The halving of world oil prices over the last six months raises questions about the implications for food prices and the welfare of poor people.
Do lower oil prices mean lower food prices? To a certain extent. But for low-energy cropping systems common in most developing countries, and in areas where food is not transported far, the impact will be dampened. For large oil exporters, however, food prices may increase. In general, lower oil prices should lower the cost of moving food from producers to consumers and reduce on-farm fuel and fertilizer costs. But a countervailing factor is that cheap oil may also induce people to drive more, and as fuel ethanol mandates link biofuel use to overall fuel use, ethanol use and the volume of maize used to produce it would also go up. In countries where oil is a large share of exports, real exchange rates may depreciate, which will disproportionately increase the price of traded goods like grains relative to other prices.
Is the downturn in agriculture commodity prices necessarily bad for farmers who produce food? A major downturn in commodity prices would not be great for farm incomes, and high crop yields would be needed to help dampen the effect on farm profits. Lower fertilizer and transport costs may help mitigate any negative impacts.
How long will oil prices remain low? While there is no certainty in forecasts, current estimates suggest fuel prices will remain low for 2015, increasingly slightly in 2016. There are three main drivers of the oil price decline which are structural: Significant increases in US shale oil production, receding concerns of oil supply disruptions in the Middle East, and a change in OPEC policy to maintain rather than cut production.
Growing up, I always dreaded to enter my grandmother’s kitchen in the village. She used firewood to cook: There was such a dark, thick smoke in the room that I couldn’t breathe or keep my eyes open. I really don’t know how my grandmother could spend hours and hours in there, every day, for so many years. And unfortunately, my grandmother is not an isolated case. More than 90 percent of Kenya’s population uses firewood, charcoal or kerosene for their daily cooking needs.
I always dreamed that clean sources of energy would make Kenyans more independent and less exposed to the serious health risks posed by fossil fuels. In rural areas, most women like my grandmother rely on firewood; its consumption not only depletes our forests but also emits hazardous smoke that causes indoor pollution and eventually respiratory illness. In areas where firewood is scarce, women have to use cow dung as fuel, an option possibly even worse in terms of pollution. Urban areas are affected too: The poor rely mostly on charcoal, another biomass that has the same negative effects and health risks of firewood.
Cleaner fuel options have already been developed but are often too expensive or too difficult to transport across the country to be adopted by a large part of the population, especially by the 40 percent of people at the base of the pyramid.
So what can be done? How can we make clean fuels more affordable and accessible?
I first heard about bottled biogas when I visited a "green" slaughterhouse in Kiserian, Kenya. I was really impressed: My dream of a cleaner, more affordable and easily accessible fuel was right there before my eyes.
The Keekonyoike Slaughterhouse found an innovative way to produce affordable biogas and package it for distribution all around the country. Using a special bio-digester, this business can turn blood and waste from a community-based Maasai slaughterhouse into biogas for cooking. To facilitate transport, the firm stores the fuel in recycled cylinders and used tires, reducing even further the environmental impact of the operation. Just to give me a better idea of the "green" potential of his business, the manager told me that this first biogas plant is expected to cut methane emissions by more than 360,000 kilograms per year (the equivalent of almost 2,000 passenger vehicles).
Indeed, "bottled" biogas (biogas compressed into a cylinder) has huge potential in Kenya: Farmers can directly produce it, recycling the waste from their farms; can use it for their cooking needs; and, thanks to the bottling process, can sell the excess on the local market, generating income while saving the environment.
Keekonyokie is a company that began operations in 1982. It runs an abattoir that slaughters about 100 cows per day to meet the meat demand in Nairobi and its environs. In 2008, with the support from GTZ, the company constructed two 20-foot-deep biogas digesters that would help manage the abattoir waste, which was becoming a menace and a health hazard. Within a short time, the biogas being produced from the digesters was more than the company could absorb. The company managers started thinking of compressing and bottling the excess biogas, but they needed support to test the technical and commercial viability of their idea.
When infoDev’s Kenya Climate Innovation Center (KCIC) opened its doors in October 2012, Keekonyokie was one of the first companies to be admitted.
“We need everybody,” as World Bank Group President Jim Yong Kim has passionately argued. “We need writers who can write about this. We need engineers. We need doctors. We need lawyers. We need artists. We need everybody who can capture the imagination of the world to end poverty." There’s a role in development for public-spirited people from every profession who seek to contribute to the cause.
Deep legal knowledge and deft legal reasoning are certainly part of the skill set needed to eradicate poverty and promote development. That’s because “you can’t have justice without advocates for justice,” as the Justice Community of Practice at the World Bank Group recently learned from the leader of an energetic initiative to link public-spirited legal practitioners with the nonprofit and non-governmental organizations (NGOs) that need their skills.
The legal acumen that helps for-profit law firms succeed in the marketplace is often sought by nonprofits, human-services groups and human-rights advocates. Lawyers' skills can often make a crucial difference for organizations that deal with social prorities – whether it’s by tackling complex challenges like protecting refugees or defending prisoners of conscience, or by pursuing routine tasks like negotiating an office-space lease or reviewing an employment contract.
Matching the needs of social organizations with the capacity of lawyers who have a bit of time to commit to pro bono publico ideals – and thus to “strengthen the global pro bono community” for the long term – is the goal of PILnet, the Global Network for Public Interest Law. PILnet president Edwin Rekosh recently told the Bank’s justice-focused group that “promoting voluntarism among lawyers” often starts with the simple question, “Do you care about doing something good with your free time?” If so, “What do you care about?”
Lawyers within some of the world’s largest international law firms, in particular, often find that they have some spare capacity when they're in-between client assignments. Putting those flexible hours to good use for a pro bono client can both satisfy the lawyers’ altruistic aspirations and reflect well on their firms’ commitment to devote time and talent free of charge to worthy social causes.
We welcome 2015 confronting an all-too-familiar reality: there are still people in the world without access to sufficient and nutritional food. One in eight people go hungry every day, according to the United Nations, including an estimated one in six children under the age of five who is underweight. The situation is especially dire for those living in extreme poverty, whose inadequate access to technology, land, water, and other agricultural inputs routinely imperils their ability to produce or secure food for themselves and their families, especially as world food prices have risen in recent years.
On a scale of one to something-must-be-done-now, tackling this problem and ensuring food security remains among the most pressing development issues of our time. The good news is the first Millennium Development Goal to eradicate world hunger is achievable—and the target to halve it by the end of this year is close to being met. But governments have too often failed to meet their obligation to nurture an enabling environment for food security, and in some cases have actually made it worse.
Trade policy can be a proactive—rather than a reactive—tool in helping to ensure greater food security, a theme expounded in our recent publication entitled Trade Policy and Food Security: Improving Access to Food in Developing Countries in the Wake of High World Prices. Although world food prices have risen in real terms in recent years after three decades of decline, there is no global shortage of food. The problem is one of moving food, often across borders, from areas with a production surplus to those with a deficit, at prices that low-income consumers in developing countries can afford.
Our Top Ten blog posts by readership in 2014.
This post was originally posted on January 29, 2014
Around the end December of every year, the pundits start coming out with their forecasts for 2014. This past December, the World Bank pundits predicted everything from girls outperforming boys in developing countries (girl power!) to the staggering idea that for Europe, 2014 will be a better year.
This year though, the World Bank’s Future Development Forecasts blog, included a prediction that caught these two political scientists by surprise— “as more and more economists point to the primary [sic] of politics in development, political scientists will wake up and wonder why they have been left out of the discussion.”
Joel Hellman, the World Bank’s Director of the Center on Conflict, Security and Development in Nairobi (OPSFN), predicted there will be a new movement of “political contextualists.” Meaning: we as development practitioners have to take a look at the broader institutional framework influencing the performance of the economy, and on development in particular. This is particularly relevant with regard to governance reform and strengthening institutions and service delivery in countries.
Politics in development, hear, hear! The World Bank’s People, Spaces and Deliberation blog has been making this case for years. Nevertheless, neither economists nor political scientists have really introduced a convincing framework for how this political contextualization would play out in development: how it influences development and how it helps us understand strategies that promote development effectiveness and the efficiency of development interventions.
Soon will be January 1, 2015. Most of us will make New Year’s resolutions and most of us will fail to keep them. Keeping New Year’s resolutions is hard. But it turns out that we are much more likely to make good on our resolutions if we decide to build upon our strengths rather than focus on fixing what’s wrong. This insight is all the more important if we combine it with the intriguing view that it is the depth of our strengths, not the absence of weaknesses, which makes us successful. People are successful not because they are perfect but because they have deep strengths. What if this was also the case for countries?
With this in mind I turn my attention to some of the strengths of El Salvador, Guatemala, and Honduras, three countries that have recently put together their “Plan of the Alliance for Prosperity in the Northern Triangle.” The Plan is in part a response to the well-known security challenges facing those countries and the challenges posed by the surge in unaccompanied migrant children but it is also an opportunity to focus on the strengths of the Northern Triangle of Central America and how to develop them even further. And when one goes beyond the headlines one discovers a variety of success stories.
Take a look back at some of the most popular stories you may have missed in 2014:
1. Raising More Fish to Meet Rising Demand
- natural capital
- food security
- Climate Change
- Agriculture and Rural Development
- The World Region
- South Asia
- Latin America & Caribbean
- East Asia and Pacific