The Economist reports on a scheme being worked out by Richard Wilcox at the World Food Fund to float famine insurance on behalf of inhabitants of famine-prone  regions.  Basically, it’s probably cheaper to pay for insurance that will pay off to the inhabitants when rains fail, so that they won’t sell their tools and burn all the vegetation for firewood.

Cheaper than dealing with refugees, wars, broken economies, and failed states. Instead of having a Band-Aid to rush in aid after people start dying, insure them before the problem starts and keep them alive and the environment and the economy intact.

The Economist article notes that bad government may in many senses be responsible for famine, “But bad government is hard to measure, and therefore hard to insure against. Rainfall, by contrast, is easy to measure.”

WFP seems serious about this scheme, and says it could be up and running by 2007. No invasions or nationbuilding required. Famines prevented at less international expense than cleaning them up later, and without destroying the indigenous cultures.

Now wouldn’t that be a Merry Christmas 2007?

See “Famine insurance, Hedging against the horsemen,” Dec 9th 2004, From The Economist print edition.

-jsq