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Africa

2011-11-26

AFRICA-Financial speculation and Africa

Rome (Agenzia Fides) - The current international financial crisis is having strong repercussions even towards the poorest Countries of Africa. The international speculation in fact, after the mortgage crisis, bad housing, and after other U.S. financial scandals, is looking for new investments. One of these is the market of agricultural commodities.
"After the 2008 financial crisis, large investment funds were repositioned on the raw food material Bags and they obtain astronomical speculation profits at the expense of hungry people" complains to La Croix (18 November) Jean Ziegler, former Prime Rapporteur for the Right to Food of the UN and is currently Vice-President of the Advisory Council for Human Rights of the United Nations. Ziegler offers some figures: a ton of ground corn currently costs 266 euros, when in 2010 it cost 110 euros, the price of maize has increased by 93%, while between 2006 and 2010 the capital invested in Bags of agricultural raw materials have increased by 2,300%.
One must also remember that 75% of trade in food commodities (maize, rice and wheat) is controlled by 7-8 multinational corporations that dominate the market, determining the prices. The financial crisis has also caused a decrease of the richest states conferred by the World Food Programme (WFP), whose budget has increased from $ 6 billion in 2008 to -3.2 billion in 2011.
Meanwhile, what is expected for 2012 is a new food crisis in Sahel, where 6 million people are at risk of hunger due to the severe drought which hit the region. Most of the Countries in the area, highly indebted, do not have the economic resources needed to buy the food on international markets, the prices of which, as mentioned, are rising sharply, mainly because of financial speculation.
Another aspect of the terrible financial speculation impact in Africa is represented by the so-called "vulture funds", that buy underpriced bonds of developing Countries, close to default, even taking debtors to court. Several of these are debts of African countries like Congo Brazzaville, the Democratic Republic of Congo and Zambia. The first 26 "vulture funds" (out of 35) were able to raise $ 1 billion from the poorest Countries in the world and expect to receive another 1.3 billion dollars. "In terms of public donations, the impact of vulture funds is enormous. The billion dollars collected by the funds is equivalent to more than double the entire budget allocated by the Red Cross for Africa in 2011. With a billion dollars one could fund the entire budget required by the United Nations for famine relief in Somalia", writes The Guardian (November 15, 2011). (L.M.) (Agenzia Fides 26/11/2011)

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