The International Monetary Fund issued its Regional Economic Outlook for Latin America. The overall conclusion is that growth is based largely on commodity exports, demand for which has created a risk of overheating. Tucked in there is the acknowledgment that high commodity prices include food and that high food prices make people go hungry. What to do? School lunches within the "established budget envelope" without stimulating demand. Who knew hunger was so easily solved?
Rising global prices of commodities, especially food, pose an important social challenge across the region. This applies even to countries that are net exporters of commodities and food, the report said.
To protect the poor, policies should focus on scaling up proven social safety net programs, such as targeted income transfers, school lunches, and child nutrition programs. Generalized price subsidies should be avoided as these measures are often very costly and regressive, and can turn out to be permanent—requiring large adjustments to other parts of the budget. The expansion of safety nets should take place within the established budget envelope, in some cases to avoid stimulating demand (South America), while in other cases to rebuild the policy buffers (Central America and the Caribbean).