April 24, 2008 [LINK / comment]
Food price summit in Caracas
In response to the soaring price of foodstuffs that has created hardship for poor people in many countries, four Latin American leaders held a summit meeting in Caracas, Venezuela this week. President Evo Morales of Bolivia, Daniel Ortega of Nicaragua, and Hugo Chavez of Venezuela, along with the vice president of Cuba, Chavez claimed the food price spike demonstrated the "historic failure of the capitalist model." In his typical populist style, ignorant of market realities or business practices, he blamed "intermediaries and speculators" for the food shortages. The United Nations World Food Program calls this a "silent tsunami" for countries that are highly dependent on food imports. See BBC. To my mind, that kind of rhetorical hyberbole only confuses the issue and makes it harder to solve the problem.
Thailand has faced heavy criticism in recent weeks for refusing to put controls on the price of rice. I learned to my surprise that Thailand is one of the world's biggest exporters of rice.
It will be interesting to see how Brazil reacts to this situation, since it has put heavy emphasis on the production of ethanol fuels made from sugar cane. Environmentalists who tout biofuels as the answer to the global shortage of hydrocarbon fuels are now learning what the consequences of that strategy are for human beings: hunger.