Showing posts with label free market. Show all posts
Showing posts with label free market. Show all posts

Tuesday, 6 May 2008

No-one truly cares about solving the food crisis

Thailand abandons the nonsensical idea of a South-East Asian rice exporting cartel in favor of stimulating productivity (CBC).

Thai officials had proposed the idea of a cartel earlier this month in an effort to gain more control over skyrocketing rice prices


The day a cartel strives to keep prices LOW pigs will fly. The naivete (or slyness) of the Thai government amazes me. Such a syndicate would only drive producers into bankruptcy (unable to sell at market prices and afford derivative products), hardly a solution to the food crisis.

At the same time, farming subsidies in the US and the Common Agricultural Policy in the EU are still in place and nearly never called into question, the food aid agencies with overpaid employees have to buy the food on a distorted market and so the vicious circle continues. No wonder Senegal's President, Abdoulaya Wade, called on the FAO's abolition (Corriere Della Sera). Headquarters in Rome and the highest-paid employees in the entire UN roster are unmistakable attributes of a body genuinely committed to relieving the suffering of the hungry in Africa and Asia.

South-East Asian governments consider clenching the rice market with an iron fist. The always adamant EU and US pledge aid and whatnot while maintaining a perverse system of pricefixing. The embattled FAO perpetuates the vicious circle. Demand for food genuinely grows worldwide.

Meanwhile leftist anti-poverty anti-WTO anti-capitalist anti-GMO and anti-intelligence protesters deny the African nations (among others) the unmistakeable benefits of Genetically Modified crops that can actually reproduce, forcing those who starve into buying batches of seeds that can grow every year or into the fairtrade delusion. Organic farming, with its gross inefficiency, further steals agricultural land that could be used for producing more food more efficiently.

Who will care for the needy instead of their own backyard, privileges, comforts or sad delusions?

Sunday, 27 April 2008

China recalls death cargo, and how responsible markets could have prevented the stalemate

After days of stalemate China has finally backed down and recalled its weapons shipment to Zimbabwe. The story is fetched from the English edition of Al-Jazeera.

Kudos to the dockers trade unions in South Africa for refusing to unload the crates of oppression that Mugabe so fondly wanted. However regular that shipment may have been on paper, the use to which it would be put was so outrageously clear no-one selling those weapons could expect his hands to be clean of innocent Zimbabwean blood.

Commenting on the shipment at a regular foreign ministry press briefing in Beijing, spokeswoman Jiang Yu said the decision had been taken by the Chinese company involved to recall the vessel.

She said the shipment was completely legal and fell within the established norms of international trade.

"In the field of conventional weapons, we have trade relations with some countries. These are consistent with our laws and with Security Council resolutions and China's international obligations," Jiang said.

"We have been very responsible and cautious with regards to weapons exports."


I can say nothing with respect to the obligations, norms and agreements. What amazes me is that someone would actually decide to take an order from a butcher AFTER an election he was clearly losing. Chinese weapons enterprises seem to combine blindness and the most wicked business spirit in a very efficient manner, making the phrase "business is business" sound eerily disturbing.

I may be accused of double standards. On one hand we have the manufacturer's duty to turn a profit (i.e. sell to whoever buys) and the blindness of the free market. On the other we have the concern for the life of innocent Zimbabweans and the clear indication of a butcher's desire to cling to power at any cost. I wish to analyze this situation in the light of a market failure due to the west's inaction and a lack of market transparency.

Mugabe should have been expected to order more firepower, since his own people were turning against him en masse. A transparent international weapons market would have recorded the assassin's bid for weapons and China's willingness to supply them. All the concerned West should have done then (to put their money where their mouth is) was outbid Zimbabwe for any weapons shipment they laid their eyes on.

The end result could have been the impossibility for Zimbabwe to bid against the economic might of the West (unless some rich thug was willing to buy the weapons for Zimbabwe), a weapons supply shortage causing a rise in prices thereby bankrupting many paramilitary organizations or thuggish governments relying on cheap armaments. A weapons stock exchange maybe, like the system we use for oil supplies?

Although I recognize this is no long-term solution, the market does hold a temporary answer to such crises. In the long-term we should all strive for thugs not to be elected to government in the first place and for democratic means to be the sole way of settling issues of government and representation.

Just a hope for now.