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A harvester carries coca leaves on his back in a coca plantation. He has put in half a day for this. For each 12-kilo sack, he receives the equivalent of about $1.50. A worker can harvest about 20 bags of coca leaves a day.
Hard Numbers: Colombia sees coca boom, Denmark sends museum pieces to Ukraine, World Food Program warns of “doom loop”, a river of wine flows in Portugal
6: In order to fulfill its promises to send Leopard 1 tanks to Ukraine, Denmark had to pull half a dozen of the Cold War-era classics from local military history museums. The tanks in museum collections were found to be in better condition than those in Danish army storage.
24 million: The United Nations World Food Program has warned of a “doom loop” of global hunger as it faces a 60% budget shortfall this year. Unless the WFP can make up the deficit, some 24 million people around the world could fall into emergency hunger situations as the program can no longer provide for them.
600,000: Two wine tanks at the Levira Distillery in São Lourenço do Bairro, Portugal burst open, flooding the village with enough red wine to fill a 600,000 gallon Olympic-sized swimming pool. Local authorities managed to divert the torrent into an empty field before it reached the nearby Certima River - no word yet from local field mice on how they like the vintage.
10 billion: As part of its landmark antitrust case against Google, the US Justice Department says Google spends $10 billion every year to unfairly maintain its status as the internet’s most widely used search engine. The trial opened in Washington, DC on Tuesday and is expected to go on through the winter.
Hard truths on climate, education & poverty, from the UN’s Secretary-General
(Portions of this full interview have also been shown as part of the GZERO World with Ian Bremmer episode, "How A War-Distracted World Staves Off Irreversible Damage," available to view here.
Global political division, a culture of impunity and a vacuum of consequences ... Russia's illegal invasion of Ukraine making climate change a “kind of second-order issue” (even as 50 million Pakistanis have been displaced by flooding, and more than 1,000 killed) - with "irreversible consequences" and "irreparable damage" coming "very soon" - "a world that is facing destruction everywhere" ... the threat that the world may not have enough food in 2023 due to fertilizer shortages ... there's a lot of bad news in the world, as UN Secretary-General Antonio Guterres discusses with Ian Bremmer on GZERO World.
Still, there are paths to solutions - as with the grain deal that Guterres helped to (discreetly) broker between Russia and Ukraine - if only the world's leaders will work together.
António Guterres: the world won’t have enough food in 2023 without Russian fertilizer
The UN- and Turkey-brokered deal with Russia to unblock Ukrainian grain exports stuck at Black Sea ports was a big success for the United Nations — and for Secretary-General António Guterres.
Look, he recalls he told Vladimir Putin and Volodymyr Zelensky: this is a dramatic situation caused by the war because it is threatening the living conditions of most of the world.
The UN chief tells Ian Bremmer on GZERO World that we need to find a way for Ukraine to ship its grain; and the UN hopes to negotiate with the US, the EU, and others to get some exemptions from Western sanctions against Russia so Moscow is able to export the food and fertilizer that the world needs right now.
Guterres says that this year we have enough food. But we may not in 2023 if we don't fix the fertilizer market soon.
Watch the GZERO World episode: How a war-distracted world staves off irreversible damage
- Fertil(izer) ground for a global crisis - GZERO Media ›
- War of the Sunflower Superpowers - GZERO Media ›
- Ukraine and the global food crisis: how bad will it get? - GZERO Media ›
- Big democracies that depend on Russia - GZERO Media ›
- Will UNGA act? A world of knock-on challenges as global leaders meet. - GZERO Media ›
Innovation: cause for optimism amid the global food crisis
How long will food prices keep rising? Will food itself become scarce? There's a lot of doom and gloom these days about the global food crisis, made even worse by Russia's war in Ukraine.
But there are some reasons to be hopeful, Bill & Melinda Gates Foundation CEO Mark Suzman said during a livestream conversation about the global food crisis hosted by GZERO Media in partnership with the organization he leads.
The Gates Foundation, he explained, has long been investing in innovations that can massively increase productivity by smallholder farmers across the developing world. Think drought-tolerant seeds or flood-resistant rice.
What's more, new tools like apps to customize fertilizer use and digitally map soil are becoming available to smallholders in sub-Saharan Africa and South Asia. The goal is to double smallholder productivity.
Still, Suzman points out, none of that will matter without investing more in climate adaptation — especially better use of water.
Why do the world's poorest pay more for the same food?
Smallholder farmers in developing countries currently produce about 30% of the world's food. But they are way less productive than large-scale farmers in the developed world.
Thomas Njeru, who knows a thing or two about smallholder farming because he grew up on a small farm in his native Kenya before co-founding a micro-insurance firm for smallholders, says boosting the productivity of smallholders could up global food output by 30% — more than enough to cover the 10% deficit we now face.
In a livestream discussion about the global food crisis hosted by GZERO Media in partnership with the Bill & Melinda Gates Foundation, he explains that the production capacity of smallholders will continue to be undermined by things like high fertilizer prices, resulting in tomatoes in Nairobi costing four times more than in Chicago.
The world's poorest farmers, Njeru adds, are bearing the brunt of the global food price crisis.
Global inflation shock
Ian Bremmer's Quick Take: Going to talk about inflation. Why inflation? Well, because I posted something on Twitter that sort of exploded over the course of the last couple of days, which means people are clearly interested. And I'll tell you what the tweet was, I'll show you a little post here. It said, "US: left government, high inflation. UK: right government, high inflation. Germany: centrist government, high inflation. Italy: everyone in government, high inflation. Wild guess, it's not the government." Now of course, it is government in part, but it's not the government, which is the point. In other words, no matter who you decide to elect, if it was Trump, or Biden, or Merkel, or Scholz, or Johnson, or Starmer, or Bolsonaro, or Lula, you are getting high inflation, you're getting high inflation globally. I'll talk about why that is.
Now, a lot of people went nuts and said, "How can you call the US government left?" And certainly, from a global perspective, the entire US political spectrum is kind of on the right. And from the European perspective, you wouldn't call Biden a leftist, you'd call him a centrist. You might even call him center-right? Of course, Fox News on Primetime calls Biden and the Democrats a bunch of socialists. And if I said that the US was a left government, I mean a right government, then everybody in the US explodes, so it just shows how divided and screwed up everybody generally is anyway. But leaving that all aside, the point is the point. And it's an important point, which is that we are so divided in the United States and globally that when something that really upsets us happens that we haven't seen in over a generation, which is persistent levels of very high inflation, we get really angry, and we want to blame the government and blame the government hard.
And the reality is that no matter what your government looks like, you're dealing with very high inflation. Let's be clear, this is a global inflation shock. The economic disruption hit everybody. First with the pandemic because COVID destroyed global supply chains seized up the global economy. And then after that, you've got China's zero-COVID, just as you think you're coming out, the United States, the Europeans vaxxed, and relaxed, unmasked and going out, and going about our business and the Chinese locking down Shanghai and Beijing and some of their most important ports. And we still get so many of our goods, especially the low-cost ones from China. So, that hits you with greater supply chain risk. And then on top of that, the war, the Russians invading Ukraine, leading to massive disruptions in energy, massive disruptions in food and fertilizer, all of that is increasing prices.
Now, in response to those shocks, and those are shocks that are frankly of unprecedented scope in the context of the last couple of decades, so you would expect massive inflation just on the basis of that. But on top of that, governments met the shocks with a flood of money, and of fiscal spending, and it worked. And as a consequence, you ended up with massive demand that fell on shrinkings and disrupted supply. Now this shock is being felt very differently in different regions around the world.
So for example, in Europe, you're seeing it particularly in high energy prices because of their dependence on Russia for oil and gas, vastly more so than the United States or, really anybody else. And that's really hitting the Europeans harder, it's one of the reasons why French inflation, while high, is not as high as Germany, and Italy, and the UK, because the French actually are much more reliant on domestic nuclear energy as an energy source. Didn't stop Macron from getting hit really badly though in elections over this weekend, being blamed for how badly their economy is performing. In the United Kingdom, it's also a weak currency that's helping driving inflation up even higher than it is in the United States. In the United States, supply chains are a very big piece though also the size of fiscal expansion under Trump and under Biden is a big piece of it. In emerging markets, the food crisis is the bigger piece, as well as protectionist response in a lot of those countries. But everyone is facing their variant and all of these pieces are coming together.
Now, it's very easy to criticize the United States now for doing too much fiscal spending, particularly in 2020. And we heard that from Larry Summers, and that the Fed started too late to tighten. But we should, first of all, remember that fiscal expansion is one of the very few things that Democrats and Republicans, over the last two administrations, have strongly agreed on. I mean, massive deficits being run, massive expansions in spending in the Trump White House and in the Biden White House. This was not a country that was concerned about trying to keep debt levels down. Also, you want to talk about monetary policy, the one person that Trump and Biden agree on was Powell, the Fed Chair. And so, obviously you're getting consistency in terms of policy from the Fed. The monetary response in countries, advanced industrial economies around the world, central banks are pretty independent from governments, in some cases a little less so, but nonetheless much more so than other members of cabinet, you experienced that in the United States, and this is the nature of the response.
But we should also not forget the uncertainty, the fear, the massive swings that have been occurring in supply and demand. And that we all really were feeling our way when the pandemic hit, in a dark room, and trying not to break too much furniture, trying to make sure this wasn't just a bailout for elites and big business, this was a bailout for everybody, for average citizens that were, would be hit by unemployment really, really badly. And so, yes, you erred on the side of more stimulus, and more expansion that created more of a V-shaped economic recovery, which I think at the time, everybody was breathing a collective sigh of relief.
Now inflation is going to come down as a consequence of this because these shocks are not going to be permanent. Yes, they'll be sanctions on Russia for the long-term, but the Europeans will diversify their energy supply, they will get more efficient. Yes, they'll keep coal going, but they'll also move faster on renewables over a couple of years, that's going to play out. Supply chains will get more normalized. China's zero-COVID policy will ebb away over the coming year as more Chinese get vaccinated as they have more therapeutics. Those things really do matter, they're structural.
But of course, inflation is at least as much a political phenomenon as it is economic. It creates an enormous amount of economic insecurity and leaders get blamed because they're in charge irrespective of what the causes are. So I understand it, even though there's not necessarily a lot that anyone right now can do in the nearest term to really affect it. I mean, I think that there's a good chance that Biden announces some kind of tariff relief vis-à-vis China. He's been dragging his feet on it because he doesn't want to be seen as soft on China, but he knows that would actually reduce levels of inflation in the United States, which are making him very unpopular. Some kind of gas tax holiday for the summer seems reasonably likely, maybe some green energy subsidies paid for by the government, but nonetheless would make life a little easier for the average American. But these are really at the margins, it's kind of like a Saudi energy deal is at the margins. There's nothing that's going to suddenly pre-midterm elections make this better or easier either for Biden, or for Bolsonaro, or as Macron just experienced this weekend.
My bigger concern, by the way, is that what all of this means is that governments may not have a lot of fiscal firepower left if we're now entering into a global recession. That's going to be a lot worse for developing countries that are highly indebted, and are dealing with high interest rates and aren't able to service their debt than the United States. But even the United States, it's going to have a harder time navigating the next global recession if it comes soon.
So anyway, that's where we are in inflation. It's a little bit less dramatic and hair on fire than what you see on cable, or on social media, but that's why you're here. I hope everyone's well, and I'll talk to y'all real soon.
For more of Ian Bremmer's weekly analyses, subscribe to his GZERO World newsletter at ianbremmer.bulletin.com
Ukraine's grain exports are being held hostage.
Hard Numbers: Ukraine’s food storage dilemma, American tourists behaving badly, Vietnam’s health minister in cuffs, British journalist missing in the Amazon
23.5 million: Ukraine is being forced to find storage capacity for a whopping 23.5 million tons of grain thanks to Russia’s blockade of Black Sea ports usually used to transport Ukrainian exports like corn and wheat. Kyiv is trying to up its storage capacity ahead of a summer harvest, wary that improperly stored grains can easily spoil.
150: After being criticized for a slow initial response, Brazil has deployed 150 soldiers to the Amazon to search for a British journalist who went missing on a reporting trip along with a Brazilian indigenous expert. But critics say far more people are needed to comb the vast landscape. Meanwhile, Brazil’s brash President Jair Bolsonaro blamed the men for embarking on “an unadvisable adventure” in the first place.
45: Vietnam’s Health Minister Nguyen Thanh Long has been arrested for his role in a massive price-gouging scheme of COVID-19 test kits. Long, along with the mayor of Hanoi, is accused of allowing a pharmaceutical company to inflate sale prices to hospitals and clinics by up to 45% in exchange for kickbacks.
25,000: An American tourist was slapped with a fine after throwing an electric scooter down Rome’s 18th-century Spanish Steps, causing €25,000 ($26,788) worth of damages. The Yankee was also banned from revisiting the world heritage site in the future. Damaging historical landmarks is a crime in Italy that could land an offender in prison for up to one year.This comes to you from the Signal newsletter team of GZERO Media. Subscribe for your free daily Signal today.
Workers carry boxes of bread loaves at a bakery in Beirut, Lebanon.
Hard Numbers: Lebanon’s bread crisis, US prices soar, Boris Johnson fined, Koreans start from zero
8.5: Prices for goods and services in the US have grown 8.5% over the past year, the largest annual increase since the early 1980s. Rising costs for food, housing, and fuel drove the increase, which is taxing households and shaping up to be a major problem for President Joe Biden and the Democrats as they head into midterm elections this fall.
50: British Prime Minister Boris Johnson and other top officials will be fined for breaking pandemic lockdown laws by holding parties at government buildings while ordinary Brits were prohibited even from visiting dying relatives in hospital. British authorities say more than 50 violations of the rules were confirmed.
1: Everyone in South Korea is about to get one year younger – on paper at least. To harmonize his country’s records with those in the rest of the world, president-elect Yoon Suk-yeol wants to do away with the current system in which South Koreans are aged “1” when they are born.