While the rest of us are feeling the pinch, Barclays Bank seems to have money to burn. Last week, the bank announced it would offer cash to schools. Surely not an attempt to soften government criticism as Barclays prepares to announce its bonuses, with chief executive Bob Diamond in line for $15 million...?
Another beneficiary will be this week’s festival of neoliberalism, the World Economic Forum – the annual gathering of world leaders and tycoons that is sponsored by Barclays.
But their carve-up won’t go unchallenged: the Public Eye Awards will be held alongside the World Economic Forum to shine a light on some of the worst impacts of corporate activities. Barclays is in the running for the awards, in recognition of its profiting from hunger. Research for the World Development Movement estimates that Barclays made up to $530 million in 2010 by speculating on food – effectively betting on food prices in financial markets, contributing to huge spikes and crashes in the cost of food, and fuelling hunger and poverty around the world.
In the second half of 2010, for example, the price of maize – a staple food in many countries – rose 73 per cent. In those six months, rising food prices drove 44 million people into extreme poverty. Fanice Munhonja Ongala from Nairobi told the World Development Movement: ‘When food prices shot up, we could only afford to eat ugali [the maize-based staple] on its own and sometimes we had to go without food.’ High food prices don’t simply mean malnutrition, but also people having to take on debt and cut spending on medicines or school fees so they can buy food. Children, women and the elderly are hardest hit.
Food speculation is rife in the City of London and other financial centres, so why single out Barclays? Because Barclays, the world’s fourth largest bank, has aggressively expanded its speculation on food in recent years. It has pioneered new ways for other investors to bet on food prices, magnifying the cycle of boom and bust. Barclays dominates the UK market and enjoys close ties to the government; it held 15 meetings with Treasury ministers within a year of the Conservative-Liberal Democrat coalition coming to power. So it’s hardly surprising that UK ministers are now working to water down European plans to curb food speculation before the legislation passes later this year. If they succeed, banks will go on profiteering at the expense of people facing hunger.
Barclays has some stiff competition for the Public Eye Awards. It’s up against Syngenta for poisonous pesticides, Samsung for causing cancer among workers, a dam that will devastate a huge area of the Amazon, and the company responsible for the Fukushima nuclear plant. Also on the list is US mining company Freeport McMoran, accused of contaminating a huge swathe of West Papua and dealing brutally with striking workers. The World Development Movement has been a part of the campaign against those abuses in the past. The breadth and depth of these outrages shows the urgent need not only for a change in practice by individual corporations, but for binding rules and a deep shift in favour of social and environmental justice.
Public pressure against food speculation is building. Some 25,000 people have written to decision-makers via the World Development Movement, demanding that regulators crack down on this practice. The New Internationalist’s feature on the ‘food rush’ was one of the magazine’s most read pieces of 2011. But we still need to do more to counter the banking lobby and prevent UK ministers scuppering our opportunity to end betting on food prices. By voting before Thursday to shame Barclays in the Public Eye Awards, you can strengthen the movement to end hunger and create a just food system.
Amy Horton is a food justice campaigner at the World Development Movement.
To see more about the November 2011 issue of New Internationalist on Banking on Hunger, click here.