05 May 2011
The top management of the World Bank, including its president Robert Zoellick, is seriously concerned about the threat of a global food crisis. The financier says that if there is a crisis it will be much more severe than all the preceding food crises ever seen.
Zoellick’s pessimistic expectations are based on the pace at which food prices are currently growing around the world. According to him, there has been a 38% price increase in the global food market, nearly reaching the critical level of 2008.
According to Robert Zoellick, such a situation may increase the poverty around the world. Masterforex-V Academy experts note that it is the World Bank (headed by Mr. Zoellick) that mainly influences the poverty levels of numerous countries by decreasing or increasing their ratings. Consequently, the World Bank and the IMF not only form their monetary and credit policies but also influence the international image of a country and its attractiveness for international investors.
The WB can announce that the number of the poor in a certain country has dramatically increased and can offer the country’s government a loan, recommendations and instructions on how to make reforms. Ukraine may serve as an example: the WB experts directly influence the pension reform in Ukraine.
The WB can announce a decline in the amount of the poor as the result of its [WB] help. In this case that will be a signal for the country’s government to cooperate with the WB and the IMF. Tajikistan is a striking example: according to the WB, the poor people make up 47.2% of the entire population (it used to be 72%), implying that the poor are those who live on $2.5 a day.
What are Zoellick’s fears based upon?
1. The threat of another global crisis. According to Zoellick, the growing prices on food and crude oil as well as the instability in the Middle East well may lead to another global crisis. Such a statement was made after the meeting of the WB and the IMF in Washington. Any considerable shock is enough to start a crisis. However the major concern is the food price growth.
2. More people around the world find themselves living below the poverty line. According to the WB, since June 2010 the amount of such people has increased by 44M people, which means they cannot spend on food more than $1.25 a day.
3. Continuous price growth. If the prices on food around the world gain 10% more. The amount of those living below the poverty line will be increased by 10M people.
4. Food supply problem. Robert Zoellick says that the problem is urgent and needs to be solved as soon as
possible. Over 1 billion people are currently starving all around the world. Yet the amount grows by 68 people each minute.
What solutions are offered by the WB and IMF?
· First of all they say one shouldn’t trust the macroeconomic indicators of some specific countries. According to Dominique Strauss-Kahn, Managing Director of the IMF, these days many countries are showing sound economic recovery, however it doesn’t mean that the living standards in those countries are improving. For example, Tunis and Egypt were showing economic recovery but the people didn’t feel that their living conditions were somehow changing for the better. It appears that some international financial institution will be determining a country’s living conditions with all the ensuing consequences. Especially notable is that the WB is going to initiate a series of reforms in the Middle East supposedly in order to not lose the young generation of the region.
· In order to do that the WB and the IMF are going to promote the creation of new jobs (in the Middle East and North Africa)
· Monetary policy. Both the institutions are going to directly participate in the development of the countries’ monetary policies.
· They are going to help the developing countries. The G20 Finance Ministers also promised to allocate $35B to help the counties of the Middle East and North Africa. In the short run the IMF and the WB may announce a decline in the poverty level in Egypt, Tunis, Yemen and even in the Eastern (rebellious) part of Libya.
So, the real and urgent problem of global poverty, which by the way has been partially caused by the IMF and the WB’s activity, is under the risk of turning into an efficient tool for political manipulation and speculation. At least it is difficult to believe in the IMF and the WB’s sincere desire to feed the hungry.
http://www.profi-forex.us/news/entry4000001393.html
The top management of the World Bank, including its president Robert Zoellick, is seriously concerned about the threat of a global food crisis. The financier says that if there is a crisis it will be much more severe than all the preceding food crises ever seen.
Zoellick’s pessimistic expectations are based on the pace at which food prices are currently growing around the world. According to him, there has been a 38% price increase in the global food market, nearly reaching the critical level of 2008.
According to Robert Zoellick, such a situation may increase the poverty around the world. Masterforex-V Academy experts note that it is the World Bank (headed by Mr. Zoellick) that mainly influences the poverty levels of numerous countries by decreasing or increasing their ratings. Consequently, the World Bank and the IMF not only form their monetary and credit policies but also influence the international image of a country and its attractiveness for international investors.
The WB can announce that the number of the poor in a certain country has dramatically increased and can offer the country’s government a loan, recommendations and instructions on how to make reforms. Ukraine may serve as an example: the WB experts directly influence the pension reform in Ukraine.
The WB can announce a decline in the amount of the poor as the result of its [WB] help. In this case that will be a signal for the country’s government to cooperate with the WB and the IMF. Tajikistan is a striking example: according to the WB, the poor people make up 47.2% of the entire population (it used to be 72%), implying that the poor are those who live on $2.5 a day.
1. The threat of another global crisis. According to Zoellick, the growing prices on food and crude oil as well as the instability in the Middle East well may lead to another global crisis. Such a statement was made after the meeting of the WB and the IMF in Washington. Any considerable shock is enough to start a crisis. However the major concern is the food price growth.
2. More people around the world find themselves living below the poverty line. According to the WB, since June 2010 the amount of such people has increased by 44M people, which means they cannot spend on food more than $1.25 a day.
3. Continuous price growth. If the prices on food around the world gain 10% more. The amount of those living below the poverty line will be increased by 10M people.
4. Food supply problem. Robert Zoellick says that the problem is urgent and needs to be solved as soon as
possible. Over 1 billion people are currently starving all around the world. Yet the amount grows by 68 people each minute.
What solutions are offered by the WB and IMF?
· First of all they say one shouldn’t trust the macroeconomic indicators of some specific countries. According to Dominique Strauss-Kahn, Managing Director of the IMF, these days many countries are showing sound economic recovery, however it doesn’t mean that the living standards in those countries are improving. For example, Tunis and Egypt were showing economic recovery but the people didn’t feel that their living conditions were somehow changing for the better. It appears that some international financial institution will be determining a country’s living conditions with all the ensuing consequences. Especially notable is that the WB is going to initiate a series of reforms in the Middle East supposedly in order to not lose the young generation of the region.
· In order to do that the WB and the IMF are going to promote the creation of new jobs (in the Middle East and North Africa)
· Monetary policy. Both the institutions are going to directly participate in the development of the countries’ monetary policies.
· They are going to help the developing countries. The G20 Finance Ministers also promised to allocate $35B to help the counties of the Middle East and North Africa. In the short run the IMF and the WB may announce a decline in the poverty level in Egypt, Tunis, Yemen and even in the Eastern (rebellious) part of Libya.
So, the real and urgent problem of global poverty, which by the way has been partially caused by the IMF and the WB’s activity, is under the risk of turning into an efficient tool for political manipulation and speculation. At least it is difficult to believe in the IMF and the WB’s sincere desire to feed the hungry.
http://www.profi-forex.us/news/entry4000001393.html
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