Food Prices at Dangerous Levels: World Bank Chief
World Bank chief Robert Zoellick Tuesday said global food prices have reached dangerous levels that could complicate fragile political and social conditions in the Middle East, and warned that their impact also bears watching across Central Asia.
World Bank data released Tuesday showed higher food prices has pushed 44 million more people into extreme poverty since June 2010 in developing countries.
Zoellick said although higher food prices were not the main reason that led to violent protests in Egypt and Tunisia, it was an aggravating factor and could become worse.
He warned that a sharp rise in food prices across Central Asia could also have social and political implications for that region.
"There is no room for complacency," Zoellick said. "Global food prices are now at dangerous levels and it is also clear that recent food price rises for food are causing pain and suffering for poor people around the globe."
The World Bank report comes days before a meeting of the Group of 20 major economies in Paris, where higher food prices—and the reason for it—will be discussed.
Zoellick said he was concerned that as countries such as Egypt, Tunisia and Jordan address causes of their social upheaval, higher food prices may add to "the fragility that is always there any time you have revolutions and transitions."
The World Bank chief said the international community needed to be aware of such risks and should not exacerbate problems by imposing policies, such as export bans, that would push global food prices even higher.
Catastrophic storms and droughts have hurt the world's leading agriculture-producing countries, including flooding and a massive cyclone in Australia, major winter storms in the United States, and fires last year in Russia.
Zoellick said a World Bank team was currently in Tunisia taking a closer look at the country's transition and assessing whether it needs World Bank financial assistance.
He suggested that Egypt may not need additional World Bank financing because its financing situation "is one that should be able to be managed."
The Washington-based poverty-fighting institution said its food price index increased by 15 percent between October 2010 and January 2011 and is just 3 percent below its 2008 peak during the last food price crisis.
But unlike during the 2007-2008 food crisis, higher prices have not yet affected all regions of the world.
Across Asia and in some parts of Latin America, Eastern Europe and Central Asia countries, costlier food is pushing up inflationary pressures, while good harvests in Sub-Saharan Africa have so far spared that region from rising prices.
Zoellick said there was less margin for error in Africa because of the high poverty rates across the region, although he noted problems in Burundi and Cameroon where bean prices, an important food source, have risen by well over 40 percent.
Surveys show that the poor spend more than 80 percent of their total disposable income on basic foods, and if prices rise poor families have no alternative but to eat less.
The Bank said rich donor countries needed to focus food aid on countries such as Afghanistan, Democratic Republic of Congo, Kyrgyzstan and Mongolia, which face large food price spikes.
The bank said the international community should take steps to calm jittery commodity markets. It also urged poor nations to scale up social programs to ensure that the poor are protected from the rising prices.
Meanwhile, countries that are large net commodity importers with low international foreign exchange reserves and limited space in their budgets may need funding to help them deal with rising food prices, the World Bank said.
Copyright 2011 Thomson Reuters. Click for restrictions.
World Bank data released Tuesday showed higher food prices has pushed 44 million more people into extreme poverty since June 2010 in developing countries.
Zoellick said although higher food prices were not the main reason that led to violent protests in Egypt and Tunisia, it was an aggravating factor and could become worse.
He warned that a sharp rise in food prices across Central Asia could also have social and political implications for that region.
"There is no room for complacency," Zoellick said. "Global food prices are now at dangerous levels and it is also clear that recent food price rises for food are causing pain and suffering for poor people around the globe."
The World Bank report comes days before a meeting of the Group of 20 major economies in Paris, where higher food prices—and the reason for it—will be discussed.
Zoellick said he was concerned that as countries such as Egypt, Tunisia and Jordan address causes of their social upheaval, higher food prices may add to "the fragility that is always there any time you have revolutions and transitions."
The World Bank chief said the international community needed to be aware of such risks and should not exacerbate problems by imposing policies, such as export bans, that would push global food prices even higher.
Catastrophic storms and droughts have hurt the world's leading agriculture-producing countries, including flooding and a massive cyclone in Australia, major winter storms in the United States, and fires last year in Russia.
Zoellick said a World Bank team was currently in Tunisia taking a closer look at the country's transition and assessing whether it needs World Bank financial assistance.
He suggested that Egypt may not need additional World Bank financing because its financing situation "is one that should be able to be managed."
The Washington-based poverty-fighting institution said its food price index increased by 15 percent between October 2010 and January 2011 and is just 3 percent below its 2008 peak during the last food price crisis.
But unlike during the 2007-2008 food crisis, higher prices have not yet affected all regions of the world.
Across Asia and in some parts of Latin America, Eastern Europe and Central Asia countries, costlier food is pushing up inflationary pressures, while good harvests in Sub-Saharan Africa have so far spared that region from rising prices.
Zoellick said there was less margin for error in Africa because of the high poverty rates across the region, although he noted problems in Burundi and Cameroon where bean prices, an important food source, have risen by well over 40 percent.
Surveys show that the poor spend more than 80 percent of their total disposable income on basic foods, and if prices rise poor families have no alternative but to eat less.
The Bank said rich donor countries needed to focus food aid on countries such as Afghanistan, Democratic Republic of Congo, Kyrgyzstan and Mongolia, which face large food price spikes.
The bank said the international community should take steps to calm jittery commodity markets. It also urged poor nations to scale up social programs to ensure that the poor are protected from the rising prices.
Meanwhile, countries that are large net commodity importers with low international foreign exchange reserves and limited space in their budgets may need funding to help them deal with rising food prices, the World Bank said.
Copyright 2011 Thomson Reuters. Click for restrictions.
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