During the past two months we have seen Governments commit more than USD 3000 billion towards stabilizing financial markets. A further USD 2000 billion have already been announced for economic stimulus packages. Never in the history of humankind has so much money been allocated with so little preparation and strategic analyses.

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Like earthquake aftershocks, the on-going repercussions of the stock market plunge triggered by the US subprime mortgage meltdown continue to shake financial and banking institutions. Governments and multilateral organisations alike are devoting all their energy and ingenuity to fighting this crisis, shelving the handling of other crises till later. However, while the financial markets panic, the food and energy crises remain and their effects, of structural origin, are likely to be exacerbated by the financial turmoil. Indeed, as a result of incoherent investment, insufficient competitiveness and trade imbalances, food and energy production no longer suffices to cater for the needs of the world’s ever-increasing population. The slightest provocation, whether climactic or political, could trigger price hikes and trade restrictions. And yet, because of the financial crisis, substantial return-hungry capital is now available together with the instruments of globalisation to assist its circulation. In other words, the stage is set for more speculative bubbles to inflate at the slightest whim or event. Harvests have been good and, like oil prices, cereal prices have dipped. However, they could surge quickly, foiling producers’ forecasts and upsetting measures to instil the long term stability required by investment.

It is even possible that the first signs of growth could fuel speculative conduct, as investors anticipate renewed consumer spending.

The challenge is therefore two-fold. On the one hand, we need to achieve a better balance between supply, trade and demand by improving the structure of local and world markets. On the other, we need to regulate capital movements as investors hunt for quick returns.

Attention should not focus exclusively on financial issues. Though regulations are necessary, they will only handle part of the problem and probably not the most important part at that. Food and energy production also needs to be rethought on a global scale and that includes implementing measures to stimulate development on the basis of models that are both sustainable and equitable.

Failing this, crises will simply continue to erupt, ever faster and ever more brutally, until the imbalances lead to intolerable inequalities, the large-scale destruction of public goods and ultimately to a situation where a coherent system is no longer even conceivable.

May those who proclaim that improving capital market mechanics is all that is needed to solve these problems reflect a little, because they too will be swept up with the others in the debacle.

Exchange with the members of the blog, live from the 3rd edition of the European Development Days, Europe’s first meeting of development cooperation practitioners and decision-makers that will take place in Strasbourg on the 15-17 November. On this occasion, laptop computer will be available on the French Presidency stand so you will be able to participate to the debate. The members present in Strasbourg will come to the stand to react in live to your comments. Come and share your thoughts on the topic.

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Demographic growth, industrialisation and the increase of demand resulting from higher living standards is exerting growing pressure on the world’s natural resources. The effects of climate change are also showing their first impacts on some of the regions of the world that are least equipped to manage them. How can these pressures be handled on the long run? What role can public policies play to tackle this rising challenge?

On the occasion of the 6th AFD/EUDN conference on “Population and natural resources: managing pressure”, I evoke in this brief video clip the dual challenge of mounting environmental pressure and demographic explosion in Sub-Saharan Africa – that I think has not sufficiently made its way at the front of the development community’s preoccupations. I also attach some of my recent publications on these two topics, as well as a recent study on the trends of African demographics. I am looking forward to reading your thoughts and experiences on this crucial issue.

Jean-Michel

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