World Bank-IMF Spring Meetings Highlight Worsening Food Crises
The two leading international financial institutions are calling for urgent action to restrain rising food prices as widespread hunger and economic turmoil grip several North African, sub-Saharan African, and Middle Eastern countries. Following the 16 April joint World Bank-IMF development committee meeting in Washington, World Bank President Robert Zoellick discussed the need to act quickly on the matter, referring to it as “one shock away from a full-blown crisis.” The development committee met within the setting of the 15-17 April Annual Spring Meetings of the two Bretton Woods institutions, which draws together their Board of Governors.
The magnitude of the food crisis problem is alarming. Since June 2010, 44 million additional people are now living below the poverty line set by the World Bank - US$1.25 per day. The call for action is due to the concerns that another 10 million people may end up among the ranks of the poverty-stricken if food prices climb by a further 10 percent, and another 34 million would suffer a similar fate if prices of staples were to rise by 30 percent.
Presently, world food prices are at record highs, according to the latest report by the FAO - figures that are corroborated by the Bank, which also sees current prices surpassing those of last year by 36 percent. The prices of staple foods are of particular concern, with all easily surpassing last year’s prices: 69 percent higher for wheat, 74 percent higher for corn, and 36 percent higher for soya.
These considerations aside, concrete action will be necessary to shield the poor from further suffering, says the Bank. The World Bank proposes expanding development efforts in the agricultural sector in developing countries. Among various measures outlined in a report on food security, the Bank highlights the promotion of agricultural research in view of increasing agricultural productivity - particularly for smallholder farmers. The report also brings to the fore the importance of expanding trade and farmers’ access to markets, in addition to private sector investment.
At the global level, concerted action and cooperation can mitigate further harmful effects due to price increases, the Bank says. The institution specifically urges food producing countries to remove export restrictions. It also recommends that countries halt the conversion of food grains into biofuels in the event of high food prices. Finally, the Bank promotes the creation of social safety nets, including nutritional programmes that target the poorest.
ICTSD reporting; “Food Prices: World Bank warns millions face poverty”, BBC News, 14 April 2011; “At semi annual meeting, World Bank/IMF governors focus on food prices”, World Bank, 16 April 2011.
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