Monday, May 12, 2008
Prices of staple foods have risen by more than 50 per cent over the last six months, causing riots from Cameroon to Burkina Faso, Haiti and Egypt and threatening to push 100 million people into poverty.
Developing countries complain about the farm subsidies (some 29% of farmers’ income in the OECD) in developed countries and rich countries complain about the trade barriers put up by developing countries against manufactured goods: but the biggest barriers of all are between developing countries, particularly in Africa, protecting inefficiency, high prices and corruption.
UN Secretary-General Ban Ki-moon recently condemned protectionism: “International grain markets must remain open and functioning normally… beggar thy neighbour food wars cannot, in the long-run, help anyone.”
The share of developing countries in world trade grew from 29 per cent to 37 per cent between 1996 and 2006, while trade itself was doubling – a massive increase that could be improved by more trade, held up by the stalled Doha Round at the World Trade Organisation.
While humanitarian aid saves lives in disasters, development aid simply strengthens trade-distorting policies and corruption in both developing and developed nations.