Thursday, May 8, 2008

Food prices upping general price level

The central bank of Nepal reports that CPI has shot up to 7.2% in the first eight months of the current fiscal year. Reason: substantial increase in prices of rice, oil, and ghee. I guess I don't have to explain the relationship between rising food prices and general price level.

According to the report, food and beverages became dearer by 9.4 percent over this period, as the prices of oil and ghee increased by 27.3 percent, grains and cereal products by 14.9 percent and pulses by 13.7 percent.

At a time when economic growth rate is just over 2%, population growth is 2.2%, and inflation at 7.2%, one can easily imagine how fragile is the Nepali economy. But, things are going to get better, if the upcoming government led by the Maoists boost individual and market incentives. Already, foreign exchange reserves are record high (at Rs181.98 billion) and remittances grew by 28.1%. On top of that, travel receipts are up by 76.3%. Things are getting better but management of fiscal and monetary balance requires prudent policy choices.

Good papers

Understanding the dimensions and dynamics in underserved settlements in Colombo

This study examines the dimensions and dynamics of urban poverty in Sri Lanka to design a monitoring system for the Colombo Municipal Council (CMC) Participatory Improvement of Underserved Settlements (PRIMUSS) programme. It analyses poverty as a multidimensional, dynamic phenomenon at the settlement and household level. Recipients overwhelmingly defined poverty in terms of income and earning capacity, but focus rather on the mix of income sources than on the magnitude of income.
With regard to the dynamics of poverty the study discusses:

  • the use of multiple sources of income to achieve a stable flow of income
  • the importance of foreign employment and self-employment
  • lack of space as a major constraint on well-being and main push factor for migration
  • other housing issues
  • land tenure rights and their positive impact on security, households' asset base and access to services
  • enumeration cards as a viable alternative in the perception of residents
  • availability of services and infrastructure, access to facilities
  • Community Bases Organisations (CBOs)as a contributing factor to an improved standard of living
  • the role of social, political and institutional networks as well as livelihood networks and networks based on illegal activities
  • substance abuse and illegal activities as creating both costs and income
The study proposes new areas of CMC involvement:
  • giving priority contracts to skilled and semi-skilled trainees and encouraging underserved settlement residents also to draw from this labour pool
  • designing pro-poor financing schemes for the provision of services and infrastructure
  • developing and enforcing health related building standards, particularly for toilets
  • developing community-based maintenance systems
  • replacing the word "pura" in the settlement name with Mawatha, Patumaga, etc to increase the possibility of accessing better quality schools
  • capacity building for CDCs
  • encouraging engineering / technical staff to form close links to specific settlements

Haitian food riots unnerving but not surprising

Beginning in early April, Haiti was gripped by a nationwide mobilisation to protest against high food prices, reaching a crescendo on Thursday the 10th, as thousands of people took to the streets. Some protesters burned tires, blocking national highways and city streets in Port-au-Prince, and a few looted local stores. Clashes with police and United Nations troops resulted in an official count of five dead. The media covered these events during the days of the crisis but offered little information to explain the protests.

This article argues that the loss of life, property damage and the resulting climate of fear, are only the most visible manifestations of a crisis with much deeper roots. Both the Haitian government and the international community, it is asserted, have played important roles in creating the current crisis.
Amongst points argued are:

  • the events in Haiti need to be viewed in context and not simply as "Haitian exceptionalism" based on the stereotypic narrative of Haitians being violent, unruly, ungodly, and dangerous
  • Haiti needs to be seen as an early warning, the country's geopolitical position - especially its close proximity to the United States and level of dependence on foreign aid - highlights the contradictions and flaws in the system of international aid and growing global food crisis
  • long-term solutions will have to address both the world's dependence on oil and the inequalities in distribution within the global system

The author argues that the Jubilee Act - a complete, immediate cancellation of the debts of 67 southern countries, of which Haiti is one, without conditionalities - offers one solution to relieve the pressure of neoliberalism and aid Haiti's recovery. To unravel the inequalities of this contemporary neoliberal world system, the author concludes, it is best to start with the thread that is already loose.

More from Eldis here.