Post image for Derivatives in Ethiopia?

Derivatives in Ethiopia?

by Minority Fortune

A documentary that we watched recently Insuring Against Famine brought a possible future trend and concern to our attention: insurance against risk in third world countries aka sophisticated exploitation. Let the World Food Program tell it, they’re hoping to implement risk management policies in order to prevent catastrophes. In reality, it’s essentially insurance premiums that farmers themselves are expected to pay in order to mitigate risk in case weather-related catastrophes occur, i.e. droughts, floods, etc. Ethiopia is the guinea pig for the time being, but we can see where this is going.

Insurance companies have drained economies of countless dollars for astronomical compensation fees along with questionable accounting practices. The majority of these companies have maxed their potential in developed countries and have had their dirty laundry aired out on many different occasions. So, it’s only natural that they’re planning to prey upon developing countries for uncharted profits.

Bad Idea

It’s unacceptable that these companies are trying to convince officials of these third world countries that these risk management programs are solely for the benefit of farmers and villagers. With all of the analysis they’ve put into analyzing weather statistics, we all know they’ll charge premiums accordingly to generate a profit. Furthermore, we’re all too aware of how inefficient and slow insurance companies are about paying out for claims. For people who barely have enough for food, it’s unimaginable to take away the little money that they do have for a system that still doesn’t lead them to have self-sufficiency.

Third world countries must not fall into these traps designed by wolves in sheep clothing. They must work hard to generate self-sufficiency. Paying insurance premiums to big companies is not going to be the answer. The only thing we’re in agreement with the World Food Program about is the fact that aid programs can only react to catastrophes and do little to prevent them. Another thing we agree upon is that something must be done about that. However, we cannot stand by their risk management program. It’s not for the benefit of the people.

If you have a spare twenty minutes, we advise that you check out the video on YouTube here as it’s interesting and informative because the video cannot be embedded.

*Image courtesy of Frontier.
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