by Alex Evans | Jan 14, 2008 | Climate and resource scarcity, South Asia
Charlie Edwards at Demos points us towards news from the BBC:
The authorities in Pakistan have deployed paramilitary troops to guard wheat supplies around the country amid fears of a massive shortfall. The government has blamed hoarders and smugglers for the problem. Wheat is a staple food in Pakistan and shortages have led to large scale rioting in the past.
Flour shortfalls initially pushed up market prices. Later flour ran out on the open market when officials fixed prices and warned against violations. Now Pakistan’s national disaster management authority has deployed thousands of paramilitary troops at wheat stores.
Other BBC coverage notes that last week Afghanistan appealed for international help to combat a wheat shortage, while Bangladesh has warned it faces a crisis over rice supplies.
Here (again) is a link to my briefing note from December on international implications of rising food prices. Food prices will be one of this year’s standout issues. Donors and multilateral agencies are not looking well prepared…
by Alex Evans | Jan 14, 2008 | Global system, UK
Sterling’s down nine per cent against the euro since November, which as the FT helpfully reminded us this morning is
a rate of decline not far off that seen during sterling’s enforced exit from the European exchange rate mechanism in 1992, when it fell 11 per cent against Germany’s D-Mark.
Ralph Atkins and Chris Giles continue:
The list of causes is long. UK interest rates are expected to be cut, Britain’s trade position looks increasingly precarious, capital inflows from companies buying UK assets have slowed sharply, and a perception of poor economic management has grown since the credit squeeze hit the world in August.
But most economists think the adjustment is necessary even if it hurts in the short run. The UK’s current account deficit is seen as increasingly unsustainable; it is now the largest among the Group of Seven leading economies after big downward revisions to foreign income at the end of last year.
Over the course of today, news also emerged that annual factory gate inflation reached a 16 year high during December, as the fall in the value of the pound made imports of food and fuel even more expensive. Meanwhile, Britain has slipped from fifth to sixth place in the world’s rich list: the French are now worth £70 billion more than us (the top four remain the US, Japan, Germany and China).
Sigh: more chickens coming home to roost. National Institute of Economic and Social Research director Martin Weale comments that sterling’s hitherto sustained strength had fooled people into believing that
you can run the economy permanently on the back of consumer spending and rising land prices.
