TIRANA, Nov. 1 – A new report by the International Labour Organization has found that the net impact of a 10 per cent food price shock would result in an increase in poverty rates in all the developing countries, with the net poverty impact ranging from a low of 0 and 0.04 percentage points for Albania, a net importer. However, a 30 per cent increase in food prices has net poverty impacts ranging from 0.04 percentage points in Albania to 6.2 percentage points in Nepal.
The report ranks Albania in the developing or lower-middle-income countries along with Armenia, Bolivia, China, Ecuador, Egypt, Georgia, and India.
After remaining at the 4 percent ceiling during the first half of 2011, inflation pressures have dropped during the past few months, remaining within the central bank’s target of 3ѱ percent target. However, what’s more concerning is that prices of some basic products such as bread, cooking oil and sugar have increased by up to 10 percent compared to a year ago, shrinking the budgets of thousands of poor households.
Tobacco prices have also registered a sharp 18 percent rise following the increase of the excise tax from 20 lek to 70 lek per packet starting in January 2011. INSTAT data prove that differently from what the government claims, the introduction of the 10 percent excise for medicines starting from January this year has increased their prices by up to 4.7 percent.
The new “World of Work Report 2011: Making markets work for jobs” says a stalled global economic recovery has begun to dramatically affect labour markets.
The study shows that nearly two-thirds of advanced economies and half of emerging and developing economies with recent available data are once again experiencing a slowdown in employment.
The report cites three reasons for the ongoing economic slowdown: first, compared to the start of the crisis, enterprises are now in a weaker position to retain workers; second, as pressure to adopt fiscal austerity measures mount, governments are less inclined to maintain or adopt new job- and income-support programmes; and third, countries are left to act in isolation due to lack of international policy coordination.
The report calls for maintaining and in some cases strengthening pro-employment programmes, warning that efforts to reduce public debt and deficits have often disproportionately focused on labour market and social measures. For example, it shows that increasing active labour market spending by only half a percent of GDP would increase employment between 0.4% and 0.8%, depending on the country.
The study also calls for supporting investment in the real economy through financial reform and pro-investment measures.
Global Food Prices Remain High
Global food prices remain high even though the World Bank global Food Price Index remained unchanged between July and September. Despite dipping marginally in September by 1% and settling at 5% below its February peak, the food price index is still 19% above its September 2010 levels. Also, global price trends differ by commodity. Over the last quarter, an increase of 3% in the price of cereal grains was roughly offset by a 3% decline in the prices of fats and oils. Within cereal grains, the increase was driven by an increase in the price of rice (11%) and wheat (4%). Corn prices declined by 2%, as did the prices of sugar (6%) and soybean oil (2%). During the same period, average crude oil prices also declined by 7%, but the price of fertilizers increased by 3%.
