World entering danger zone on prices, WB warns G-8

[SUKU Kupaai]

WASHINGTON: World Bank Group President Robert B. 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."

Zoellick's call is contained in a letter to the head of the upcoming
G8 summit in Japan, in which the Bank, World Food Programme (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," Zoellick said.

"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."

Zoellick said: "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."

He 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. But he said the Bank currently has almost
$400 million of additional new requests from 31 countries.

"These calls for help outstrip our available grant resources. The
rapid financing facility includes, however, a multi-donor trust fund
that is up-and-running, ready to be of immediate help. Donors should
use this as a vehicle to provide help fast. "

In his letter, 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 Programme. 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 globalisation: the question is whether we can act swiftly
to help those most in need," he said.

"For globalisation 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."


N.Sukumar
Research Analyst
www.kences1.blogspot.com