Author`s name Timothy Bancroft-Hinchey

Financial speculation and world hunger

World GDP in 2013 should reach the amount of 74.1 trillion current dollars. With 1.1 billion inhabitants, the share of the richest economies in the "cake" of production of goods and services should be 49.2%, with a per capita income of more than $ 41 000 in terms of power parity purchase .

Marcus Eduardo de Oliveira (*)

Across the planet, per capita income for the other 6 billion people will reach $7,400 (ppp). Thus, the "cake" of the world economy is growing and is increasingly distorted in terms of access to what is produced... and will become increasingly pronounced. While the "rich side" of the planet continues to receive financial aid, in the "poor side" problems abound.


In April 2009, during a meeting in London, the member countries of the G-20 (the 20 most advanced economies) promised vulnerable countries the importance of 1.1 trillion dollars. After four years, only 5% of that figure "landed" in the coffers of the poorest economies, while in the same period, $18 trillion was injected into the veins of financial institutions of more advanced countries.


After the aid package for Greece, Portugal and Ireland, Spain is now asking for help. The countries of the Eurozone now move to shore up the Spanish economy with up to 100 billion euros in an attempt to recapitalize the banking sector. Where will the money come from? The European Financial Stability Fund (EFSF) and the European Stability Mechanism (ESM).


Notwithstanding this, international speculative financing moves in terms of 3.5 trillion dollars per day, an amount 40 times greater than the monetary value of transactions of goods and services worldwide. After the international financial crisis erupted in 2008, speculators withdrew funds from high risk assets betting on appreciation of commodities like pulling food prices up, which resulted in more difficult access to food, particularly in areas most affected by hunger.


In this way, on one hand, some gorge themselves on dollars in the coffers of international usury, while the others suffer 1 billion hungry and empty stomachs. Of that 1 billion people (young, old, poor and miserable) hungry, 180 million (almost the whole of Brazil) are children (under age 10). Of those, 11 million are buried every year.


While discussing ways to provide monetary assistance to incompetent international bankers, the world chalks up 25 million deaths due to AIDS.


While the sharp teeth of speculators act freely, set loose in the financial markets in search of higher interest rates and the appreciation of commodities, bodies are tumbling to the ground by lack of access to drinking water and chronic malnutrition - every 3 seconds a person dies of hunger. Only in Somalia, the United Nations estimates that 3.9 million people are starving, equivalent to 40% of the population (2011 data).


However, it suffices less than 0.5% of world GDP to end once and for all this madness called hunger and malnutrition. Since there is a Financial Stability Fund, why not create a Fund for the Support against Hunger and Malnutrition? Since there is a stability mechanism to safeguard banks, why has no one thought to create a mechanism for Morality decreeing an end to poverty and misery in the world?

(*) Economist, expert on International Policy and Master USP.
Professor of economics at UNIFIEO and FAC-PHYTO (São Paulo)
prof.marcuseduardo @ bol.com.br

 

Portuguese version

Pravda.Ru

Translated by Olga Santos