A critique of the World Bank and the Washington Consensus–at Bloomberg, of all places. This is part 3 of a 7-part series entitled “Recipe for Famine.” Hat tip to DRedmond at lbo-talk. Look for a feature article by Mark Engler on the decline of the Washington Consensus in our January/February issue.
World Bank’s ‘Wrong Advice’ Left Silos Empty in Poor Countries
Dec. 10 (Bloomberg) — Inside and out, the rusted towers of El Salvador’s biggest grain silo show how the World Bank helped push developing countries into the global food crisis.
Inside, the silo, which once held thousands of tons of beans and cereals, is now empty. It was abandoned in 1991, after the bank told Salvadoran leaders to privatize grain storage, import staples such as corn and rice, and export crops including cocoa, coffee and palm oil.
Outside, where Rosa Maria Chavez’s food stand is propped against a tower wall, price increases for basic grains this year whittled business down to 16 customers a day from 80.
“It’s a monument to the mess we are in now,” says Chavez, 63.
About 40 million people joined the ranks of the undernourished this year, bringing the estimate of the world’s hungry to 963 million of its 6.8 billion people, the Rome-based United Nations Food and Agriculture Organization said yesterday. The growth didn’t come just from natural causes. A manmade recipe for famine included corrupt governments and companies that profited on misery. Another ingredient: The World Bank’s free-market policies, which over almost three decades brought poor nations like El Salvador into global grain markets, where prices surged.
“The World Bank made one basic blunder, which is to think that markets would solve problems of such severe circumstances,” said Jeffrey Sachs, director of the Earth Institute at Columbia University and a special adviser to UN Secretary-General Ban Ki-moon. “But history has shown you need to help people to get above the survival threshold before the markets can start functioning.”
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