Jonathan Brun

Alleviating Poverty through Markets

A June article in Harper’s magazine was fairly negative on the prospects of alleviating world hunger through the development of commodities market. Basically, the article outlines why markets do not work to alleviate poverty, citing examples such as the Irish Famine, Ethiopian famine and last summer’s spike in grain and other prices. The author is clearly coming from a socialist, markets can be ugly school. That does not mean he is incorrect, but I do think it contradicts the empirical evidence. There is very little starvation in economies with lubricated, but regulated, markets. If you are curious, the full article can be found here: Poverty Article

Since I have too much time on my hands, I wrote to the magazine and they published my letter along with a response from the author. Pick up this month’s Harper’s to see it (edited) on old fashion pulp and paper. Either way, Harper’s has some great articles and the subscription is a paltry 20$, I do recommend you check it out.

My response:
Last summer, I travelled to Ethiopia to speak with the people setting up the Ethiopian Commodities Exchange (ECX) and I can assure you that the goal of the program is not to encourage speculation. No one imagines an uneducated rural farmer becoming a sophisticated commodities trader. Currently, produce is mostly sold locally (within 10 kms of production) and is subject to huge fluctuations in supply and demand, as farmers in a region tend to produce the same produce, flooding a local market at harvest. In fact, a marketplace for agricultural commodities will in all likelihood help stabilize food prices compared to the huge variations currently seen in villages across Africa.
I encourage readers to consult Dr. Eleni Gabre-Madhin’s (the CEO of the ECX) TED talk where she explains the logic and purpose of the ECX. Also, the ECX will set-up numerous warehouses throughout the country to stock food – not a unique one in the capital as Mr. Frederick Kaufman claims. Currently, farmers are unable to reliably store food for future sale; they lack the knowledge and infrastructure to do so, unsold food rots and goes to waste. By delivering the produce to climate controlled warehouses, stocks will be built up – ensuring a consistent flow of food.
The Chicago Board of Exchange helped build the united states and the midwest into a world power – delivering cheaper and cheaper food to drive innovation in the cities that in turn helped the country prosper. Cheap, reliable sources of food is essential to the growth of a nation – and regulated markets are the best mechanism to deliver that food.
Markets are not the only solution to world hunger, but Mr. Kaufman is incorrect in his conclusion that they will not help alleviate it. Money can feed people and with farmers comprising 80% of Ethiopian population, it is high time they gain access to a stable and transparent market for their produce.

Published on July 16, 2009

Zanzibar to Ethiopia

Got in some amazing diving in Zanzibar. The corals were very good, but the highlight was definitely the dive with sea turtles and dolphins near an atoll off the eastern coast of Zanzibar. Spent a day in a spice plantation, where they grow every imaginable spice. Very agronomically rich island. The beaches are pristine and the traditional sailing boats definitely add to the charm.

In the spirit of going from one extreme to another, I flew from tranquil Zanzibar to crazy Addis Ababa, the capital of Ethiopia. I spent two days wandering around the city, visiting the churches, the cultural museum where they display and discuss the many insane Ethiopian tribes (lip extension, neck extension, running on bulls…), then paid my respects to our oldest ancestor dubbed “Lucy”, she is 3.3 million years old and represents the step between Apes and Men – unbelievable. Also visited the Mercato (the largest market in Africa) where they sell every imaginable item.

As of yesterday, I am safely in the city of Harar, near the Somali-Eritria border. It took 10 hours by bus, but it was worth it. The city was founded in the 7th century and is truly a throwback in time. Magical place.

Spent the afternoon chewing a plant called “chat”, a mild intoxicant the entire city is addicted to, with some locals; discussing Rastafarianism, AIDs in Africa and their desire to come to the West. On a side note, the coffee here is the best I have ever had. Also fed a hyena from my mouth, and visiting the sites such as Arthur Rembaud’s house and getting lost in the maze of alleyways.
I should be here for another day and then off to a national park, then back to Addis Abada (the capital) where I will be meeting with the people from the Ethiopia Commodities Exchange to write an article about them which I hope to get published (See the TED talk by Dr Eleni for more information).
Published on May 21, 2008