A very good article and gets one to think about the obvious in whole new ways. Key learning/points include

1. The vagaries of commodity markets often serve as a trigger for violence, unrest or even civil war in the developing world.
2. We propose a form of foreign
   aid that would treat the symptoms of conflict–economic shocks to the
   incomes of the poor–before the disease of civil war takes hold and
   doing so in a way that would not undermine the functioning of the
   market system
3. Even as the U.S. and other
   wealthy countries grapple with potential solutions to the global
   financial crisis, they should also consider the impact of its
   aftershocks on less developed countries

Economic Gangsters

For some poor farmers, life may have just got a whole lot harder. The after-effects of some earlier commodity collapses suggest that civil war and genocide may also be on their list of worries: In 1989, the price of Arabica beans, the economic lifeblood of Rwanda’s poor farmers, fell by 50% and didn’t recover until 1995. But by this time, perhaps a million Tutsis were dead, victims of mass genocide arguably driven in part by the economic desperation of their Hutu countrymen.

In a Forbes op-ed yesterday, we describe this tragic nexus between commodity markets, poverty, and violence, and what the international aid community might do to prevent further tragedies:

http://www.forbes.com/opinions/2008/10/14/poverty-famine-war-oped-cx_rf_em_1015fismanmiguel.html

The proposals we mention here are described in detail in Chapters 5 and 6 of Economic Gangsters: Violence, Corruption, and the Poverty of Nations.

forbes, economic gangsters, wheat prices, poverty,

Bookmark This Post