- World Bank President has raised concern about a surge in food prices, fearing it could push 100 million people into deeper poverty.
Most of the affected populations live in Africa where protests against rising cost of living have been held in some countries, including Senegal, Cameroon and Tunisia.
“Based on a very rough analysis, we estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty,” said Robert Zoellick at the International Monetary Fund-World Bank Spring meetings in Washington.
“This is not just a question of short-term needs, as important as those are; this is ensuring that future generations don’t pay a price too.”
Zoellick said a “New Deal for Global Food Policy” is necessary to meet the food price crisis in the world. This includes a call for US $500 million from donor governments to bridge an immediate gap identified by the UN’s food agency, World Food Program. He said almost half of the targeted amount has been met.
Under the New Deal, the World Bank is duty-bound to provide conditional cash transfer, food-for-work programs as well as assist with new plantings.
The World Bank Group's development committee and the IMF endorsed the New Deal and other longer-term food initiatives by the bank.
Mr Zoellick said the bank's priority actions go beyond helping developing countries to meet immediate needs, but it also paved the way for an inclusive and sustainable development.
He explained the “One Percent Solution” which enables sovereign wealth funds to channel one percent of their US $3 trillion in investment potential to sub-Saharan countries, a region that reeled with soaring rise in the prices of food and other commodities.
He also reinforced the importance of the EITI++ initiative, which was launched to help countries manage and transform their natural resource wealth into long-term economic growth.
IMF Managing Director Dominique Strauss-Kahn said all the IMF’s assistance to low-income countries on economic and financial development issues “could be destroyed very rapidly by the crisis coming through the increase in food prices.” The surge in prices is expected to create "huge deficit" in trade balances capable enough to disrupt economies in low-income countries.
Zoellick said the “Bali Breakfast” of finance ministers focused on climate change strategies to meet adverse impacts of higher temperatures and more turbulent weather on agriculture. “If you’re in the developing world, it’s very frightening,” he said.
Meanwhile, the United States government has announced its commitment to respond to the world's food crisis by pumping more than US $200 million to affected countries, including those in Africa.
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