GLOBAL: Less money, less food, more hungry - analysis

Photo: Jaspreet Kindra/IRIN

Recovery from the financial downturn will be slow making it difficult for many countries to import enough food

JOHANNESBURG, 15 July 2009 (IRIN) - If the global economy were to rebound in 2010, sub-Saharan Africa would still be one of the world's poorest and most vulnerable regions, and have more than half its food insecure people, says an examination of the impact of the economic slowdown on food security.

The trade deficits created by the 2008 food price crisis, lagging agricultural productivity, and political instability in countries like Somalia and the Democratic Republic of Congo will make it hard for many countries in the region to recover, said the Food Security Assessment 2008-09 by the US Department of Agriculture's Economic Research Services (ERS).

The UN Food and Agriculture Organisation (FAO), which derived the number from the ERS assessment, said there were now more than a billion people hungry worldwide.

With the full effect of the financial downturn difficult to predict, the assessment developed scenarios for the 70 poorest countries in five regions - sub-Saharan Africa, Asia, North Africa, Latin America and the Caribbean, and the Commonwealth of Independent States (CIS), a regional organization of former Soviet republics - taking into account projections by the International Monetary Fund (IMF) in its updated World Economic Outlook in January 2009.

In the first scenario the ERS projects a drop in export earnings, affecting a country's capacity to import and bringing a decline in food consumption. The dip in export earnings reflects regional declines in economic growth projected by the IMF: 50 percent decline in export growth in North Africa and sub-Saharan Africa, 40 percent in Asia, 60 percent in Latin America and the Caribbean, and in the CIS.

In the second scenario, a 50 percent slump in the capital inflows that finance imports is added to the factors in the first scenario. A third scenario looked at the impact of the slowdown if a full economic recovery were to take place in the rest of the world in 2010.

In Eritrea, Somalia and Sierra Leone, which are highly dependent on foreign aid, food insecurity is likely to deepen

Sub-Saharan Africa

Though sub-Saharan Africa accounts for only 25 percent of the population in the 70 countries, it has 47 percent of the food-insecure people, the assessment noted.

The region has become increasingly dependent on cereal imports, which have risen from around 10 percent of its supplies in the late 1980s to more than 20 percent at present. "Therefore, when international [cereal] prices rise, the ability to import is likely to fall, given the limited financial capacity of the region."

A drop in export earnings, as in the first scenario, would bring a three percent rise in the number of food insecure. Among the worst affected would be countries that have done well economically in recent years such as Angola, which has benefited from high oil prices.

In the second scenario, which takes financial inflows into account, the number of food-insecure people in the region would increase by nine percent, or 36 million.

Cape Verde, Côte d'Ivoire, Lesotho, Mauritania and Senegal are experiencing rising food insecurity because of their growing dependence on imports, while in Eritrea, Somalia and Sierra Leone, which are highly dependent on foreign aid, food insecurity is likely to deepen.

Sub-Saharan Africa's share of food aid has grown "from roughly a third to well over half" of the world total since 1999, noted the assessment.

Asia

Asia is the region least dependent on food imports, and its food-security situation was "good, in relative terms". However, a decline export earnings would affect food security in the region "deeply, with the number of food-insecure people increasing by 11 percent. This comes after the Asian countries experienced the highest export growth relative to other regions (over 10 percent per year since 2000)".

If there is a decline in export growth and a cutback in net capital inflows, the number of food-insecure people in Asia is projected to increase by 13 percent in 2009 - relative to the food-security baseline - driven by the impact of the economic shock in Bangladesh and the Philippines.

Despite its economic strides, a drop in capital inflows into Bangladesh would leave 40 percent of its more than 153 million people food insecure; in the Philippines the number of hungry could jump to around 20 percent of the population of more than 96 million.

The food security outlook in Asia over the next 10 years shows that just over 20 percent of this region's population would be food insecure, largely because of an expected slowdown in population growth.

"After averaging two percent per year throughout the 1990s, Asia's population growth is projected to slow to about 1.4 percent per year through the next decade, thereby reducing pressure on resources," the assessment noted. The food security situation in India, the world's second most populous country, is expected to improve.

jk/he