Oil, food price spikes may worsen global poverty: IMF

[N.Sukumar]

Rocketing oil and food prices are being increasingly felt around the
globe and surging commodity prices could worsen poverty in many poor
countries, the International Monetary Fund warned.


A new IMF study, looking at the impact of soaring oil and food costs,
said many poor and developing countries will likely have to change
their economic policies in response to soaring commodity prices.

"Some countries are at a tipping point," cautioned IMF managing
director Dominique Strauss-Kahn on Tuesday.

"If food prices rise further and oil prices stay the same, some
governments will no longer be able to feed their people and at the
same time maintain stability in their economies," Strauss-Kahn said.

The IMF chief called for a "broad cooperative approach" to help tackle
higher oil and food prices, and said the multilateral lender and
guardian of global financial stability stood ready to assist countries
in need.

Strauss-Kahn said the international community would also have to play
a role in helping to lessen the impact of commodity price shocks which
have triggered protests in some countries.

European truckers have blockaded major roads to protest fuel prices in
recent weeks and food riots have occurred in Cameroon, Bangladesh, and
Somalia among other countries in recent months.

The IMF report, which echoes food price concerns already expressed by
the United Nations, showed that poorer countries are having to pay out
billions of dollars more for imported oil and foodstuffs.

Its findings were released as world oil prices continued to roil near
record highs of around 142 dollars a barrel.

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