Climate change will 'overwhelm governments'

Anger over soaring food prices was a major factor in the Egyptian uprising and the United Nations’ top climate official warned this week that without action on climate change, more governments will fall and the danger of military conflict will grow.

Christiana Figueres told a top-level meeting of defence chiefs and strategists in Spain that climate change-driven drought, falling crop yields and competition for water were fuelling conflict and without aggressive action to reduce emissions causing global warming they would increase. Ms Figueres said:

It is alarming to admit that if the community of nations is unable to fully stabilise climate change, it will threaten where we can live, where and how we grow food and where we can find water... In other words, it will threaten the basic foundation – the very stability on which humanity has built its existence...

All these factors taken together mean that climate change, especially if left unabated, threatens to increase poverty and overwhelm the capacity of governments to meet the basic needs of their people, which could well contribute to the emergence, spread and longevity of conflict.

The world’s food supply is already increasingly fragile, as a result of extreme weather events affecting crop yields. In January world prices rose for the seventh successive month, up 3.4% from December, to the highest level since the UN Food and Agriculture Organisation (FAO) began measurements in 1990.

And more increases are on the way. The FAO issued a special alert this week that provinces of northern China, the country’s main wheat producing area, are suffering a drought that could destroy up to one third of the summer wheat crop. The absence of snow cover and ferociously low temperatures, means dormant wheat will be killed by frost. Not only crops but 2.57 million people and 3 million livestock animals are affected by a shortage of drinking water.

The weather is the same in the US Great Plains and Midwest. Kansas and Oklahoma have had has less than half of normal rainfall in January and there is intense cold. China is the world’s biggest wheat producer but also its biggest consumer. If China starts buying wheat in the world market, prices will be pushed even higher.

FAO economist and grains expert Abdolreza Abbassian warned:

High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food.

But for capitalist agri-business, including companies whose activities are financed by Chinese and Saudi sovereign wealth funds and by investment funds launched by the likes of Goldman Sachs, high food prices are good news.

Delegates attending the World Social Forum at Dakar in Senegal, cheered wildly at news of the fall of Mubarak. The global land grab was their main focus with representatives of peasant and worker movements from across the world reporting on their struggle to hold on to land and livelihoods.

Veteran food campaigner Susan George highlighted the situation in Europe, where unemployment is rising along with food price inflation. Europeans, she said, are beginning to learn what it is to live with an IMF structural adjustment programme.

Of course whilst the UN may find toppling governments a terrifying prospect, the majority of the world’s people would be delighted to get rid of rulers whose ruthless support for the financial system overwhelms any concern for their populations.

People know the priority is neither climate change nor hunger, but kick-starting growth and restoring profitability. The market in food offers one of the best opportunities to do that, since the onset of the global economic crisis. The price of restarting the global capitalist economy by expanding the globalisation of land and farming will be hunger affecting more and more of the world’s population. So help work out alternatives at our “Beyond Resistance” teach-in Kicking capitalism's growth habit - building a sustainable economy on February 26.

Penny Cole
Environment editor
www.aworldtowin.net

Uprisings deepen capitalism's crisis

Attempts to solve the global debt crisis have sent food prices soaring, driving impoverished masses onto the streets throughout the Middle East. Now a wave of political revolutions dashes remaining but false hopes of economic “recovery”.

Oil prices are rising sharply as the upheaval that began in Tunisia and now grips Egypt threatens to spread to major producers Algeria, Libya and even Saudi Arabia. Stock markets are jittery as they take in the consequences, including any threat to oil tankers which use the Suez Canal.

In Egypt, workers, the unemployed, young and old, artists and athletes, Christians and Muslims have united in their determination to bring the 30-year old autocratic regime of Hosni Mubarak to an end. His determination to hang on until September pleases neither the Egyptian people nor the White House, which fears the consequences of an unstoppable revolutionary process the longer Mubarak’s regime clings to power.

This fact is recognised by the International Monetary Fund too, which helped impose harsh market “reforms” on Egypt in the 1990s, which have only deepened inequality. IMF chief Dominique Strauss-Kahn warned governments to tackle economic strains or risk instability and even war.

“This protest won’t end in North Africa; it will spread in many countries because of high unemployment and increasing food prices,” Hamza Alkholi, chairman and chief executive of Saudi Alkholi Group, a holding company investing in industrials and real estate, said in an interview in Davos, Switzerland.

As Nouriel Roubini, the leading economics analyst who forecast the global financial crash, notes:

What has happened in Tunisia, is happening right now in Egypt, but also riots in Morocco, Algeria and Pakistan, are related not only to high unemployment rates and to income and wealth inequality, but also to this very sharp rise in food and commodity prices.

In Egypt, 40% of the 80 million people live on less than $2 a day. Prices of basic foodstuffs have soared by over 17%, putting basic necessities beyond the reach of many. The average Egyptian now spends 40% of his or her income on food while economists put the unofficial jobless rate at about 25%.

The worldwide surge in commodity prices is being driven by stock markets and investment banks desperate to find new areas for profit-taking. With the 2008 financial meltdown still unravelling, speculators have turned to basic commodities. They have used funds pumped into the system by the US Treasury and the Bank of England, also known as QE or “quantitative easing”.

QE was designed to boost economic growth. Instead, it has helped to create a 32% increase in the average cost of food in the second half of 2010, according to the UN Food and Agriculture Organisation (FAO). Wheat prices alone jumped 70% between June and December.

Despite Mubarak’s televised claim that the protests had been manipulated by political forces this is a completely Egyptian, largely secular, wholly grass roots movement. With its roots in a strike by textile workers in April 2008, a popular revolution is under way. The country is at a standstill as events unfold. The economy is paralysed. People’s committees have taken charge of the security of their streets and neighbourhood.

Even when Mubarak shut down the internet and mobile phone networks last week the 70,000 strong April 6th Facebook group of mostly young people continued to organise the protest, calling for the “million man march” that brought more than two million Egyptians onto the streets of Cairo, Alexandria, Suez, Sinai and Upper Egypt demanding that the president should leave.

People on the street demand change to “every element of the system” but lack a developed leadership that can transform the Egyptian capitalist state. As soaring prices and unemployment make clear, revolutionary social and economic change is required along with the end of the Mubarak dictatorship.

Gerry Gold
Economics editor
http://www.aworldtowin.net/