NationStates Jolt Archive

http://service.spiegel.de/cache/international/spiegel/0,1518,413248,00.html
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But this could soon change. If experts with the World Food Program and the World Bank have their way, future donations for natural disaster victims will no longer depend on the whims of private donors or the political needs of governments, but on agreements with international financial corporations. The plan is to create famine insurance for the Third World.

In other words, the capital markets will jump in where donations tend to be insufficient and an insurance policy will protect against draught-induced malnutrition. High finance instead of alms.
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Hmm...this is interesting. Do you think there is a future to this? Use international finance, huge MNCs, speculators and all the rest of the "roaches" to save millions of lives?

Hmm...this is interesting. Do you think there is a future to this?
Yes. If circumstances beyound your control result in your not having enough to eat, food aid should not depend on how generous donors feel or the fact that no one came and videoed your starving children.

Sounds pretty awesome. Still, you do have to buy the insurance. Even if you do it with donations from the UN and such, I don't know how different it will be from the status quo.

Still, who knows? Might work out, as long as the big financiers show some honesty....

...I don't know how different it will be from the status quo.
The difference is you get help when you need it, not just when Micheal Jackson sings a song about it.

I think this is a excellent idea for two main reasons:

First, food aid to these places does not work. It either arrives too late, in insufficient quantity, or in too much quantitiy with the general outcome being that the price for foodstuffs in the area is depressed severely and artificially (after all, food aid is the worst kind of dumping...how can you compete with something that's free?).

The result is that farmers are put out of business and the overall supply of food is greatly reduced resulting in severe price spikes and shortages after the aid is lifted and a continued dependence on aid for food security. The side effects like unemployment and social disorder further worsen the situation and destabilize all sectors of the public and private sectors.

Secondly, insurance to farmers and rural inhabitants addresses a serious shortfall in the developing world; namely, the lack of financial infrastructure and a regulated system of microfinance to spur entrepreneurial development and productivity growth in rural areas. By providing an insurance program, the market and infrastructure are created for the establishment of a rural financial system with the result being stronger and more balanced economic growth in rural areas. Also, the market is allowed to function normally and provides for balance of supply and demand; in the event of a serious shortfall, the insurance helps to cover the food needs of the population without the dumping or unreliability of food aid.

This is an excellent opportunity to jumpstart microfinance and rural economic growth in Africa and other places where the rural economy is lagging due to the lack of infrastructure. The result will be stronger overall economic growth, more balance between urban and rural income, improved food security and the evolution of homegrown financial and entrepreneurial sectors to the vast benefit of the domestic economies of the Third World. This will increase their economic sustainability and make them more influential in the world economy with the result being an overall improvement in their ability to manage local capital markets and better ability to negotiate in international trade and policy actions.

Hopefully, the side effects of a healthy economy and dependable food supplies will also come to pass and reduce the cycle of wars, oppression and instability that have dogged the Third World nations since the end of the colonial era.