Natural Resources, Climate Change and Governance
141
Therefore, Latin America can respond to a sharp increase in world demand for
food and agri products at large. It has resources and tools. No other region in the
world has the means to do it, except probably Sub-Saharan Africa. The problem with
Africa is that although the continent has the quality of land and renewable water
to participate in the food supply expansion strategy, as mentioned earlier, there is
a severe and widespread governance problem coupled with weak property rights,
which tends to distort appropriate incentives and leads to extremely high discount
rates and thus impedes the necessary capital investments.
On the other hand, it is in Africa where the risk of hunger will remain high in
the face of stress on the food markets worldwide. In 1970, there were 950 million
people in risk of hunger, 26% of a total world population of 3.7 billion inhabitants.
In 2020, the total population in risk of hunger is estimated to be near 830 million,
11% of 7.8 billion inhabitants, whereas the forecasts for 2050 are 460 million, 4.7%
of a total population of 9735 billion inhabitants. In the face of a sharp reduction in
absolute and relative population in risk of hunger, Sub-Saharan Africa accounted for
10% in 1970, whereas it will represent more than 50% in 2050 (with rather stable
absolute numbers since 2010), Asia 35% and Latin America 2%.
14
Natural Resources, Climate Change and Conflicts
In a nutshell, increases in world population and income growth give to Latin America
the demand counterpart to expand production through agriculture. This is also true for
metals, where the region has again enormous resources to supply world demand. But,
while feasible, the “world granary strategy” has an underlying problem. An increase
in the cultivated area requires deforestation. In turn, deforestation leads to climate
change and soil pollution. Furthermore, an increase in the cultivated area may imply
population displacements in many countries and thus requires the appropriation of
aboriginal land. Higher wealth and income inequality, as well as, ethnic and social
conflicts may result.
All such trends of economic and social development may show in the future but are
already in the scene today. It is what happens in the Amazon these days. Landowners
in the south of Brazil are moving to much cheaper land in the Mato Grosso. They can
sell an acre in the south and acquire much bigger properties becoming landowners
in the north. But, on the way to this agricultural transformation entire aboriginal
communities and subsistence farmers are pushed out of their lands, and massive
deforestation is needed to prepare the land for production.
15
14 Based on UN (2019) and IASA world food system simulations, scenario FAO-REF-00 (May
2009), see also Fisher (2009). The population in risk of hunger in Sub-Saharan Africa was 85 million
in 1970, 286 million in 2020 and estimated at 240 million in 2050, whereas in East Asia falls from
500 million in 1970 to 26 million in 2050.
15 Fonseca et al. (2020). Boletim do desmatamento da Amazônia Legal (maio 2020) SAD (p. 1).
Belém: Imazon. https://imazon.org.br/publicacoes/boletim-do-desmatamento-da-amazonia-legalmaio-2020-sad/.
141
Therefore, Latin America can respond to a sharp increase in world demand for
food and agri products at large. It has resources and tools. No other region in the
world has the means to do it, except probably Sub-Saharan Africa. The problem with
Africa is that although the continent has the quality of land and renewable water
to participate in the food supply expansion strategy, as mentioned earlier, there is
a severe and widespread governance problem coupled with weak property rights,
which tends to distort appropriate incentives and leads to extremely high discount
rates and thus impedes the necessary capital investments.
On the other hand, it is in Africa where the risk of hunger will remain high in
the face of stress on the food markets worldwide. In 1970, there were 950 million
people in risk of hunger, 26% of a total world population of 3.7 billion inhabitants.
In 2020, the total population in risk of hunger is estimated to be near 830 million,
11% of 7.8 billion inhabitants, whereas the forecasts for 2050 are 460 million, 4.7%
of a total population of 9735 billion inhabitants. In the face of a sharp reduction in
absolute and relative population in risk of hunger, Sub-Saharan Africa accounted for
10% in 1970, whereas it will represent more than 50% in 2050 (with rather stable
absolute numbers since 2010), Asia 35% and Latin America 2%.
14
Natural Resources, Climate Change and Conflicts
In a nutshell, increases in world population and income growth give to Latin America
the demand counterpart to expand production through agriculture. This is also true for
metals, where the region has again enormous resources to supply world demand. But,
while feasible, the “world granary strategy” has an underlying problem. An increase
in the cultivated area requires deforestation. In turn, deforestation leads to climate
change and soil pollution. Furthermore, an increase in the cultivated area may imply
population displacements in many countries and thus requires the appropriation of
aboriginal land. Higher wealth and income inequality, as well as, ethnic and social
conflicts may result.
All such trends of economic and social development may show in the future but are
already in the scene today. It is what happens in the Amazon these days. Landowners
in the south of Brazil are moving to much cheaper land in the Mato Grosso. They can
sell an acre in the south and acquire much bigger properties becoming landowners
in the north. But, on the way to this agricultural transformation entire aboriginal
communities and subsistence farmers are pushed out of their lands, and massive
deforestation is needed to prepare the land for production.
15
14 Based on UN (2019) and IASA world food system simulations, scenario FAO-REF-00 (May
2009), see also Fisher (2009). The population in risk of hunger in Sub-Saharan Africa was 85 million
in 1970, 286 million in 2020 and estimated at 240 million in 2050, whereas in East Asia falls from
500 million in 1970 to 26 million in 2050.
15 Fonseca et al. (2020). Boletim do desmatamento da Amazônia Legal (maio 2020) SAD (p. 1).
Belém: Imazon. https://imazon.org.br/publicacoes/boletim-do-desmatamento-da-amazonia-legalmaio-2020-sad/.