Tag Archives: global food crisis

Five Stories You Might Have Missed

President Barack Obama is in Moscow today, meeting with Russian President Dmitry Medvedev to lay the foundation for a new nuclear arms control agreement to replace the Strategic Arms Reduction Treaty, which expires in December. In an interesting twist to the meeting, Obama appears to be attempting to improve relations with Medvedev, leaving some to speculate that he is signaling the interest of the United States to work with Medvedev rather than Prime Minister Vladimir Putin, who most observers believe holds the real political power in Russia.

In news from outside the Moscow meetings:

1. Rioting by ethnic Uighurs in Xinjiang, China, has left 140 people dead. Protests broke out in the isolated region in western China over the weekend after police broke up an anti-discrimination protest in the capital, Urumqi. Tensions between Han Chinese and Uighurs had been increasing over the past year, as an oil boom in the Muslim-dominated region led to a massive increase in Han immigration. Security was increased in the region in the run up to the Olympic Games in Beijing last summer, but tensions continued to mount, culminating in this weekend’s violence.

2. Two protestors were killed and several were wounded in Honduras over the weekend. The protestors were awaiting the return of deposed President Manuel Zelaya, who was expelled by the country’s military last week. On Sunday, he attempted to return to Honduras from Costa Rica by plane, but his plane was unable to land. As a result of the coup, Honduras has been suspended from the Organization of American States, and the country faces the risk of future formal and informal sanctions, including risking sharp declines in foreign direct investment and reduced access to international credit flows.

3. The Movement for the Emancipation of the Niger Delta (MEND) has stepped up attacks on Nigeria’s oil infrastructure, following an offer of amnesty from the government. Nigeria’s President, Umaru Yar,Adua, had offered a 60-day amnesty to militants in the region, hoping the offer would bring to a close attacks in the oil-rich Niger delta. But militants appear to have rejected the offer, instead launching a new round of attacks. At issue is the distribution of benefits from the oil industry. The Niger River delta region is one of Nigeria’s poorest regions, despite being home to the vast majority of the country’s oil wealth. Groups living in the delta region are seeking a larger share of the oil revenues and greater autonomy from the Lagos-based government. The conflict has a long history, predating Nigerian independence in 1960. But the most recent phase of the conflict dates to 2006, when MEND launched its attacks.

4. The G8 is preparing to launch a new food security initiative this week, pledging more than U.S. $12 billion over the next three years to support the program. The plan marks a dramatic shift in U.S. policy, which historically has emphasized the provision of emergency food aid sourced from American farmers rather than efforts to expand production of foodstuffs in the developing world. However, the recent global food crisis underscored the vulnerability of global food stocks. With an estimated 1 billion hungry people worldwide and the continuing global financial crisis, observers fear that the global food crisis may yet re-emerge.

5. Indian Finance Minister Pranab Mukherjee delivered the country’s new budget on Monday. The budget, which includes sharp increases in infrastructure spending and new protections for Indian farmers, immediately proved unpopular with investors. India has suffered from a slowdown in economic growth resulting from the global economic crisis, and the new budget would expand the country’s fiscal deficit to as much as six percent of gross domestic product. Nevertheless, the new government appears to be committed to is program of “inclusive growth,” moving forward with privatization and liberalization but maintaining protections for the country’s most vulnerable populations.

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Five Stories You Might Have Missed

The global economic crisis continues to expand.  Despite the announcement of a tentative agreement on a $827 billion stimulus package in the U.S. Senate and announcement of a $200 billion lending facility by the U.S. Federal Reserve intended to encourage more lending by banks and credit card companies, the economic numbers continue to decline.  Despite being relatively insulated from global markets, Brazil announced a large slump in output and a decline in jobs last week.  Following an announcement that the national economy contracted by 4.6 percent in December—the largest contraction since reunification in 1990s—and more than 2 percent last year, the German Economic Minister, Michael Glos, offered to tender his resignation.  Many observers are also concerned that some of the stimulus packages proposed by national governments may rekindle protectionist measures.  (Indeed, the Financial Times now carries a special section, updated regularly, on “The New Protectionism.”)   

In news from outside the financial crisis last week:

1.  In the first major foreign policy speech of the Obama administration, Vice President Joe Biden proposed to “press the reset button” on relations with Russia, noting that despite policy differences in many areas, the U.S. and Russia could still work together on areas of mutual interest and concern.  The conciliatory tone did not include a review of the U.S. missile defense system, which has angered Russia.  In recent weeks, the Russian government has announced a series of initiatives, including plans to establish naval and air bases in Abkhazia, an air defense treaty with Belarus, and a collective security organization which includes many of the former Soviet republics.

2. A Pakistani court last week released Abdyl Qadeer Khan from house arrest.   Khan is the nuclear scientist responsible for the development of Pakistan’s nuclear capabilities.  He is also believed to have played a key role in the proliferation of nuclear equipment and know-how to North Korea, Iran, and Libya.  Khan’s role in the Pakistani nuclear program made him a national hero, and many Pakistanis believe the evidence against him was fabricated.  But under threat of sanctions, the Pakistani government placed Khan under house arrest five years ago.  His release was greeted by disappointment from the United States and France.  Despite the move, Pakistan is still hoping to woo more aid from—and potentially a closer relationship with—the United States.

3.  With elections for the Israeli Knesset scheduled for Tuesday, polling over the weekend suggested the race would be much closer than anticipated.  Early polling had suggested that the center-right Likud party would cruise to an easy victory, as most Israelis were identifying security as their primary concern and Likud was seen as strong on security.  But recent polling data suggests that neither Likud nor the center-left opposition Kadima party will win a majority, forcing either to enter into negotiations with minority parties to form a government.  Meanwhile, polls from Gaza show a sharp spike in support for Hamas following Israel’s three-week military offensive in the Palestinian territory,  suggesting that Hamas may actually have been strengthened by the campaign.

4.  The longstanding drought in Argentina continues.  The drought, the worst in nearly fifty years, threatens the collapse of Argentina’s agricultural exports.  As one of the world’s second largest exporter of agricultural commodities and livestock, the projected collapse of exports from Argentina threaten global food supplies.  World food prices had declined form their record highs set in 2007-08 in part on projections of increased production from Argentina.  Global market prices for rice, wheat, and soy have already increased 20 percent in the last two months, and with declines now projected for Argentina’s wheat, corn, and soy output, world prices are projected to continue to increase.  In an unrelated development, the Chinese government declared an emergency in response to drought conditions in central and northern China.  The Chinese drought undermined wheat production.

5.  Relations between British Prime Minister Gordon Brown and French President Nicolas Sarkozy stumbled late last week after Sarkozy declared that Brown’s proposal to temporarily cut the value-added tax in an attempt to stimulate the economy would have “absolutely no impact,” arguing that Britain “doesn’t have any industry left” and its banks were “close to ruin.”  Brown is already facing strong domestic opposition from the opposition Conservative Party, whose leader, David Cameron, sized on the French president’s comments.