World Poverty Rising: Over 1 Billion People Hungry in 2009

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23 October 2009. Significant progress was being made in eradicating extreme poverty and hunger. Boosted by the Green Revolution of the seventies, that led to massive increases in agricultural production, and the economic miracle in Asia, hundreds of millions of people escaped the poverty trap.

That trend has been in evidence throughout this century, as life expectancy and GDP per capita have increased. In his incredible TED Talk, Debunking Third World Myths, Hans Rosling runs through the data like a sports presenter to explain that the old 'us' and 'them' stereotype isn't really true anymore.

Sadly that process started faltering as long ago as 1996, and has gone into decline this year. The Food and Agriculture Organisation (FAO) of the United Nations has just issued its 'State of Food Insecurity in the World' report 2009, which says that hunger is now at the highest level since it started keeping records in 1970. A grim milestone has been breached; more than 1 billion people are now classified hungry (1.02 billion to be exact).

The Financial Crisis is believed to have added 100 million people to the hungry list. Lack of funds has led to climbing unemployment levels, leaving families unable to buy enough food. This has led to an increase in hunger in every region of the world.

The problem today is less about the weather. Despite a drought earlier this year in India, the monsoons did come later, and agricultural production around the world has been reasonable. It is more a question of economics.

Kostas G. Stamoulis, A Senior Economist with FAO, says

“The way we manage the global agriculture and food security system doesn’t work ...There is this paradox of increasing global food production, even in developing countries, yet there is hunger.”

There are fears that this problem will only get worse. The FAO estimates that food production must increase by 50% to 2030, and by 70% to 2050, in order to feed a world population that is expected to grow to 9.1 billion people by then.

It believes that there is enough land, water and technology available to make that happen, but that it probably won't because of political, economic and security realities. That means that hunger and poverty could increase and could affect billions of people, for man-made rather than natural reasons.

In discussing the crisis, the FAO states that the fact that hunger levels had already start rising again suggests there are structural problems - ie there is something wrong with our system of producing, managing and distributing food that needs to change to meet growing demand levels.

When a major event like the Financial Crisis takes place, it puts a whole new level of strain on the poorest and weakest in society. Historically it has been true that crisis strikes hardest at those who can least afford it, and the same is true this time around.

Various solutions are proposed, including improving social safety nets for short term help, and a focus on improving productivity and lower trade barriers for the long term.

Bill  Gates, the founder of Microsoft who has turned full-time philanthropist through the Gates Foundation that he runs with his wife Melissa, has recently signalled that they are about to prioritize hunger eradication as their main focus. They had previously worked primarily in disease eradication, for example handing out millions of mosquito nets in Africa in a bid to stop the spread of malaria.

He recently said that

Helping the poorest smallholder farmers grow more crops and get them to market is the world's single most powerful lever for reducing hunger."

He has announced $120m funding for agriculture research and development projects, with more expected.

There is another key aspect to this is central, but which has not yet been fully discussed.

100 million more people have gone hungry in 2009. That is equivalent to the population of Mexico. The total hungry population of 1 billion is now more than the population of the United States, Europe and Russia combined. We can trace most of this growth in poverty directly to the Financial Crisis. The causes of the crisis are also causes of hunger.

There needs to be regulatory reform of the banks. That is not a domestic US problem - that is a global problem. Just ask one of the newly hungry. As Wall St bankers go back to paying themselves record bonuses and start to forget about 2008, with their Too Big To Fail credentials proven, hundreds of millions of people face years more hunger.

Clearly the work of the FAO, the Gates Foundation and other organisations are vital and much needed, but alone they are not enough. We come back to the same fundamental root issue that we have in so many other stories - the need to reform the banking system.

Government has to control the banks, and not the other way around. We need campaign finance reform; the restoration of regulations that were dismantled by the Reagan, Clinton and Bush administrations and their finessing for this era of High-Frequency trading and other such shenanigans; and a change of culture and reward structures such that the innovative and enterpreneurial  spirit of the world's best and brightest should be channelled to solving hunger and other shared real-world problems, and not adding yet more exotic derivates to the greatest wealth destroying machine the world has ever seen.

Juan Abdel Nasser

EconomyWatch.com