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	Abandoning Asia’s Poor by Isabel Ortiz and Anita Kelles-Viitanen Project Syndicate   May 2008   More than half of Asia’s population -- 1.8 billion people -- live on less than $2 a day; more than 600 million of them try to survive on less than $1 a day. With food prices now soaring, most of Asia’s “working poor,” who are already struggling on degraded lands, in sweatshops, on streets and at homes, risk further destitution.   Yet the Asian Development Bank – an institution whose mission is to reduce poverty – last month approved a new corporate strategy (ADB Long Term Strategic Framework 2008-2020) that is ominously silent on the importance of employment and social protection for the poor. A handful of influential ADB bureaucrats with large salaries, secured pensions, comprehensive health insurance, subsidized housing, and education for their children, have apparently decided that financing subsidized housing, health, nutrition, and child protection programs is not a priority. Nor do they consider land reform, employment services, or pensions for all Asians a priority.   Instead, these officials have decided to refocus ADB operations on three areas: inclusive economic growth, environmentally sustainable growth, and regional integration, with a heavy emphasis on private-sector development. The ADB is abandoning crucial public support for social development.   The new strategy is a reversal of the policies of the late 1990’s, when the ADB changed its objective from “economic growth” to “poverty reduction.” The ADB’s earlier policies were based on broad-based growth, good governance, and social development. Ten years later, only an empty corporate motto of “an Asia and Pacific region free of poverty” is left.   Social protection, housing, employment, and labor are not on the ADB’s new agenda. Health and agriculture will be considered only on a highly selective basis. Only education remains as a future investment sector, given its impact on productivity, but the rest of the much-needed social sector interventions have been abandoned in favor of investment in infrastructure, the environment, regional integration, and finance.   No lesson was learned from the Asian financial crisis, which underscored the importance of social protection. Pensions are mentioned only under financial-sector development: the ADB is to promote private-led insurance, despite evidence from the United Nations, International Labor Organization, World Bank and NGOs showing that private pensions do not reach the poor.   If the ADB were serious about poverty reduction, it would put a significant share of its investments in social development, particularly on non-contributory universal social security schemes that can reduce poverty by 35% to 50%.   Why is the ADB constricting its agenda? Why does it want to deny governments’ access to much-needed funds for social development?   The ADB argues that other agencies are responsible for social development. But that argument is unjustified: while institutions such as the UN and NGOs may work on social development, they are under-funded compared to the ADB. Besides, plenty of other public and private institutions undertake the infrastructure and finance projects that the ADB now wants to focus on. So, what is the ADB’s added value, and whom does it serve?   Certainly the ADB’s new strategy will not serve the majority of Asians, 60% of whom still live in poor rural areas. Indeed, Asia and the Pacific account for three-quarters of the world''''s stunted, underweight, and malnourished children. Maternal mortality rates remain dismal in several countries. As food prices rise, so is hunger and poverty.   External and internal pressure at the ADB’s Annual Meeting this May forced the bank to respond to the current food crisis through temporary safety-net food security programs. It also offered medium-term measures such as infrastructure and rural finance. All of these are good, but they are insufficient. Other measures are needed to reduce poverty in rural areas, such as land reform and rights, agricultural extension services, expanding access to health and non-contributory social pensions, just to mention some.   ADB’s major goal, however, seems to be to scale up private-sector support from 15% to 50% of total bank operations. Several countries have expressed reservations about this. It will include direct financing, credit enhancements, and guarantees – a subsidy to a sector known for its risky non-performing operations at the ADB – as well as business-friendly regulations and removal of market “barriers,” which include social and labor rights. Such rights can be tolerated only as minimum social safeguards, which the ADB is trying to neuter through another ongoing review.   Unless the ADB’s member governments reverse its current policies, they, too, will be blamed for ignoring the urgent needs of the poor. Poverty reduction requires both economic and social policies that reach people. Growth on its own is not sufficient to guarantee poverty reduction in Asia and the Pacific.   * Isabel Ortiz, a former ADB senior official, was a founding member of its Poverty Unit; Anita Kelles-Viitanen is a former Manager of Social Development at the ADB.
	Multinational Speculators blamed for driving up price of foods by The Independent   May 4, 2008   Giant agribusinesses are enjoying soaring earnings and profits out of the world food crisis which is driving millions of people towards starvation, The Independent on Sunday can reveal. And speculation is helping to drive the prices of basic foodstuffs out of the reach of the hungry.   The prices of wheat, corn and rice have soared over the past year driving the world’s poor - who already spend about 80 per cent of their income on food - into hunger and destitution.   The World Bank says that 100 million more people are facing severe hunger. Yet some of the world’s richest food companies are making record profits. Monsanto last month reported that its net income for the three months up to the end of February this year had more than doubled over the same period in 2007, from $543m (£275m) to $1.12bn. Its profits increased from $1.44bn to $2.22bn.   Cargill’s net earnings soared by 86 per cent from $553m to $1.030bn over the same three months. And Archer Daniels Midland, one of the world’s largest agricultural processors of soy, corn and wheat, increased its net earnings by 42 per cent in the first three months of this year from $363m to $517m. The operating profit of its grains merchandising and handling operations jumped 16-fold from $21m to $341m.   Similarly, the Mosaic Company, one of the world’s largest fertiliser companies, saw its income for the three months ending 29 February rise more than 12-fold, from $42.2m to $520.8m, on the back of a shortage of fertiliser. The prices of some kinds of fertiliser have more than tripled over the past year as demand has outstripped supply. As a result, plans to increase harvests in developing countries have been hit hard.   The Food and Agriculture Organisation reports that 37 developing countries are in urgent need of food. And food riots are breaking out across the globe from Bangladesh to Burkina Faso, from China to Cameroon, and from Uzbekistan to the United Arab Emirates.   Benedict Southworth, director of the World Development Movement, called the escalating earnings and profits “immoral” late last week. He said that the benefits of the food price increases were being kept by the big companies, and were not finding their way down to farmers in the developing world.   The soaring prices of food and fertilisers mainly come from increased demand. This has partly been caused by the boom in biofuels, which require vast amounts of grain, but even more by increasing appetites for meat, especially in India and China; producing 1lb of beef in a feedlot, for example, takes 7lbs of grain.   World food stocks at record lows, export bans and a drought in Australia have contributed to the crisis, but experts are also fingering food speculation. Professor Bob Watson - chief scientist at the Department for Environment, Food and Rural Affairs, who led the giant International Assessment of Agricultural Science and Technology for Development - last week identified it as a factor.   Index-fund investment in grain and meat has increased almost fivefold to over $47bn in the past year, concludes AgResource Co, a Chicago-based research firm. And the official US Commodity Futures Trading Commission held special hearings in Washington two weeks ago to examine how much speculators were helping to push up food prices.   The revelations are bound to increase outrage over multinational companies following last week’s disclosure that Shell and BP between them recorded profits of £14bn in the first three months of the year - or £3m an hour - on the back of rising oil prices. Shell promptly attracted even greater condemnation by announcing that it was pulling out of plans to build the world’s biggest wind farm off the Kent coast.
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