What I learned: The lesson begins by discussing global and local financial crises. It discusses the characteristic of these crises in places like Thailand (in 1998) and India. It then goes into more depth with the Southeast Asian crises on 1998. The devaluing of money, the inflation in the price of basic goods such as rice, etc. It talks about how the farmers were actually the most well off during these times, and the majority of those who suffered were the ones with "good" jobs like teachers, government members, etc. It talks about how the risk is so much different for urban workers and rural farmers. The risk is then discussed. Famers have a LOT of risks. Bad harvest is the biggest one, resulting in issues with rainfall, pests, varying income, etc. There is also a risk for those employed as "casual workers". Those who work on a day to day basis and don't have a steady income through a "nailed down" job. There's also the ones with the steady jobs, contract, and steady income. They don't have a lot of risk when it comes to their job security, but their risk comes with inflation and a suffering economy where they may be laid off or have a more difficult time surviving the economic downturn. It's then discussed how when under situations for potential risk, the people are uneducated and poor decisions regarding their job and source of income are made. Their lack of education makes these situations even harder and more negatively impactful on their lives. Of course, coping with this risk can also be a huge issue. There's the risk itself, which may be inevitably powerful (in a bad way), but how do they cope and recover? They don't. It's too difficult. This relates to the poverty trap idea, where once this risk has occurred it's difficult to develop a successful solution to cope and respond to its occurrence. Insurance is briefly discussed. The pros, cons, and overall the demand for it in these countries so that this huge risk can be taken away.
How it relates: This relates to my paper that I wrote for the World Food Prize greatly. Of course, government was my topic and played a huge role in developing my paper. All of the risks that every person (for the most part) in a developing country faces are serious. In the U.S. of course we have economic risks also. Who doesn't? The difference is the insurance that we have to cover these risks. With more research, I could see if these risks previously discussed directly relate to Sudan. If not, which risks do. From then, once my small scale governments are proving to be more successful, insurance could be a great idea to help the overall lifestyle and success of the Sudanese people. Like I said though, at this point the governments would have to be very successful and be able to fund such a thing. Economic prosperity would need to be on the rise.
How does a developing country and their citizens afford insurance on crops/livestock like we do in the US? Who would sell that to them? Seems like a high risk for insurers too.
ReplyDeleteThe form of insurance being offered to these people would have to be much different than the typical insurance offered in the United States. It would have to be on a smaller scale and possible less include. A "starter" insurance per say.
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