Soaring food and oil prices could keep an additional 42 million people in poverty in the Asia Pacific region the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) said.
"As soon as you recover from the financial crisis you have the oil and food crisis again," said Nagesh Kumar, director of the UNESCAP macroeconomic policy and development division.
UNESCAP said if crude prices rose to an average of $130 dollars a barrel and food prices doubled this year -- a worst case scenario -- then an extra 42 million people would either fall into, or fail to climb out of, poverty.
"Rising food prices are having dire effects on the poor..." said the report, which puts the total number of people living on less than $1.25 a day in the region at more than 950 million. The impact of the higher costs would be more severe in rural areas where the majority of poor people live, like India, Laos, Bangladesh and Nepal.
"The rising prices are not going to the producers," Kumar said. "Speculators are making up most of price rises..."
The large inflows of capital to the region create "vulnerability" to a sudden reversal. "You never know when something goes wrong and it is gone overnight. This is one major concern; the other is dealing with the sudden appreciation of currencies," said Kumar. He added that there was a risk of speculative bubbles that could threaten to "bring down the banking system" if they burst.
Violence and conflict fuel poverty according to the World Bank. The report notes that 1.5 billion people are affected by current violence or its legacies. The report also shows that 42 million people, roughly the equivalent to the entire population of Colombia, are displaced as the result of conflict, violence or human rights abuses. Some 15 million of them are forced out of their countries, while 27 million are internally displaced. Civil war costs a medium-sized developing country the equivalent of 30 years of GDP growth, according to the report. It takes 20 years for trade levels to return to pre-war levels under these circumstances.
The number of Brazilians living in extreme poverty is 16.2 million, the equivalent of 8.5% of the population. The definition of extreme poverty in Brazil is: any family that has per capita income of less than 70 reais (US$ 43.7) per month. The United Nations definition of extreme poverty is a person living on less than $1.25 per day, which works out to about US$ 60 per month.
Jeffrey D. Sachs, Professor of Economics at Columbia University and also Special Adviser to United Nations Secretary-General on the Millennium Development Goals says :-
"The world is drowning in corporate fraud, and the problems are probably greatest in rich countries – those with supposedly “good governance.” Poor-country governments probably accept more bribes and commit more offenses, but it is rich countries that host the global companies that carry out the largest offenses. Money talks, and it is corrupting politics and markets all over the world...Even if governments try to enforce the law, companies have armies of lawyers to run circles around them. The result is a culture of impunity, based on the well-proven expectation that corporate crime pays."
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