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Will Our Economic Collapse Cause the Death of Millions Abroad?

As the wealthier nations cease investing in the developing world or acquiring its exports, the crisis is hitting them with a vengeance.

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In Asia, the report indicated, "severe drought is reported in Northern and Western China, where precipitation levels have been registered at 70-90% below normal." Some 9.5 million hectares (23.5 million acres) of winter wheat — 44% of the total area planted -- are reported to be seriously affected in the Hebei, Shandong, Henan, Shanxi, Anhai, Shaanxi, and Gansu provinces. The winter wheat prospects are considered somewhat better in India, but there, too, rainfall has been scarce in recent months, "with 30 of the 36 meteorological subdivisions reporting significantly below-normal rainfall." Put this together, and it appears that cereal production in the world's two most populous nations could be substantially lower in 2009 than in previous years. The resulting rise in grain imports will push up market prices around the world.

Conditions are even worse in the southern part of South America, where a severe drought has gripped Argentina and southern Brazil. In Argentina, wheat production in the 2008-09 growing season, now ending, was the lowest in 20 years and virtually half the record achieved in 2007. This means that wheat exports by Argentina -- one of the world's leading producers — will be approximately 60% less than the average for the past five years, sharply reducing supplies available on world markets and pushing world prices even higher.

Corn production is also expected to decline throughout the southern part of South America. "Scarce and erratic precipitation, hot temperatures and relatively high prices of inputs [many derived from petrochemicals] have delayed planting operations and in some cases preventing planting altogether," the FAO report noted. Losses due to drought are reported to range between 40 and 60% in many producing areas of Argentina, and an agricultural emergency has been declared in the departments of Chaco, Entre Ríos, and Santa Fe. Similar conditions are reported in southern Brazil, leading to forecasts of crop declines there as well.

In other key producing areas, water supplies may be adequate but farmers are unable to plant sufficient crops for lack of seeds, fertilizers, and other essential inputs. This is especially true in the so-called "Low-Income, Food-Deficit Countries" (LIFDCs) -- nations that are both poor and persistently hungry. One example is Zimbabwe, "where despite satisfactory weather conditions, supplies of quality seed, fertilizer, agricultural chemicals and tillage power and/or unaffordable prices for most agricultural inputs…have put severe constraints on maize [corn] production."

Other countries facing severe food insecurity, due to some combination of poverty, drought, storm damage, and internal disorder include Afghanistan, the Central African Republic, Chad, the Darfur region of Sudan, Democratic Republic of Congo, Eritrea, Ethiopia, the Gaza Strip, Haiti, Iraq, Myanmar (Burma), North Korea, Somalia, and Tajikistan. In these and 17 other LIFDCs, a significant proportion of the population faces persistent hunger, malnutrition, or starvation. This list is sure to grow, moreover, as the effects described in the World Bank report begin to make themselves felt in the months ahead. With more people falling into poverty around the world and food prices rising due to declining crop yields, the numbers of those experiencing food insecurity is bound to grow.

Regime-Threatening Unrest

As these effects ripple through the developing world and millions upon millions of people face increasingly harsh conditions, social and political unrest of all forms will increase. Such unrest, involving angry protests over plants closings, mass layoffs, and government austerity measures, has already erupted in Europe, Russia, and China, and now threatens to spread to other areas of the world. Until now, such disorder has been limited to urban riots and rock-throwing incidents, but it is easy to imagine far more violent forms of turmoil -- including the outbreak of armed rebellion or civil strife. This danger was raised in a third report worthy of attention, an annual threat assessment delivered by the Director of National Intelligence, Admiral Dennis C. Blair, to the Senate Select Committee on Intelligence on February 12.

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