by Alex Evans | Jun 19, 2008 | Africa, Climate and resource scarcity, Cooperation and coherence, East Asia and Pacific, Economics and development, Global system
Not much respite in prospect on food export restrictions, if today’s FT is anything to go by. Vietnam, the world’s second largest exporter of rice, has imposed a minimum price of $800 a tonne on rice exports (the price last year was $300 – ouch). Meanwhile, Argentina has just passed a tariff bill which “is not likely to lead to an immediate resumption of grain exports in the world’s third-biggest soy producer, sixth-biggest wheat producer and second-biggest corn exporter, analysts say”.
These problems underline a bigger challenge lurking in the background: that while the world may have a rules-based global trading system built around the WTO, that system is built for totally different trading conditions to the ones that obtain today.
In essence, the WTO and its dispute resolution architecture are designed to help countries to work through squabbles about market access and dumping – the sort of scuffles you expect in a buyer’s market. Fine – except that today, we’re in a seller’s market, on food and energy alike, where the concerns that are really furrowing brows are over security of supply, not market access.
And as a range of current examples show, the one thing policymakers can’t do is just sit back and ‘leave it to the market’. On energy, there’s already increasing friction over strategic oil supplies in Africa, the Arabian Gulf and the South China Sea. On food, meanwhile, export restrictions have left many countries in serious difficulties – like the Philippines, which is trying to go self-sufficient in rice within three years (from being the world’s no. 1 importer today – good luck). Meanwhile, China, Saudi Arabia and other importers are engaged in a quiet but determined hunt for land to buy in third countries.
Over the long term, these pressures may increase dramatically. Demand for energy and food is forecast to grow by 50 per cent each by 2030, according to the IEA and the World Bank respectively. If supply growth fails to keep pace – as seems entirely possible, especially given that food and energy prices are increasingly interlinked (through fuel costs, fertiliser costs, and the arbitrage relationship created by biofuels) – then situations like these will in retrospect seem like no more than trailers for the main feature.
In that context, it would be helpful if our rules-based trading system had something – anything – to say on the subject of security of supply. Do major exporters of key strategic resources have responsibilities as well as rights in the international system? Or is it no more than the legitimate exercise of sovereignty if they suspend or restrict exports at a moment’s notice?
Big questions – but not ones that are the subject of searching debate among trade negotiators. Like Britain’s artillery guns in Singapore during World War Two, the world trade system’s defences are pointing the wrong way.
by Richard Gowan | Jun 17, 2008 | Climate and resource scarcity, Conflict and security, Cooperation and coherence, Global system, Influence and networks, Middle East and North Africa, North America, UK
Doing some Google “research” this morning, I dug up this 1977 Foreign Affairs piece by Stanley Hoffmann on “The Uses of American Power”. You wouldn’t need to alter much of the opening to suppose it was from the latest edition…
There has been much discussion in the last few years about the decline of American power. While American military capabilities remain enormous thanks largely to persistent technological advance and while the American economy remains the most powerful in the world, many observers have noted the discrepancy between capabilities and achievements. As the fall of Indochina, the rise of OPEC and recent events in Angola attest, the United States has had difficulty shaping the movements and outcomes of world affairs.
American power has been inhibited by several factors. First among these has been the increase in the number of actors on the world’s stage. This has led to a greater emphasis on multilateral diplomacy and has allowed many of the new actors, though weak, to form coalitions which have damped the use of American power, particularly in arenas where the resort to force is inapplicable.
Second, the exercise of American power has been inhibited by the increased economic interdependence of the world. Measures aimed at hurting others can boomerang, injuring allies or those whose cooperation we might seek in other areas. Our very interest in preserving the open world economy from cartels or an epidemic of protectionist measures induces us to seek compromises even on efforts, such as the exploitation of the seabeds, which we could undertake on our own.
Hoffmann adds growing Soviet military reach as a third factor – whatever you think of China’s hard power, it’s not quite on the same level yet. Conversely, the economic fundamentals are even less favorable to the U.S. – although that has only reinforced the interdependence effect, for reasons any semi-capable IR undergrad can explain at length. Still, it’s useful for sprightly young(ish) analysts such as those of us who blog here to recall that we’re actually retreading old themes…
by Alex Evans | Jun 14, 2008 | Climate and resource scarcity, Conflict and security, Economics and development
At a seminar held yesterday as part of IPPR’s Commission on National Security, we got onto a discussion of how far aid donors still need to go in sorting out their approach on conflict prevention. The problem isn’t with the specialist departments that deal with conflict within donor agencies – which are often excellent (e.g. the CHASE department in DFID) – but rather with long-term systemic issue areas that just aren’t mainstreamed properly throughout donors’ work. For me, four spring to mind.
First, governance. I’ve written about this at length before on GD, and I still think the same now. When European donors think governance, they think about techie work in the executive branch: public financial management, anti-corruption commissions, that sort of thing. What they overlook is the politics: elections, what happens in the smoke-filled rooms of the ruling party, the process of bargaining between states and citizens. And it’s here that conflict risk – or risk reduction – is often to be found.
Second, resilience. Many donors have great work underway on specific areas of resilience – like peacebuilding, adaptation to climate change or disaster risk reduction. But donors often fail to identify the syngergies between these different kinds of resilience work – as International Alert did in their report on climate adaptation and peacebuilding last year. How about a more joined-up approach across the board that focuses really hard on identifying the sources of resilience in different developing countries, and then working to build them up? After all, about the only thing that’s clear about the next couple of decades is that they’ll be increasingly turbulent. You wouldn’t know it from looking at donors’ country programmes.
Third, scarcity. Disputes over land in Kenya; water as a threat multiplier in Darfur; riots over food and energy prices in more than 30 countries this year alone; the looming shadow of climate change. Scarcity issues are set to become one of the principal obstacles to achieving the MDGs, and a major source of increased conflict risk. Helping partner countries to manage competing claims to scarce resources – at all levels from local to global – should be a core competence in donors’ policy and programme work alike. Is it? Nope.
Fourth, counter-insurgency and fourth generation warfare. Whether you’re looking at the Taliban in Afghanistan, MEND in Nigeria, drug lords in Mexico or organised crime in the Balkans, there are plenty of participants in the ‘global bazaar of violence’ who are interested in hollowing out weak states – not the same as causing them to collapse, as Daniel and I were discussing earlier this week – so as to give them the space and legitimacy to operate as they want. Alas, it’s the military coming up with the really innovative approaches on this – not aid donors.
As should already be clear, these aren’t so much new agendas for aid donors, as cross-cutting ones: involving joining up the dots between current areas of work, being willing to take more risks, and realising that being an effective donor in the 21st century is as much about influence and the quality of your people as it’s about cash.
They also involve forging a lot of new, more coherent relationships: with new donors (like the Gates Foundation); with new country players (like China); and – perhaps most of all – with other parts of government (c.f. DFID and the the Foreign Office).
But here’s a key point: it’s crucial that we don’t throw the baby out with the bathwater.
I always hesitate when I hear people in the UK calling for DFID to be merged back into the Foreign Office, or for the International Development Act to be revised or scrapped. True, there are [numerous] times when DFID needs to interpret its poverty reduction mission with a bit more verve and imagination. But remember why it was necessary in the first place to make DFID independent and to create the Act to protect it.
We do need a more substantive conversation about joining up the dots on aid and foreign policy – both in Britain and internationally – in order to get better at conflict prevention. But before we can start it, there need to be some upfront guarantees of no sliding back to aid being a tool for pursuing narrow, short-term national interests.
by Alex Evans | Jun 3, 2008 | Climate and resource scarcity, Cooperation and coherence, Economics and development
The FT’s Gideon Rachman has a terrific column today mulling over the question that this week’s UN food summit in Rome is likely to sweep politely beneath the carpet: the question of fair shares to scarce global commodities like energy, food and ‘airspace’ for our emissions.
It is all very awkward. China and India are getting richer. And it appears their new middle classes want all the things we want: cars, washing machines, even meat. Here in the west, we have to restrain ourselves from saying: “Stop. You can’t live like us. The planet can’t stand it. And our wallets can’t stand it. Have you seen the price of petrol?”
Global equity is the awkward issue lying behind the world food crisis. In the long run, it will also prove fundamental to discussions on energy and global warming.
Gideon’s clearly right that asking China, India and other emerging economies to stay poor is a total non-starter (politically as well as morally) – but on the other hand (as his article also makes clear), the problem is that a burgeoning global middle class also risks leaving the world’s poor in an untenable position, now that supplies of energy, food, water, land and ‘airspace’ for our emissions are all getting scarce. Moises Naim asked in a recent LA Times editorial whether the world could afford a middle class – he might have asked whether the poor can afford one, too.
On climate change, at least, we’ve known for a while where the debate needs to go. Given that stabilising the climate will necessarily entail sharing out a safe global ‘emissions budget’, we can’t duck the question of how to share such a budget out – and, by extension, how to satisfy the different equity claims of both emerging economies and least developed countries. How to do that? In a nutshell, through enshrining the principle of fair shares to the global common resource of the atmosphere through a process of convergence to equal per capita emission rights by some agreed date (2030, 2050, the day after tomorrow – whatever countries can hammer out). More and more people in the climate debate are now accepting that proposition (Nick Stern being a notable recent convert), and discussion of it ought to figure heavily on the road to next year’s Copenhagen summit.
With food, though, it’s very much harder to see how the principle of fair shares can be operationalised. At this week’s UN food summmit, the demand side effects of changing diet patterns aren’t even being talked about seriously, even though most analysts agree they’re the most important driver of rising food prices.
Still, one starting point would be to get some basic analytical tools up on the web. If I want to calculate my lifestyle’s carbon footprint, there are any number of websites that will allow me to do just that – and to see whether I’m living within or beyond my ‘fair share’ of the atmosphere. But if I look for a calculator to figure out my diet’s “grain footprint” – the amount of wheat, corn and other cereals needed not just for my daily bread, but (more significantly) the meat, dairy products and processed food in my western diet – I draw a blank. As a result, I’ve no way of telling whether I’m taking food out of someone else’s food bowl, or being a responsible consumer and living within my fair share.
True, grain footprint calculators hardly represent a comprehensive global solution. But if global food supply fails to keep pace with demand growth – forecast by the World Bank to rise by 50% by 2030 – then they’re not a bad place to start the discussion.
by Alex Evans | Jun 2, 2008 | Africa, Climate and resource scarcity, Economics and development
I had a long chat with Pascal Fletcher at Reuters on Friday while he was writing this article on the effect of price rises for food and fuel in west Africa, where he’s based. He clearly knows the region back to front, and as his piece makes clear, the outlook isn’t good:
Africa’s cocoa makes the world’s chocolate, its fish, fruit and vegetables reach tables around the globe and its oil powers vehicles and factories from China to the United States. Yet far from benefiting from soaring commodity prices, African states are being squeezed as hard as any by the costs of fuel and food imports. Their desperate moves to cushion the impact for potentially restive populations threaten to wreck already stretched budgets, slashing receipts and swelling state spending.
As far as I can tell from the rough tally I’ve been keeping over the last few months, west Africa’s been one of the regions hardest hit by civil unrest related to food and fuel inflation, and Pascal’s article seems to confirm this. As a result, many governments have been under pressure to subsidise prices for both. Problem is, that doesn’t do their exchequers any good at all – quite apart from the inflationary impact of such measures.
The unplanned contingency measures, on top of global food and oil prices far above what most imagined a year ago, are wreaking havoc with governments’ finances. “This trend is throwing the budget out of gear,” Ghana’s President John Kufuor lamented last month when he unveiled a package of actions to mitigate the price rises …
As I argue in Pascal’s piece, the expense of subsiding goods across the whole economy, coupled with the inflationary impact, are two of the reasons for the current enthusiasm for social protection systems – be they food aid, vouchers or straightforward cash transfers – that are targeted at the poorest people. Expect to hear a lot about such ‘social protection systems’ at this week’s UN food summit.
But there’s a catch, too: in many places, the infrastructure for administering these systems just isn’t in place. Helping countries to get it set up has to be a top priority for donors – starting right now.
