- The Washington Times - Sunday, April 13, 2008

WASHINGTON (AP) — International finance leaders are working on plans to deal with the economic crisis that has roiled nations and sent food and energy prices soaring.

The World Bank’s policy-setting committee was focusing today on the fallout on developing countries, especially poor ones where the agency is trying to help reduce poverty. The session marked the end of spring meetings for the bank and the International Monetary Fund.

As the committee began its meeting, Britain’s secretary for international development, Douglas Alexander, spoke of the need for coordinated response to the market turbulence and commodity prices.

“It will be important for the World Bank, the IMF and the U.N. to urgently work together to lead the development of an international response to address all the elements of this crisis,” he said. “We need short-term action to deal with immediate hardship.

France’s finance minister, Christine Lagarde, said the jump in food and commodity prices undermines growth prospects of some countries and affects the daily life of people.

“International financial institutions like the IMF or the World Bank need to improve their responsiveness and develop more flexible instruments to address such shocks,” Lagarde said.

In the run-up to the weekend meetings, the bank’s president cited the importance of responding “in such a way that can seize opportunities” to help developing countries improve health care and reduce malnutrition and infant mortality. Robert Zoellick said other critical issues included promoting investment in Africa, climate change and rising food prices.

“In the U.S and Europe over the last year we’ve been focused on the prices of gasoline at the pump,” Zoellick said. “While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs. And it’s getting more and more difficult every day.”

He said in many developing countries, the poor spend up to 75 percent of their income on food, so when basic food prices rise, “it hits hard.”

Zoellick has said that in order to deal with the immediate crisis, countries must close an at-least $500 million food gap identified by the U.N. World Food Program.

A similar warning on food prices came yesterday from the IMF’s head, Dominique Strauss-Kahn, who warned of dire consequences if food prices remain high in developing countries, especially in Africa.

He added that the problem could create trade imbalances that would impact major advanced economies, “so it is not only a humanitarian question.”

The development group Oxfam, a frequent IMF critic, said rich countries are largely responsible for the food crisis because they have cut aid to developing countries and encouraged biofuel production, which the IMF says is responsible for almost half the increase in the demand for food crops.

The Washington-based IMF and World Bank were established 64 years ago to respectively regulate the global economy and provide aid to poor countries to reduce poverty.

Associated Press writer Desmond Butler contributed to this report.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide