Monday, April 14, 2008

World Bank to Meet as Rising Food Prices Spark Unrest

World Bank to Meet as Rising Food Prices Spark Unrest

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Washington - The World Bank meets here Sunday as rising food prices spark deadly unrest in developing countries, underscoring the urgency of getting food aid to desperate people.

Policymakers of the anti-poverty bank are due to discuss a massive, coordinated international plan to reduce hunger announced less than two weeks ago by the head of the bank, Robert Zoellick.

With soaring food prices threatening political stability in poor countries, Zoellick called for a "new deal" for global food policy, similar in scope to a 1930s program under US president Franklin D. Roosevelt that tackled the problems of the Great Depression.

The World Bank meeting comes against a backdrop of a mounting global financial crisis, a US economy teetering on recession, high energy prices and currency market imbalances.

Escalating inflation is complicating policymakers' efforts to revive stuttering economic growth.

The 185-nation bank's sister institution, the International Monetary Fund, issued a dire warning Saturday about the food crisis at their spring meetings in Washington.

"Food prices, if they go on like they are doing today ... the consequences will be terrible," IMF managing director Dominque Strauss-Kahn said.

"Hundreds of thousands of people will be starving ... (leading) to disruption of the economic environment," Strauss-Kahn told a news conference at the close of the IMF meeting.

Development gains made in the past five or 10 years could be "totally destroyed," he said, warning that social unrest could even lead to war.

"As we know, learning from the past, those kind of questions sometimes end in war," he said. If the world wanted to avoid "these terrible consequences," then rising prices had to be tackled.

Skyrocketing prices on rice, wheat, corn and other staple foods like milk particularly hurt developing nations, where the bulk of income is spent on the bare necessities for survival.

According to a World Bank policy note released this past week, increases in global wheat prices reached 181 percent over the 36 months leading up to last February, and overall global food prices increased by 83 percent.

Food crop prices are expected to remain high in 2008 and 2009 and then begin to decline, but they are likely to remain well above the 2004 levels through 2015 for most food crops, the document warned.

"The poor are not just facing higher food prices but also higher energy costs, which is a worrying combination," said Danny Leipziger, a World Bank Group vice president.

In recent months, rising food costs have lead to violent protests in Egypt, Cameroon, Ivory Coast, Mauritania, Ethiopia, Madagascar, the Philippines, Indonesia and other countries in the past month.

Haiti's prime minister was ousted Saturday in a no-confidence vote after more than a week of violent demonstrations over rocketing food and fuel prices.

In Pakistan and Thailand, army troops have been deployed to avoid the seizure of food from fields and warehouses.

Thirty-seven countries currently face food crises, according to the Food and Agriculture Organization.

Zoellick is urging countries to provide the minimum 500 million dollars immediately sought by the World Food Program in the mounting food crisis.

The World Bank plans to nearly double its lending for agriculture in Africa, to to 800 million dollars."

Zoellick proposed three other measures to soften the impact of a slowing world economy on the most vulnerable countries: investment in Africa by sovereign wealth funds; strengthening a 2002 initiative to improve governance in resource-rich countries; and conclusion of the World Trade Organization's trade liberalization negotiations.

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