The share of agriculture in total official development financing declined from 13 percent in to around 10 percent in recent years.
The spread of illegal drug consumption is accelerating, with the number of addicts now reaching millions in several countries. Illegal drug trade, involving billions of dollars, diverts resources, empowers corrupters and destabilizes entire regions or segments of societies. The production of drug crops generates relatively high returns to producers, which poses a major constraint to national actions and international cooperation aimed at constructively containing and reducing drug production.
The only element lacking is the political will to do so. Until governments are willing and politically able to give the highest priority to the elimination of hunger and the poverty that is its root cause, the hungry will remain in developed and developing countries alike. This means winning widespread support among the interest groups that currently exert power and influence and also empowering those groups that, for lack of control over resources or of access to effective political participation, are on the margins of the political and social economy.
During the next ten years, another 1 billion persons will be added. The relationship between population growth rates and economic development is a chicken-and-egg phenomenon. Rapid population growth rates most certainly make economic development and per caput income growth more difficult. But the factors that have been shown to slow the rate of population growth are those associated with broad-based economic development: increasing per caput incomes; rising educational levels; growing employment opportunities, especially for women; and an increase in secure access to food, health services and other basic needs.
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At present, over million people are chronically undernourished because they lack food. Twenty years ago, 80 percent of the population in developing countries lived in rural areas. By the year , nearly 40 percent of the population is expected to live in urban areas. This imposing shift towards a more urban world calls for a different set of institutions, markets, infrastructure and food policies.
These structural changes also modify farm labour supplies and pose important challenges for food security. For example, in sub-Saharan Africa, the steady migration of males to cities and other areas to look for wages or a job in the informal sector makes women responsible for farm work. This long period was also marked by relatively stable commodity prices and increasing import substitution, while official development assistance to developing countries was also on the rise. The developed countries attempted to inflate away the effects of the oil and commodity price shocks by increasing their money supplies.
World liquidity increased further as the major commercial banks recycled the petrodollars deposited by OPEC countries. As a result, real interest rates fell markedly. This enabled them to grow at relatively high rates despite the adverse international environment.
In fact, a significant portion of them were undertaken so injudiciously that they yielded small returns, and the cash flow that they generated could not meet the debt service. Meanwhile, loans continued apace, while both developing and developed countries avoided or postponed adjustment to the first oil shock. Interest rates rose and the United States dollar appreciated.
As a result, many developing countries found themselves caught between a serious and unexpected contraction of capital inflows and a simultaneously large increase in external payments that had to be made with an appreciating dollar. Since the recently expanded foreign debt was primarily to private lenders on a short-term, floating-rate basis as opposed to previous periods when lenders were largely official and lent on a concessional longer-term basis , the hike in interest rates precipitated the debt crisis.
By , many developing countries were paying more in debt service than they received in capital inflows.
A major characteristic of ISI was the relative neglect and, in some cases, discrimination against agriculture, both in terms of price incentives relative to other sectors and in the allocation of public investment. Macroeconomic policies overvalued exchange rates and trade policies border protection of industry discriminated against agricultural producers by shifting the internal terms of trade away from the farm sector. Sectoral policies that aimed at subsidizing agricultural producers were usually unable to compensate for the negative effects of unfavourable macroeconomic and trade policies.
The economic recession associated with the crisis deprived the most food-insecure of employment opportunities.
Meanwhile, an already overextended public sector could not meet its development and social safety-net objectives in the face of decreased domestic savings and constant cash outflows to meet debt service and repayments. Although most indicators of social performance literacy rates, disease eradication or at least suppression, longevity, secondary-school attendance, infant and childhood mortality and population growth rates continued to improve for the developing countries as a whole, for some, especially in sub-Saharan Africa, they deteriorated.
Some 30 million people in developing countries are landless and an additional million are near-landless, and numbers in this category are growing throughout the developing world, especially in South Asia. Landlessness and near-landlessness are prime determinants of food insecurity in rural areas. Resources to accommodate the poor are shrinking with the expansion of arable land growing at an inferior rate to that of the rural populations. In East Asia, the late s and the s brought sweeping land reforms in Japan, the Republic of Korea and Taiwan Province of China which helped to stimulate production rental units became ownership units resulting in peasants having more interest in producing and equity.
It was averred that, in Latin America, the effect might be similar. Earlier reforms in Latin America had occurred in Mexico, Bolivia and Guatemala, but the example of Cuba and certain foreign-aid policies of the United States, which conditioned foreign aid on land and tax reforms, returned the issue to centre stage where it remained for the next few decades. By the s, issues of a dirigiste land reform were displaced by the idea that the land market could supply the peasantry with the property needed, and there was some effort led by Mexico in to marketize land reform.
Currently, international agencies, worried that very little land is actually going into peasant ownership, are realizing that some direct subsidies for land purchase may be necessary. They occurred often where peasant land-hunger complaints were most vociferous and to a large amount of publicity and fanfare.
But after land was distributed, other inputs were generally not provided on terms the new landowners could afford and production credit loans tended to dry up. While some studies showed that production on the areas turned over to the peasants was at the same level, if not a superior one, as that which had existed prior to reform, most production gains tended to occur on the smaller reserves of landlords who engaged in intensification of their farming programmes in an effort at income maintenance.
Alternatively, they occurred in the commercial sector where farmers were usually not expropriated from if they were good producers.
Thus, the new peasant landholders were not afforded, by the institutions of the time, a very propitious beginning to their farming careers. Furthermore, resident farm labourers, the highest-status workers in Latin American agriculture, were usually apportioned the land while the campesinos farmers who had no land access infrequently obtained property, thereby dampening the income-distribution effect of land reform.
Moreover, these new landowners were less willing than the former landlords to hire landless campesinos at the going wage. This economic populism tended to instigate inflation, which lowered the incomes of the rural and urban poor. In general, recent land reforms in developing countries have increased food security, but most increases have not come from the peasant sector that received the land Thiesenhusen, Several interrelated forces contributed to the abandonment of this paradigm.
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Second, the disappointing performance of most developing countries during the late s and early s revealed the susceptibility of their economies to external shocks and the weakness of the policies meant to manage them. It was overwhelmingly decided that freer markets promote more efficiency and provide for better growth prospects. Today, the widely accepted development paradigm emphasizes macroeconomic equilibrium and market-determined resource allocation. Now, in the environment of economic liberalization, reduced government intervention and market-led policy orientation, the utility of a dialogue between governments appears more circumscribed.
This is particularly true for problems that, while common to many countries, do not transcend national borders and therefore do not requir e international cooperation and coordination for their solution. Governments today can legitimately negotiate international codes of conduct, behaviour protocols, market regulatory agreements, multilateral assistance levels and the like in cases of international market failure. They can agree to cooperative action against international threats such as crime and terrorism.
They can agree on the rules of the game and the use of dispute settlement processes in such existing fora as the World Trade Organization WTO or the international court. But when it comes to basic resource allocation, accumulation, production and consumption within the framework thus set, governments have, in principle, abrogated the major responsibility to market mechanisms while retaining the responsibility and authority for ensuring that the formal and informal institutions needed to allow those mechanisms to operate freely and fairly are in place and functioning.
Further economic, trade and political liberalization, and, equally as important, institutional development, will need to take place before this transformation is complete. First and foremost it means that food security is a national, local and individual responsibility. Only national governments have the ability to create the stable political, macroeconomic, legal and regulatory environment within which private-sector activities can flourish. It is governments that have the responsibility, albeit with assistance from international agencies and non-governmental bodies, to provide the safety nets needed to protect those vulnerable groups in society that have no recourse to the resources needed for their own support.
Organizations lending to debtor countries conditioned their loans on such policies as macroeconomic austerity and currency devaluation. In addition, a series of structural measures to remove supply-side economic bottlenecks was imposed, including the removal of administered input and output prices and drastic reductions or elimination of subsidies for various sectors including agriculture. A large number of developing countries continue to implement stabilization and structural adjustment programmes that were begun in the s.
The resultant belt-tightening and austerity were often associated with wrenching drops in real incomes and levels of living, primarily hurting those least able to adjust.
Some countries rebelled at the severity of the adjustment measures imposed by both the IMF and the World Bank, often in the face of civil unrest in opposition to the imposed austerity. By the early s, the World Bank and the IMF began to show more flexibility in their approach to stabilization and structural and sectoral adjustment, recognizing that unless reforms were both appropriate for the specific conditions and could receive the political support of the people, through proper attention to the social dimension, they were unlikely to be implemented for long enough to work.
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Most disturbing is the situation in sub-Saharan Africa, where, although its absolute external-debt level is the lowest of the developing regions, it is the highest as a proportion of regional GDP percent in , and increasing. The debt problem, not yet resolved despite numerous debt relief and reduction initiatives, has many deleterious implications for food security. Debt-servicing obligations reduce the ability of countries to import food and non-food items that could increase domestic food production and consumption and constrain resources that might otherwise be available for financing development and social welfare schemes.
The debt problem has evolved in nature and characteristics. The crisis of the s, mostly in middle-income countries, initially concerned commercial debt and, as such, was perceived as a threat to the stability of the global financial system. Private financing virtually stopped for several years before rebounding forcefully, but much more selectively, in the s. The Brady Plan, among other initiatives, contributed towards alleviating the debt burden in a number of countries. The s have seen a different type of debt problem, which also had its roots in the s, that of low-income countries borrowing from developed-country governments and multilateral creditors.
Much of this lending took place to help poor countries cope with falling export commodity prices, rising world interest rates and escalating repayment schedules to commercial banks. While Latin America and the Caribbean and Asia have seen an improvement overall, serious difficulties are also being faced by a number of countries in these regions as well. Who benefits and who loses depends on the income, resource and education profile. In the short term, the stabilization effects dominate.
Reductions in the social safety nets including cuts in the public payroll and welfare-type programmes that benefit the poor and higher prices for imported items including basic goods such as food, medicines and fuel because of devaluation have, at least, short-term detrimental effects on the weakest segments of the population.