April 11, 2008 – The crisis of surging food prices could mean “seven lost years” in the fight against worldwide poverty, World Bank President Robert B. Zoellick said.
“While many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day,” Zoellick said at a press briefing on the eve of the IMF-World Bank Spring Meetings.
To meet this crisis, Zoellick is calling for a “New Deal on Global Food Policy.”
For the “immediate crisis,” he urged governments to fill the US$500 million food gap identified by the UN’s World Food Program.
Under the New Deal, the World Bank will nearly double agricultural lending to Sub-Saharan Africa over the next year to US$800 million to substantially increase crop productivity. In addition, the International Finance Corporation – the World Bank Group’s arm for private sector development – will boost its agribusiness investments.
Zoellick is also proposing that sovereign wealth funds around the world allocate US$30 billion –one percent of their US$3 trillion assets – to investments for African “growth, development, and opportunity.” At his press briefing Thursday, Zoellick said rising food prices are also contributing to malnutrition, one of the “forgotten” Millennium Development Goals.
“This is not just about meals foregone today or about increasing social unrest. This is about lost learning potential for children and adults in the future, stunted intellectual and physical growth. Even more, we estimate that the effect of this food crisis on poverty reduction worldwide is in the order of seven lost years. So we need to address this not just as an immediate emergency but also in the medium term for development.
“Meetings such as this are usually about talk. Words can focus attention. They can build momentum. But we can't be satisfied with studies and paper and talk. This is about recognizing a growing emergency, acting, and seizing opportunity, too. The world can do this. We can do this. We can have a New Deal on Global Food Policy.”
Zoellick said the poor spend as much as 75 percent of their income on food. “In just two months, rice prices have skyrocketed to near historical levels, rising by around 75 percent globally,” he said. The price of wheat has risen 120 percent over the past year, he added. Over the past three years, food prices overall have risen 83 percent, the World Bank estimates.