trade, secular social frameworks, non violence, rule of law and the interconnectedness of everything around global trade and political stability that should liberates us all. Or else one stands with a begging bowl and keep asking....rich donor countries won't give it for free...often institutional charities, foreign government grants and loans from multilateral agencies are strategic in nature and are often intended to induce uncompetitive layers that weakens domestic businesses (knowingly and unknowingly) rather than strengthen a recipient country from what we have seen historically over the last six decades. Recipient aid countries desperate to meet minimum budgetary spending are compelled to provide concessions
to rich donor countries to have a free run that ultimately destroys innovation, local businesses and the backbone to stand up again. This game of donor induced uncompetitiveness has been the single biggest reason why human capital from under developed countries have either flocked to greener pastures
(brain drain) or simply gravitated towards multi-national companies at the expense of local, smart yet resource poor small businesses. There can be no innovation without smart thinking. So smart educated people can and certainly will dictate how certain countries will go ahead and most will lag behind.
So my approach is to create a movement that can awaken the people of Africa to be inspired to seek a non violent framework
to evaluate their political leaders, engage the world to better their education, negotiate with EU and US to provide concessions to make mobility of their human capital easier, bring in capital tied to local partnership model or public private partnership models to create momentum for critical infrastructure development and create market conditions for trade of non food items so that food can be consumed domestically.
Exports of essential food items should be phased out with zero import duties in imports of food grains can make some difference. What external charity can solve in Africa is fairly limited at this stage. Africa has to help Africa realistically. There can be no short cuts. Governments in Africa have no independent foreign policies and therefore quite vulnerable at this stage. The macro fundamentals of Africa are in shambles. And to fix that, micro adjustments can help to only a certain extent....i would first start to think how to evoke business to come to Africa before anything else.
There is an interesting article that critiques subsidies in rich nations
which is worth reading to gather a somewhat different perspective to free market trade
. Well, at the end of the day, you can't simply sell your stuff if you are not ready to buy some. That brings us to an interesting new direction: has the global financial crisis in some way turned even those earlier shouting from their roof tops about globalization suddenly hiding under increasing protectionism seeing that their party is over....??
Well, you can't have your cake and eat it too....i reckon we will be much better off with free movement of goods and services (read: people)....and that is called globalization....mobility of people is as important for services if not more than mobility of goods...the issue of food security will not disappear in a vacuum unless we address interconnected issues all linked with consumption, affordability, comparative advantage, free trade and stability....and generosity to understand that we can't help others by giving only grants....there is a renewed need to evoke context and character for RECIPROCITY. "the frog does not drink up the pond in which it lives"