As part of the Swiss Re delegation at WEF Davos last week, I made a point of signing the UN Zero Hunger Challenge, committing to work actively to eradicate hunger in the world. http://www.un.org/en/zerohunger/
Having lived and worked in Asia and Africa, this is not just very close to my heart, it is also one of the goals I have set myself as Chairman of Swiss Re's Global Partnerships.
A few minutes after signing up for Zero Hunger, I joined a panel launching the African Risk Capacity (ARC), a specialised agency of the African Union to set up insurance for Sovereign Disaster Risk Solutions, focusing on the cost of drought in Africa. http://www.africanriskcapacity.org/about/arcsecretariat
Africa is a continent which, perhaps more than any other part of the world, is suffering from the impact of global warming. By 2020, it is forecast that between 75 and 250 million people in Africa will be exposed to increased water stress due to climate change. Over the same period in some African countries, yields from rain-fed agriculture could be reduced by up to 50%. Concurrently, the population is projected to rise by 25%.
In many African countries, these factors are likely to severely compromise agricultural production, including access to food. It goes without saying that this threat will adversely affect food security and exacerbate malnutrition further.
I believe the ARC could turn the tables on this bleak scenario, and become a real game-changer for Africa. And this is not just because I work with risk management strategies for a living. Sovereign risk management provides several African nations with a means to pool their risks and resources, and so channel funds to where they are needed, when they are needed. This approach will help ease pressure on government funds in the case of a catastrophic event, and at the same time support investor confidence in the countries subscribing to ARC.
These days, food security is treated very much as a global concern. But the truth is, the issue of food security is exceedingly localised. So what we need to do is help every farmer stay on the farm and continue to make a living and, over time, build a business to create the first seeds of wealth.
That's why microinsurance programmes, such as R4 (The Rural Resilience) pilot that Swiss Re is partnering in Ethiopia and Senegal, or Kilimo Salama in Kenya, are real life lines. But we also need to help governments help their people and secure the economy when disaster strikes. This is where sovereign risk pools – like ARC – can make a difference.
By establishing an effective "top down – bottom up" strategy to enable food security, we also contribute to supporting real economic growth in Africa. It's the combination of sovereign risk pools and effective micro-insurance programmes for farmers that will drive this development.
Besides ARC, another important partnership, catalysed in June 2011, is Grow Africa. This is a regional partnership co-convened by the African Union, the New Partnership for Africa’s Development (NEPAD) and the World Economic Forum, to accelerate investments for sustainable growth in African agriculture.
So far, Grow Africa has mobilised over US $5 billion in investment commitments in nine countries, executed in alignment with national plans, and building partnerships around shared goals and commitments.
Ultimately it's all about collaboration, about working in partnership - across regions, countries and continents - to ensure we can build an equitable, sustainable future for us all on the road to a 9 billion world population.
As a final word: If you have not already done so, I encourage you to watch Swiss Re's video (see above) on partnering for food security. It outlines challenges and solutions to food security in a very compelling way!
Category: Food security: Farming, Climate/natural disasters: Climate change