April 14, 2008 – The surge in food prices could push 100 million people into deeper poverty, World Bank President Robert B. Zoellick said at the International Monetary Fund-World Bank Spring Meetings in Washington.
“Based on a very rough analysis, we estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty,” Zoellick said. “This is not just a question of short-term needs, as important as those are; this is ensuring that future generations don’t pay a price too.”
Zoellick spoke Sunday at the concluding press conference of the World Bank Group-International Monetary Fund’s Spring Meetings in Washington, DC.
He reiterated his call for a “New Deal for Global Food Policy” to meet the food price crisis, which includes a call for US$500 million from donor governments to close an immediate gap identified by the UN’s World Food Program. To date, about half of the half-billion-dollar target has been met, Zoellick said.
As part of the New Deal, the World Bank is providing conditional cash transfers, food-for-work programs, and is assisting with new plantings, he said.
The Development Committee of the World Bank Group and the IMF endorsed the New Deal at its meeting earlier Sunday, as well as other, longer-term food initiatives by the World Bank Group.
In his opening statement, Zoellick outlined priority actions to help meet immediate needs of developing countries, while also paving the way toward an inclusive and sustainable development. He emphasized the “One Percent Solution,” under which sovereign wealth funds would channel one percent of their US$3 trillion in investment potential to Sub-Saharan countries, where hundreds of millions of poor people are feeling the brunt of the soaring rise in food and other commodity prices.
He also reinforced the importance of the EITI++ initiative, which was launched to help countries manage and transform their natural resource wealth into long-term economic growth.
IMF Managing Director Dominique Strauss-Kahn, who also spoke at the press conference, supported Zoellick’s proposals. He said all the IMF’s assistance to low-income countries on economic and financial development issues “could be destroyed very rapidly by the crisis coming through the increase in food prices.” Because of the surge in prices, many poor countries are likely to have a “huge deficit” in trade balances that would disrupt those countries’ economies.
On a related issue, Zoellick said the “Bali Breakfast” of finance ministers who came to the Spring Meetings focused on climate change strategies to meet adverse impacts of higher temperatures and more turbulent weather on agriculture. “If you’re in the developing world, it’s very frightening,” he said.