Since the beginning of the decade, the IMF and World Bank have begun to retract on their statement that the solution to solving the world’s poverty is economic liberalization of low and middle income nations. Originally implemented via Structural Adjustment Loans, these programs, beginning in the 1980’s in Sub-Saharan Africa, promoted economic liberalization via social spending cuts, tariff elimination, and subsidy removal in exchange for high-interest loans. This growth-oriented strategy was developed out of the expectations that a) “trade, not aid” was the best way to promote economic growth and b) economic growth would be equitable and all socioeconomic classes would benefit. This did not happen. As low and middle income nations were liberalizing their economies, high income nations were using their comparative advantage in technology and capital to flood developing markets with cheap food and other commodities.
Since SAP’s have became a waining phenomena, developmental economists have suggested alternatives to these macroeconomic policies to poverty reduction. Beginning in 2000, the Millennium Development Goals sought to reduce poverty, increase education, and promote gender equality, amongst other aims. This microeconomic approach has continued into the present with the Sustainable Development Goals. Similar to the Millennium Development Goals, SDG’s are also a product of UN economists who seek to promote sustainable development through government, private sector, and civilian action. Though these two projects have yet to eradicate poverty all together, they are widely considered to be a more nuanced, effective solution to poverty issues.
While major multilateral institutions are fundamentally changing their approach to the worldwide poverty crisis, their is a simultaneous growth in economic liberalization in other economic sectors. Chief among these issues is the recent growth in international land grabs. Containing 60% of the worlds uncultivated, arable land, Sub-Saharan Africa is a potential breadbasket of the world. Despite the abundance of agricultural opportunity, an estimated 233 million people are undernourished throughout the continent. This stark number is a result of the lack of agricultural technology, competition against foreign imports, and climatic variability.
Foreign nations have begun to seize these facts as an opportunity. Food insecure countries such as China, Saudi Arabia, and South Korea are purchasing millions of hectares of land to begin agricultural projects. Aside from the potential environmental consequences, natives to the land lack formal property rights, thereby allowing these nations to kick them out of their native land. Though these land deals are often done in closed-door settings, various NGO’s have reviewed contracts and found that there is little, if any guarantees that the natives to the land will obtain any benefit from these large-scale land investments. Thus, projects that displace thousands of natives may only end up providing economic benefits to twenty or thirty families.
These large-scale land investments are not just occurring through nation-to-nation transactions. Many private investment firms are seizing on the opportunity as well. Predicting a rise in both land and food prices, private investment firms have begun either purchasing or engaging in long-term leases on vast swathes of land. Similarly, after the 2008-2009 financial crisis, many investors have been placing their money in a variety of assets, as a way to counter against potential volatility in traditional stock and money markets. As population and household incomes increase, the demand for farmland will only increase as well, making farmland an attractive investment.
While development projects have shifted away from macroeconomic and liberalized solutions to poverty, we are simultaneously seeing the corporatization of the global food regime. As often happens in a laissez-faire economy, the benefits of these policies accrue to the few, while more and more suffer the negative consequences.
Citations:
Cotula, L. Vermeulen, S., Leonard, R., & Keeley, J. (2009). Land Grab or Development Opportunity? Agricultural Investment and International Land Deals in Africa.
Cotula, L. (2013). The Great African Land Grab?: Agricultural Investments and the Global Food System. London: Zed Books.
Easterly, W. (2003). IMF and World Bank Structural Adjustment Programs and Poverty. National Bureau of Economic Research.
Millennium Development Goals (MDGs). (n.d.). Retrieved January 28, 2018.
Monbiot, G. (2017, December 11). Mass starvation is humanity’s fate if we keep flogging the land to death.