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Posts Tagged ‘Drought’

Global imbalances returning, could fuel unrest – IMF chief

Posted by Admin on February 4, 2011

http://in.finance.yahoo.com/news/Global-imbalances-returning-reuters-1199879621.html

Dominique Strauss-Kahn, Managing Director, International Monetary Fund (IMF) smiles during a Thomson Reuters Newsmaker event at the Newseum in Washington, December 16, 2010. REUTERS/Molly Riley/Files
On Tuesday 1 February 2011, 12:44 PM

 

By Kevin Lim

SINGAPORE (Reuters) – The world economy has begun improving but is beset by problems such as high unemployment and rising prices which could fuel crippling trade protectionism or even lead to war within nations, the head of the International Monetary Fund warned on Tuesday.

Rising food and fuel prices in recent months have already hit poorer countries and are one of the factors behind massive anti-government protests in Egypt and in Tunisia, whose president was ousted last month.

The United Nations ‘ food agency (FAO) said last month that global food prices hit a record high in December, above 2008 levels when riots broke out in countries as far afield as Egypt , Cameroon and Haiti.

“The pre-crisis pattern of global imbalances is re-emerging,” Dominique Strauss-Kahn said in a speech in Singapore.

“Growth in economies with large external deficits, like the U.S., is still being driven by domestic demand. And growth in economies with large external surpluses, like China and Germany, is still being powered by exports,” he said.

“As tensions between countries increase, we could see rising protectionism — of trade and of finance. And as tensions within countries increase, we could see rising social and political instability within nations — even war.”

Over the next decade, 400 million young people would join the global labour force, posing a daunting challenge for governments, he added.

“We face the prospect of a ‘lost generation’ of young people, destined to suffer their whole lives from worse unemployment and social conditions. Creating jobs must be a top priority not only in the advanced economies, but also in many poorer countries.”

Unemployment stands at 9.4 percent in the United States while a number of European countries are also struggling to create jobs in a global economy where much of the growth is coming from emerging market countries.

DEVELOPED COUNTRIES ALSO AT RISK

Concerns about rising debt in developed countries, meanwhile, have increased in recent months.

Ireland was engulfed by Europe’s debt crisis late last year, Greece continues to struggle despite a rescue package and many market watchers fear Portugal and Spain may be next.

Last week Standard & Poor’s cut Japan ‘s credit rating and Moody’s warned it may place a negative outlook on the United States unless it can reduce its gaping budget deficit.

In Asia, the worries centre around inflation and analysts say central banks in countries such as Indonesia need to respond faster to contain rising prices.

Strauss-Kahn also said foreign exchange rate adjustments have an important role to play in addressing global economic imbalances and should not be resisted.

“Holding back such adjustment in one country also makes it harder, and more costly, for other countries to let their exchange rate adjust,” he said.

“For this adjustment to take place, time is of the essence, but asking for time only makes sense if there is a significant and regular move in the right direction.”

Chinese policymakers were moving in the right direction by taking steps to bolster domestic demand, he noted, though the United States and many other Western countries continue to push Beijing to let its yuan currency appreciate faster.

Strauss-Kahn said the IMF expected subdued growth of 2.5 percent for advanced economies this year as high unemployment and household debt weighed on domestic demand.

“Without jobs and income security, there can be no rebound in domestic demand — and ultimately, no sustainable recovery,” he said.

Emerging markets would grow at a faster pace of 6.5 percent, with Asia excluding Japan expanding by 8.5 percent, he said.

“Monetary policy in the advanced economies should remain supportive as long as inflation expectations are well anchored and unemployment stays high,” while Asia may need to do more to address the threat of overheating and a possible hard landing, he said.

(Editing by Kim Coghill)

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Severe drought threatens millions in Somalia

Posted by Admin on February 4, 2011

http://news.yahoo.com/s/ap/20110203/ap_on_he_me/af_somalia_drought

GAROWE, Somalia – A severe drought has plunged millions of Somalis into crisis after rains failed for several consecutive seasons in this Horn of Africa nation, and the U.N. and aid groups are warning of the possibility of a looming catastrophe.

The drought has increased the number of malnourished children in some regions, displaced thousands of people and killed thousands of animals. Officials in a central Somali region said 18 people died of drought-related effects.

“The situation is dire. It is an added vulnerability to an already extremely vulnerable people,” the U.N.’s humanitarian chief, Valerie Amos, told The Associated Press after touring camps for displaced people in Somalia’s semiautonomous region of Puntland on Wednesday.

Amos’s one-day trip was intended, she said, “to remind the people that there is still a long, ongoing problem in Somalia. I don’t want the people to forget Somalia. When you have an ongoing problem anywhere in the world, it is easy to slip it from the agenda.”

The drought is the latest in a long line of problems for Somalia, which has been mired in conflict since 1991, when warlords toppled the country’s last central government and then turned on each other.

According to the U.N., the malnutrition rate among children has jumped to 30 percent in Somalia’s southern Juba region, a figure that is double the emergency threshold. Food prices have soared up to 80 percent in some regions.

The price increase in the south is attributable in part to traders who are hoarding the food to profit off the drought, said Grainne Moloney, the head of the U.N.’s food security and nutrition analysis unit in Nairobi, Kenya.

Many drought-affected families are fleeing their homes in search of food. In the Galmudug region of central Somalia, officials said they haven’t seen such drought conditions since 1974.

Citing a recent survey conducted by his administration, Omar Mohamoud, a local government official, said the drought has killed 18 people and displaced thousands.

Mohamoud said his community has seen about 70 percent of its sheep and goats, 50 percent of its cattle and 30 percent of its camels die in the last three years.

“We are appealing to the international community to respond to the crisis and provide the people with water, food, medicine and shelter,” said Mohamoud. “If the international community does not respond to the crisis urgently, a catastrophe of huge proportions is staring us right in the eyes.”

The British aid group Oxfam says Somalia’s current drought could be as serious as one in the early 1990s, when thousands of people died.

“The situation is bad now, but with more months of no rainfall it could become an absolute catastrophe,” said Alun McDonald, the group’s spokesman in Nairobi. He noted that weather predictions suggest that the next rains “will also be poor or even fail.”

The poor rains are even affecting marriages. In a makeshift camp in Garowe town, Nura Farah, a mother of seven children, told AP that the lack of rains led to a divorce from her husband.

“When the drought hit us we quarreled,” Farah said. “I told my husband, ‘Look, you are a man. So go to town and look for ways to support your family.’ But he rejected my request and divorced me and left.”

Farah said she quit the nomadic life after her family’s one male camel and 200 sheep and goats died in a month. Poverty has forced her and her children to seek shelter in relatives’ homes in Garowe, the capital city of Puntland. Her 15-year-old son contracted tuberculosis because of a lack of food, she said.

The U.N. has released $4.5 million from its emergency fund to respond to the drought and is likely to release more in coming weeks, said Mark Bowden, U.N.’s Somalia humanitarian coordinator. This figure is separate from the $530 million the U.N. appealed for this year to finance its aid projects in Somalia.

The drought’s effects are worsened by the fact aid agencies’ work is restricted in many regions where Islamist insurgents are in control.

Peter Smerdon, the spokesman for the World Food Program, called on all parties to the Somali conflict to allow his agency free access to help the needy population. He said WFP has had to feed more than 130,000 additional people in Somalia because of the drought. Of Somalia’s estimated population of around 8 million people, about 2.4 million need food aid and about 1.5 million are internally displaced.

Amos urged Somali politicians to inject “a sense of urgency to their discussions” to end decades of warfare.

Kiki Gbeho, the head of the U.N.’s office for the coordination of humanitarian affairs in Somalia, warned that if spring rains expected in April fail, the country “is in a huge problem.”

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