by NICK DOWSON
We’ve got cold extremities, you’ve got a cold heart,’ sang musician Ceitidh Mac at a gig in Newcastle on the night steep government-sanctioned energy price hikes went into effect in the UK.
The lyrics were apt: ordinary people were being plunged into poverty for the ballooning profits of a handful of corporations.
In blustery Britain with its damp and dilapidated houses – and across gas-hooked Europe – energy prices have dominated headlines. But around the world the greatest impact has been felt in prices of food – a more vital and larger part of people’s budgets, particularly the poorest.
In Sri Lanka, where protests spurred by economic crisis felled its President, food inflation stood at 90 per cent in August 2022, leaving even staples like rice unaffordable.
Everywhere the story is the same: more misery for the many, more profits for the few. Through 2022, roughly one million people were pushed into extreme poverty every 33 hours. For 150 million people hunger is a daily reality. But champagne dealers are worried about low stocks, as the wealthy rush to buy their finest bottles.
The hunger crisis has been sharpest in regions particularly impacted by climate change, suffering conflict, or highly reliant on imports of food. Afghanistan, Pakistan, Yemen, Haiti, and several Central American countries are badly hit, as well as much of sub-Saharan Africa.
Worst affected are East Africa and the Horn, where Oxfam warned in mid-October 2022 that one person was likely to die of hunger every 36 seconds until the end of the year across Somalia, Ethiopia and Kenya. In Somalia, acute hunger was more widespread than during the 2011 famine, when a quarter of a million people died, it said.
Margret Mueller, Oxfam’s regional humanitarian co-ordinator for the Horn and East Africa, enumerates the causes: ‘There’s the economic impacts of Covid-19, ongoing conflicts and fragility, and climate change that is impacting the region much more strongly than other regions. That led to an unprecedented four consecutive failed rainy seasons.’ Rains at the end of 2022 also looked set to be low, meaning the earliest chance to bring in a harvest will be June 2023.
In South Sudan, the majority of the population is acutely food insecure. ‘The “food basket”’, how much a family spends for food in a month – increased 49 per cent in a year, with local cereal prices up 123 per cent in Kenya, 70-100 per cent in Ethiopia, and 28 per cent in Somalia.’
Without enough food or water, 1.8 million people have fled their homes. The toll of livestock is nine million. ‘In Somalia that’s every third animal dead,’ says Mueller, ‘and people live off their herds. People are starving and children are dying.’
Their pound of flesh
For much of humanity the cost of living was already unaffordable even without recent pressures. Nearly 3 billion couldn’t afford a healthy diet in 2019, and that number climbed by 112 million in 2020.
Now, on top of high inflation, many are having to deal with a severe debt crisis – affecting both governments and individuals. The pandemic and recent economic turmoil have exacerbated the situation for many Global South countries, where debts had already reached high levels in the late 2010s following a prolonged dip in commodity prices which impacted their earnings.
Hot money from private investors, which had flowed into developing countries over the last decade as interest rates in the rich North hit rock bottom, is now gushing back out as central banks in many Western nations are hiking rates again.
‘Rising interest rates in Western countries are increasing borrowing costs; the strengthening dollar is also increasing the value of debts,’ says Heidi Chow, executive director of campaign group Debt Justice, which estimates 54 countries are in debt crisis. Climate disasters, such as the floods in Pakistan or Hurricane Maria in Dominica, are forcing more borrowing.
High external debts mean many Global South governments are hamstrung in responding to the cost of living crisis, with little room for budgetary manoeuvre to protect their citizens. Many are cutting public spending when people need it most. The International Monetary Fund, for its part, continues to push failed austerity measures as a condition of help.
Meanwhile high private debt levels – from student loans and mortgages to microfinance loans – as well as the running down of household savings during the pandemic mean many have little buffer.
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