World Bank looks to G8 Summit to quell food crisis fears

Posted by Isobel Drake on 3rd July 2008

World Bank Group President, Robert Zoellick, has called on leaders of the G8 as well as the major oil producers to act now to deal with surging food and energy prices, warning that the world is now “entering a danger zone”.

Mr Zoellick outlined his fears in a letter to the head of the imminent G8 summit in Japan, in which the World Bank, World Food Program (WFP) and International Monetary Fund estimate that about $10 billion is needed to meet short term needs of people hit hardest by the crisis.

“What we are witnessing is not a natural disaster — a silent tsunami or a perfect storm: It is a man-made catastrophe, and as such must be fixed by people,” Mr Zoellick proclaimed. “I urge the Group of Eight countries, in concert with major oil producers, to act now to address this crisis. This is a test of the global system to help the most vulnerable, and it cannot afford to fail.”

Mr Zoellick added that the concerns were snowballing and leading to global instability. “Record oil prices and high and rising food costs threaten a growing number of countries with rising poverty and social instability. Already we have seen food riots in over 30 countries, and unrest over high fuel prices is spreading. The urban poor are especially affected by the double hit of food and fuel.”Mr Zoellick said the crisis was so widespread that the Bank has already provided funding for 12 countries from a $200 million grant fund, which is part of an overall $1.2 billion rapid financing facility to offer prompt assistance. The Bank also has almost $400 million of additional new requests from 31 countries.

Mr Zoellick reported that another pressing need was to get seed and fertilizers to small farmers, especially in Africa and for countries to ease export bans and restrictions which he said have contributed to higher world food prices. He said some 26 net food exporting countries have maintained or introduced such measures.

Fertiliser prices have shot up in the past year but there has been little media coverage about them when compared to the glut of reports on the “food crisis”. The price of food has consequently not just been skyrocketing because of a shortage, fuel costs, speculators and biofuels, but also due to drastic increases in fertiliser prices.

Mr Zoellick believes the Group of Eight need to work with the UN to call on governments around the world to ensure access to local purchases for the WFP and for humanitarian purposes. In his letter, Mr Zoellick urged the G8 to consider two new measures to “improve the world’s ability to cope with an on-going food crisis”.

The first was a UN assessment on guaranteeing a portion of funding for the World Food Program. The second was to study the merits of an internationally coordinated “virtual” humanitarian strategic reserve system for food emergencies.

“The international community is facing an unprecedented test in this new era of globalization: the question is whether we can act swiftly to help those most in need,” he stated. “For globalization to work successfully and achieve its promise, it must be inclusive and sustainable. This means acting now in the interests of the poor who are most affected by this double jeopardy of food and fuel crisis, and who are least able to help themselves. ”

The G8 summit, which reportedly will have a strong focus on means to deal with rising food prices, runs for three days and begins on July 7.