Latin America's poorest hit by food price rises

[Judi Lynn]

Latin America's poorest hit by food price rises
Mon May 2, 2011 12:01am EDT

May 2 (Reuters) - Sharp increases in food prices will hit poorer Latin American countries like Bolivia, Dominican Republic, Guatemala and Honduras the hardest, raising their inflation rates by more than 5 percentage points this year, according to a new report released on Monday.

The report by the Inter-American Development Bank, which focuses on Latin American and the Caribbean issues, said countries hardest hit were those where food makes up a large part of their overall inflation basket and they have limited or no exchange rate flexibility to fall back on.

Countries with flexible exchange rates such as Brazil, Colombia and Uruguay are able to cope better with food price rises as long as they allow their currencies to appreciate and are willing to raise interest rates, the report said.

Brazil and other large economies in the region are already struggling with currency appreciations caused by a surge in private capital inflows they blame on super low interest rates in sluggish advanced economies such as the United States.

More:
http://www.reuters.com/article/2011/05/02/latam-iadb-food-idUSN2926402920110502?rpc=401

[Peace Patriot]

1. Beware: This is a Rotters article and its expert is the IADB, a U.S.-dominated bank

for making development loans to Latin America and the Caribbean. The IADB has toxic assets and accountability issues. See below*.

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The IADB economists noted that if food prices remain at current highs, Bolivia, the Dominican Republic and Honduras should see the most significant rise in their inflation rates of more than 5 percentage points this year. --Rotters


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Interesting that the U.S. and its banksters are targeting Bolivia for inflated food prices. That's one government that the U.S. would like to see toppled. On the other hand, they toppled the government of Honduras, which is now a full-on U.S. client state (more U.S. military bases going in; outright fraudulent election run by the U.S. State Department--the rightwing oligarchy won, of course). They must be targeting the unions, which continue to agitate for reform in Honduras--the goal being to starve them out.

And what is most interesting is they don't mention Venezuela, which they regularly ream for its inflation rate and anything else they can get a handle on to make the Chavez government look dictatorial, incompetent, whatever "talking point of the day" they can think up, however contradictory. Venezuela has oil-profit subsidized food stores all over the country, to ensure access by the poor to adequate food and they come down like a ton of bricks on supermarket chain price gougers and food hoarders. They put people first, not profit. THAT is the solution to price manipulation by the rich--kick their overfed butts! Venezuela also prints the constitution on the grocery bags in the subsidized food stores to emphasize that food, water, housing, education and health care are human rights which a government of, by and for the people is obliged to protect.

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In the Caribbean and much of the Central American region, countries fix or have only very limited exchange rate flexibility and therefore feel the effects of a rise in international food prices, the report said.

In poorer Central America food has one of the highest weights in the overall consumption basket, and the urban poor are most at risk, it said.

"It is therefore necessary to increase aid to these groups and improve its targeting, perhaps through reformed conditional cash transfer schemes, to compensate for the effect of the food price surge," the institution urged. --Rotters

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I love the way banksters phrase the poor having to spend all their money on food ("one of the highest weights in the overall consumption basket") because they don't have enough money because transglobal corporations maintain slave labor conditions in these countries (Central America/Caribbean), with shit wages and no help from the government. For instance, the U.S.-funded Honduras military shot up President Mel Zelaya's house, kidnapped him and forced him out of the country at gunpoint, with a refueling stop at the U.S. air base at Soto Cano, Honduras, for, among other things, raising the minimum wage (against the wishes of U.S. corporate slave shops), lowering the price of bus tickets for poor workers (with the help of cheap oil from the Venezuela-organized ALBA trade group) and providing free school lunches to poor children (undernourished children make more compliant slave laborers).

If more governments in Central America/the Caribbean were like the Zelaya government, the poor would have MORE MONEY to buy food and other essentials. A rise in food prices wouldn't hit them so hard. Duh.

And you gotto be suspicious of the banksters' solution. Will the "reformed conditional cash transfer schemes" require the country to take U.S. agricultural dumping? Like they did to Jamaica, for instance, dumping massive amounts of way cheap U.S. powdered milk into Jamaica, destroying the local dairy market and all the local fresh dairy product farmers--putting them out of business, destroying local food self-sufficiency, ending hundreds of years of family dairy farm skill and knowledge? Then, hey, they create a "free trade zone" at the docks, where Jamaican law does not apply, and provide shit jobs, with no labor protections, manufacturing shit products right on the docks and into the tankers for transport elsewhere.

What "reform"? What "conditions"? Beware, beware. We'll give your kids free powdered milk, see, and all these wonderful Frankenfoods, and, oh boy, McDonald's, and then they can grow up brain damaged and be worked to death for $1/hr on the docks and not be bothered by union organizers. Deal?

The U.S. controls a 30% share of the IADB, which means that, with their rightwing allies (their bought and paid for governments), they control policy, and there has never been a U.S. policy that benefited Latin America's poor. In fact, in the most U.S. controlled countries, the poor if they get uppity are simply murdered--thousands in Colombia, a horrible phenomenon that has now hit Honduras.

Venezuela has the best solution (which is probably why they don't mention it): government of, by and for the people, for real.

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*IDB financial losses and glaring lack of accountability invalidate replenishment request (3/22/09)
http://www.bicusa.org/en/Article.11082.aspx

[Bacchus39]

2. seems rather intuitive to me, higher food prices affecting the poor the most n/t

s

[naaman fletcher]

3. having once worked in a financial institution

I can tell you that the "analysts" and "economists" are under constant pressure to publish original work so that the salesmen can show the clients what great value and information they get by being their clients, as opposed to the clients of a different bank. I say this not to take away from anything that you said, but as you note it mentions both honduras and bolivia this looks to me like a simple "whats an easy research piece we can publish? I know, lets just look at countries with the highest food spending to income ratio". It's sort of like the NY Time "poor hit hardest by X" news pieces that show up almost every day. It's a an easy way to take two data points and create a whole story or research piece without doing a lot of work.

[Peace Patriot]

4. Yeah, I get what you're saying about the brain-numbing "reports" that fill the lower level floors

of the office building of the rich and the powerful.

:puke: