While the inflation vs deflation debate continues to rage over the likely trajectory of the US economy, the price of food is rising rapidly – a fact that would be apparent even to Helicopter Ben if he ever went to the grocery store.
I buy a fairly regular basket of goods, and the prices for these have increased by 15-20% since the first of this year. Fortunately, this is more of an inconvenience than problem; but what about people – especially in the developing world – for whom an increase in food prices means genuine hardship?
More importantly, how many of these people are there, and what are the implications for the political stability in their countries?
Let’s look at three charts, which take the 20 most populous countries (excluding the four developed nations on the list – US, Russia, Japan and Germany) and base “poverty” on an income of less than $2 per day (on a purchasing power parity basis). Poverty data is derived from the World Bank and the CIA World Factbook.
Countries are ranked in order of overall population, except that I’ve grouped the Indian subcontinent (India, Pakistan, Bangladesh) together.
From a raw numerical perspective, India has the highest number of people living in absolute poverty, with China a distant #2.
On a percentage basis, the Indian subcontinent and the African nations rank the highest in terms of poverty.
India’s economy is slowing, as is China’s. The leadership structures of both counties know this, and are well aware of how many of their own citizens are living perilously close to the edge – and the social instability that will result from even small increases in food prices.
Has Helicopter Ben considered this side effect as he prints money to bail out the banksters?
Most likely not.