http://www.nytimes.com/2008/04/26/business/worldbusiness/26food.html?ei=5088&en=4a8986e3fc39d79f&ex=1367035200&partner=rssnyt&emc=rss&pagewanted=print

http://www.nytimes.com/2008/04/26/business/worldbusiness/26food.html?ei=5088&en=4a8986e3fc39d79f&ex=1367035200&partner=rssnyt&emc=rss&pagewanted=print

EU braces for inflation surge, warning poor will be hurt

The New York Times

Monday 28 April 2008

BRUSSELS, Belgium (AP) -- Europe is suffering from ''a very strong inflationary shock'' with food prices soaring and the cost of oil hitting record highs, the EU's top economic official said Monday.

People with lower incomes will be hurt first as high prices make it increasingly difficult to avoid the global slowdown, EU Economic and Monetary Commissioner Joaquin Almunia said.

The EU is now predicting that inflation in the euro economy would rise more than a full point to an average 3.2 percent this year, from 2.1 percent last year. That is far above the European Central Bank's recommended guideline of just under 2 percent.

The EU also cut its growth forecast for the 15-nation currency zone Monday to 1.7 percent, well below growth of 2.6 percent last year, saying the current outlook was ''unusually uncertain.''

The EU executive insisted that Europe is resilient and far from recession, but warned that a possible inflation spiral and any deeper impact on the economy from a banking crisis would choke growth.

Inflation is one of Europe's biggest worries, sapping household spending as oil prices race to new highs and food prices soar on higher world demand. That has handuffed the central bank as far as rate cuts, which could provide a much needed boost to the economy.

Almunia said it was crucial to avoid anything -- such as large wage hikes -- that would trigger further price rises and put severe pressure on the poorest and most vulnerable people.

''Inflation has become a major problem for all of us,'' he told reporters.

''With the present level of oil prices above $100 per barrel and with the high increase in food and other commodity prices we are suffering a very strong inflationary shock with ... very strong consequences on our consumers and on the functioning of our economies,'' he said.

Light, sweet crude for June delivery rose to a record $119.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract eased back to $119.04 a barrel by afternoon in Europe, up 52 cents from Friday's close of $118.52.

Almunia said the EU assumes average oil prices will stay above $100 throughout 2009.

High prices for food, oil and metals risks worsening inflation because the can leach into the production costs for other goods, the EU report said.

And a weak U.S. dollar will likely hit European exporters harder in the future, the EU said, indicating a shift from earlier predictions that Europe would escape largely unscathed.

''The negative impact on euro-area exports is likely to be larger in the future than it has been in the recent past, due to the usual lags in the reaction of trade to exchange rate developments and cooling global growth,'' it said.

http://www.nytimes.com/aponline/business/AP-EU-Economy.html?sq=food%20costs&st=nyt&scp=2&pagewanted=print

Odd Couple of the Jungle

The New York Times

Sunday 27 April 2008

Douglas McMeekin was a failed businessman in Kentucky, and Juan Kunchikuy was a hunter in a remote nook of the Amazon rain forest who killed monkeys, deer and wild pigs with a blowgun and poison darts.

Now this unlikely pair has joined forces in a remarkable campaign to save the rain forest, “the lungs of the earth” that suck up the carbon we spew out. Of all the struggles to fight climate change, this is one of the more quixotic — and inspiring.

The Amazon rain forest that both men treasure is being hacked down, along with other tropical forests around the world. More than half of the world’s tropical rain forest is already gone, and every second of every day, another football-field-size chunk is destroyed.

Mr. McMeekin, now 65, started out not as an environmentalist but as an entrepreneur running a hodgepodge of small businesses in Lexington, Ky., employing about 50 people. In the 1982 recession, he went bankrupt.

Pained and disillusioned, he decided to go far away — to Ecuador, where he eventually found work in the Amazon as a liaison between international oil companies and indigenous tribes. He came to love the people, and his heart went out to them.

In school, Mr. McMeekin had suffered from undiagnosed dyslexia. “I was just a ‘dumb kid,’ and carrying that burden is difficult,” he recalled. The stigma left him empathizing with the Amazon natives, who were often scorned by outsiders as slow and backward because they were unschooled.

Mr. McMeekin began the Yachana Foundation in 1991 to promote education among natives of the Amazon, and in the course of his travels by canoe (there are few roads in the region), he met Mr. Kunchikuy, then a boy living in a cluster of huts a five-hour walk from any other village. Mr. Kunchikuy and his family were semi-nomadic, speaking an obscure tribal language (his real name is Tzerem, but an Ecuadorian official filling out his birth certificate turned that into “Juan”). They survived largely by hunting with darts tipped with home-made curare poison.

Mr. Kunchikuy was one of 12 siblings, of whom five died in childhood. One of his grandfathers was speared to death in a war with a rival tribe; another grandfather adorned his house with the shrunken heads of enemies he had killed.

At the time, in 1995, Mr. McMeekin was building an eco-lodge in the jungle for American tourists, to finance his dreams of promoting education for local people. So he invited the boy to move to the lodge and work and study. At the age of 17, Mr. Kunchikuy left his pocket of the rain forest for the first time — and encountered such wonders as shoes, electricity, running water, telephones and cars.

It was soon obvious that Mr. Kunchikuy had a first-rate mind, so Mr. McMeekin sponsored his education and a home-stay visit to Boston, where in the winter he encountered a puzzling white substance that was very cold. His tribal language, Shiwiar, has no word for snow, ice, freezing or even anything very cold. So after his return, it was tough to describe to his friends how his host family had taken him ice skating and snow-boarding.

Mr. Kunchikuy now speaks fluent English, on top of his other languages — Shiwiar, Spanish, Quichua, Achuar and Shuar, not to mention his mastery at calling monkeys and birds in the jungle. He became a naturalist and guide at the Yachana Foundation’s 18-room eco-lodge, which tourists reach by riding in a canoe for nearly three hours.

Now 30, Mr. Kunchikuy points wildlife out to American tourists and demonstrates that grubs can be tasty. He also displays his impressive collection of scars, from vampire bats, a piranha, a caiman, a stingray, and a shaman who operated on his chest to block another shaman’s black magic. In his spare time, he demonstrates how to shoot a blowgun.

“It has a range of up to 150 feet,” he explained. “It’s better than a shotgun, because it’s silent. You can shoot repeatedly if you miss the first time.” (Keep an eye on nytimes.com in the coming days for a video of Mr. Kunchikuy using his blowgun to spear a papaya balanced on my head — but don’t tell my wife.)

Yet the traditions he grew up with are eroding, much like the rain forest. Loggers are chipping inexorably away at the Amazon, robbing the planet of biodiversity and of a great carbon sink that absorbs our greenhouse gas emissions. On top of that, the deforestation itself, including slash-and-burn clearing, accounts for 20 percent of global carbon emissions, the same amount as that produced by the United States or China. Several studies declare that the low-hanging fruit in the war against climate change is keeping these forests alive.

In my next column, on Thursday, I’ll tell you how Mr. McMeekin and Mr. Kunchikuy are doing just that.