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Financial Factors and Food Price Impacts

Food Out of Reach: Economic Realities - 1

Remittances are payments sent usually by individuals from one country to another. For example, a university student in England may have an evening job and send money back weekly to her family in Honduras.

Food Out of Reach: Economic Realities - 2

The Wall Street Journal reports on 27 January 2009 that major investment funds in the Middle East are facing portfolios frequently diminished by falling fortunes in the financial crisis, and thus are having to consider international investment cautiously. "The orientation of the funds has changed," the Journal quotes Simon Williams, Middle East chief economist at HSBC. "The onus is now on financing needs at home."

Food Out of Reach: Economic Realities - 3

South African Finance Minister Trevor Manuel is quoted by Bloomberg on 16 January 2009 saying, "The export markets developed with enormous sacrifice are suddenly closed to imports from our countries, as a result of falling consumer demand and increased protectionism."

Food Out of Reach: Economic Realities - 4

According medical evidence published in the journal Lancet, stunting in the first two years of life leads to irreversible damage. This includes reduced cognitive development, poorer school performance and reduced educational achievement during school years -- thus lowered productivity and earning potential in adulthood.

Food out of Reach: Economic Realities - 5

When meals are skipped because food is too expensive, the risk for chronic disease in later life increases, including diabetes and cardiovascular disease. This is particularly true of children born with a relatively low birth weight and then rapid weight gain later.

Food Out of Reach: Economic Realities - 6

As the global financial crisis deepens, hunger is likely to increase as the purchasing power of the poor diminishes because of reduced incomes and higher unemployment. The poor, who are least responsible for setting the financial crisis in motion, are the least protected from its negative impact, and the most likely to experience the worst of its effects.