Food crisis may lead to wars, riots: experts

Published Apr 14, 2008 12:00am

WASHINGTON, April 13: The world is moving towards a food crisis that may lead to wars and riots, warn financial experts meeting at the World Bank headquarters in Washington.

“People are dying because of their reaction to the situation,” said Jacques Diouf, director-general of the United Nations’ Food and Agriculture Organisation.

The UN agency also warned that this food crisis was not going to end quickly. The World Bank agreed and predicted that prices would remain above 2004 levels through to 2015.

World Bank President Robert Zoellick noted that people living in the developed world struggled with the high cost of fuel to run their cars, while poor people in developing nations struggled to feed themselves.

“In many developing countries, the poor spend up to 75 per cent of their income on food. When prices of basic foods rise, it hits hard,” he said.

The price of wheat had risen 120 per cent over the past year, Mr Zoellick added. Over the past three years, food prices overall have risen 83 per cent, the World Bank estimates.

The crisis of surging food prices could mean “seven lost years” in the fight against worldwide poverty, he said.

IMF managing director Dominique Strauss-Kahn also issued a dire warning about the food crisis and its economic and political impact.

“Food prices, if they go on like they are doing today ... the consequences will be terrible,” he said, adding that if they continued, “hundreds of thousands of people will be starving”.

“As we know, learning from the past, those kind of questions sometimes end in war,” he said.

Leading financial experts from around the world warned that food riots and shortages were breaking out in many regions as food shortages threatened millions of people, sparking protests around the globe.

They pointed out that so far there had been deadly riots in a number of countries.

Last week one person was killed in two days of rioting in Egypt, while violence wracked Haiti, where demonstrations over rising food prices led to looting and clashes with police.

In Haiti, the poorest country in the Western hemisphere, the prime minister was ousted on Saturday night after more than a week of violent protests over rocketing food and fuel prices.

The mounting food crisis has moved to the top of the agenda of this weekend’s spring meetings in Washington of the 185-nation World Bank and its twin institution, the International Monetary Fund.

To meet this crisis, Mr Zoellick called for a “new deal on global Food policy.”

For the “immediate crisis,” he urged governments to fill the $500 million food gap identified by the UN’s World Food Programme.

Under the new deal, the World Bank will nearly double agricultural lending to Sub-Saharan Africa over the next year to $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.

Mr Zoellick also proposed that sovereign wealth funds around the world allocate $30 billion –one per cent of their $3 trillion assets – to investments for African “growth, development, and opportunity”.

He noted that 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.

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