Ambassador's Corner

WEEKLY MESSAGE FROM AMBASSADOR JOHN BRUTON

May 5, 2008

The Food, Climate, Energy and Health crises – are they all linked?

I attended a very interesting meeting in Washington last weekend which prompted me to ask if there is a link between the high energy prices we are now paying, the rise in food prices that is putting millions of people at risk of starvation, the chronic health problems in poorer parts of the world that could be the seed ground for a global epidemic and climate change.

Every 30 seconds a child dies of malaria.

Every day last year 6,800 people became infected with HIV/AIDS and 95% of them were in developing countries.

Forty-four hundred children die every day from diarrhoeal illnesses arising from poor sanitation and dirty water.

The Head of the World Bank has predicted that 3.5 million children will die this year because of malnutrition and he believes that the current increase in food prices could set back the achievement of the Millennium Development Goals to reduce poverty by up to 7 years.

The current increase in energy prices will hit the poorest countries in the world hardest. These are the countries that import both food and energy. To grow food they must have fertilizer and fertilizer prices are directly linked to energy prices.

High energy prices make it more expensive to transport food from the places where it is grown to the places where those who are starving live.

Changes in climate are causing droughts which have led to crop failures which have directly contributed to the high food prices we are now experiencing.

Lack of food weakens peoples' resistance to infectious diseases, which often kill the malnourished more quickly than does the lack of food itself.

Poor countries do not have adequate health systems to deliver the medicines that could prevent some of these deaths, and to reduce suffering.

One reason for the big rise in food prices is that the newly well-off people in some developing countries are looking for lifestyles similar to the ones we have enjoyed in Europe and the United States for the last 60 years. They want motor cars. They want to eat meat at least once a day. They want access to sophisticated health treatments.

But, at least in the short term, these demands often take limited resources away from those who are more desperately in need.

The increase in the number of motor cars pushes up oil prices.

The increased demand for meat diverts grains from direct human consumption to animal feed. And the additional animals produce methane which adds to climate change.

The increased demand for sophisticated healthcare in better-off countries draws nurses and doctors out of poorer countries to work in countries that have a higher income, but a less desperate need for healthcare.

I was told that Zambia has trained 2,500 doctors in recent times, but that only 600 of them are now working in Zambia. The rest have gone to better paid jobs, in better equipped facilities, in better-off countries. At a meeting here in Washington a few weeks back organized by the AARP, the former President of Ireland, Mary Robinson, reported that in New York City alone there are 600 Ghanaian doctors whereas in the whole of Ghana there are only 1,000. “This is immoral,” she said, and she is right.

The same applies to nurses. The training of nurses is very expensive for less developed countries, but if those nurses emigrate they will not be available to dispense medicines and provide the care necessary to mitigate the spread of infectious diseases at home in their own countries. And air travel can bring those diseases to the developed world very quickly.

The reality is of course that, thanks to globalization, the world is far better off than it was 40 years ago. But there are also far more people in the world than there were 40 years ago, 3.6 billion in 1968 as opposed to 6.6 billion in 2008. This figure is projected to rise to 9 billion by the year 2050. There are far more people in the world now who are able to afford a high consumption lifestyle, similar to the one confined to parts of Europe and America 40 years ago. But that extra consumption is putting strain on world supplies of energy, food and skilled medical personnel. It is generating more climate-changing gases than were produced 40 years ago.

The free market has brought huge advances for the majority, but there still is a “market failure” as far as the position of the "bottom billion" of the world's population is concerned, to use the title of a highly regarded book on this subject.

The intellectual and policy challenge now facing the United States, the European Union, Brazil, China, and India – namely the countries who have benefitted most from the freedom that has been brought about by globalization – is to find a formula that preserves the freedom of the market, but eliminates the failures of the market as far as the "bottom billion" is concerned. This means correcting the market failures in the area of food, energy, climate change and healthcare. That requires global rules agreed in a global organization.

That was the underlying idea of the Doha Development Trade Round. But have the negotiations so far really risen to the level of the true challenge? Few would claim that they really have.

Even the most enthusiastic supporter of the free market accepts that there can be market failures, and that there are such things as public goods, i.e. services that are vital but which the market unaided will not provide (e.g., law and order, public sanitation and basic education).

If everybody in the world consumed the same sorts of products and services, in the same pattern and volume, as we do in Europe and America, do the human and physical resources exist in the world to support that level of consumption?

In other words, is the ideal lifestyle which billions of people in the world are competing to achieve a sustainable one if they all succeeded in attaining it? The answer to both questions is, "No."

If not, how do we go about helping people to aspire to something different? How do we change the incentive structures in the market to ensure that what the world’s population aspires to is sustainable in physical and human resource terms?

My own sense is that this can only be done if we strengthen global rule-making institutions – but they are very poorly funded.

Many may complain about the United Nations, but its budget is tiny in comparison to that of many big cities. The current annual budget of the United Nations lies at $15 billion compared with the annual budget of New York City, the city in which the UN headquarters are based, at $59.1 billion. Regarding financing of the UN, many countries are still in arrears, with the United States currently owing $1 billion.

The World Health Organization (WHO) spends less annually than the Gates Foundation on health and its modest budget of $440 million is insufficient to enable it to redress the huge inequalities in healthcare access in the world.

The WTO, which is the only global international organization dealing with the rules of trade between nations, merely has a budget of 180 million SF (roughly 200 million US$) and 625 staff to serve its 151 members.

I would welcome contributions from those who read this message as to how these dilemmas can be resolved.

The European Union and the United States aspire to world leadership; they have an obligation to come up with holistic answers.

Address to Congress by Taoiseach, Bertie Ahern – his stress on the importance of the European Union

My successor as Taoiseach (Prime Minister of Ireland), Bertie Ahern, addressed a joint session of Congress last week. It is an honour I enjoyed myself in 1996.

I was impressed by his emphasis on America’s contribution to resolving the long-running conflict in Ireland which, as Bertie Ahern pointed out, goes back to a European conflict of the seventeenth century. The same pragmatism that America applied in this case needs to be shown by all of us in our approach to other conflicts. It is important that the US draw confidence from its success, under successive Administrations, in building peace in Ireland and apply the same methods to other conflicts, which now appear just as intractable as the Irish one appeared to be 30 years’ ago.

I was also impressed by Bertie Ahern’s emphasis on Ireland’s rôle in the European Union, and on the importance of the European Union in creating conditions for peace and foreign investment in Ireland. He stressed the importance of the Lisbon Treaty as the next step in the development of the European Union, and I fully agree with him.

In this context, a perception that a country is full-hearted in its membership in the European Union makes it an attractive place for investment because it gives investors a sense of security. Ireland has benefitted more from foreign investment than any other country in the world, and that would not have happened without Ireland having been a full and enthusiastic member of the EU. The perception that Ireland is at the heart of EU decision-making remains very important to would be investors, especially here in America

Irish voters need to keep these essential facts in mind, and reflect on long-term interests, when deliberating on the Lisbon Treaty.

Congressman Hal Rogers

Last week I met Congressman Hal Rogers of Kentucky. He is the Senior Republican on the Homeland Security Subcommittee of the Appropriations Committee of the House. This Subcommittee controls the budget for more than 22 government agencies. Hal Rogers has given strong support to expanding the container security initiative to 58 international sea ports so as to guarantee the safety of the United States. He has worked to provide radiation monitors on the land borders of the United States, as well as in its sea ports.

We discussed the proposed introduction of 100% pre-embarkation scanning of all containers destined for the United States, regardless of risk. I expressed the view that this would not be the best use of resources and that more intrusive scanning should be concentrated on containers that are potentially more risky. The EU is working closely with the US on a risk-based system and we believe this is a better way forward.

I discussed the importance of EU to his home state of Kentucky. EU investment supports 45,000 jobs in Kentucky and the EU buys $4.6 million of exports from Kentucky every year.

The Derby

Finola and I attended the Derby in Louisville, Kentucky, as guests of our friends Al and Lee Welsh. Al is Belgian Consul in Kentucky.

It was a memorable day. Hearing “My Old Kentucky Home” sung by 150,000 race goers before the big race is a special feeling.

I backed the two horses who are trained by Irish trainers living in the United States – “Colonel John” and “Denis of Cork.” The latter came from a very bad start to win third place, and must be a major prospect in future races.

Finola says the fashion on display at the Races was second to none!

Congressman Dave Loebsack

Dave Loebsack is a first-term Congressman from the southeastern portion of the State of Iowa. He previously worked as a professor of political science.

As Dave serves on the Education and Labor Committee of the House, we had a discussion on the importance of third-level educational exchanges between the European Union and the United States. There is an agreement between the EU and the US to fund such exchanges. Iowa State University and University of Iowa have both benefited from this programme in the past. Congress has been voting insufficient funds for the US contribution to this programme and it is contracting as a result. This is unfortunate because students who have an opportunity to study in another country contribute to the building of a peaceful world.

I also stressed the importance of the economic relationship between the EU and Iowa. Fifty-seven percent of all foreign investment in Iowa comes from the EU and this supports 27,100 jobs in the state. Machinery and computer electronics top Iowa’s exports to the EU, which are worth $1.5 billion a year.

Dave Loebsack was born in Sioux City, Iowa, and I told him that the first honour I ever received in my life was that of being made an Honorary Citizen in Sioux City in 1970 when I was visiting there as a young member of the Irish parliament. I also mentioned that my Great Grand Uncle, Mike, who emigrated from Dunboyne to Iowa in 1852, is buried in Iowa City in the heart of the Congressman's district. I said that I hope to have the opportunity some time to visit his district and of paying respects to my relative.

The National Conference of State Legislatures

Last week I was honoured to be invited to address the spring Forum of the National Conference of State Legislatures. I was welcomed by Representative Donna Stone of the Delaware House of Representatives and had a very informative exchange with state legislators from all over the United States. They had come to Washington to discuss shortfalls in state budgets, water resources, mortgage foreclosures, shortages of health workers, low performing schools and public transportation. Approximately 700 legislators, legislative staff and guests attended the Forum.

Euro Challenge

On Tuesday I was in New York attending the finals of the Euro Challenge, a competition that our European Commission Delegation runs for US high school students in the 9th and 10th grades (14- to 16-year-olds) designed to promote understanding of the euro and the European Union. The exciting competitive format of the contest gives students the opportunity to learn about current economic conditions in Europe and to think about the economic policy challenges confronting countries in the euro area. I was really impressed by the depth of knowledge displayed by the students, who are freshmen and juniors in high school.

The competition was launched by the European Commission’s Delegation in the US three years ago with the support of the Federal Reserve Bank of New York and with scholarships generously provided by The Moody's Foundation. This year for the first time the programme has expanded to include schools from outside of the New York metropolitan region (preliminary rounds for the non-New York teams were held at participating EU Centers of Excellence at US universities). As a result, high schools from Florida, Michigan, North Carolina and Pennsylvania were competing alongside teams from Connecticut, New Jersey and New York. Almost 50 high schools were involved this year, and they competed for close to $20,000 in prize awards. The Moody's Foundation will also sponsor a one-day trip to Washington, DC, for the top two teams to visit the Delegation, the Federal Reserve Board and the International Monetary Fund.

First place ($7,500 for the team, or $1,500 per student) was awarded to students from Rumson Fair-Haven High School from New Jersey [pictured below]. I congratulated them on their outstanding performance, which was marked by tremendous team spirit and professionalism.

I look forward to even more schools participating next year. This really is a tremendous opportunity for young Americans to learn about the European Union and to understand the close economic and political ties that bind both sides of the Atlantic.

Please send me your comments about this or any of my weekly messages or other EU matters. I look forward to hearing from you!


 

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