High food price biggest challenge for developing countries

Xinhua, April 17, 2011

Spiking food price is the biggest challenge facing developing countries nowadays, World Bank Group President Robert Zoellick said Saturday.

The global economic growth is gaining momentum, but the high unemployment rate in advanced economies is still a big uncertainty for the global economic revival, Zoellick said at a press conference wrapping up the Spring Meetings of the World Bank and its sister agency the International Monetary Fund (IMF).

He contended that the global community should put food safety first, as food volatility hurt the poor and the vulnerable most.

Following the meeting of the Development Committee of the World Bank and IMF, the chief of the World Bank cited figures from its latest edition of Food Price Watch saying that an additional 10-percent increase in global prices could drive an additional 10 million people below the 1.25 U.S. dollars extreme poverty line.

"We welcome evidence of a strengthening global economy, led in large part by developing countries. However we are concerned that overheating in some sectors, especially food and energy, is resulting in price pressures and volatility, putting developing countries and especially their most vulnerable populations at risk," according to a communique of the committee.

The World Bank's food price index, which measures global prices, is now 36 percent above its level a year earlier and remains close to its 2008 peak.

The committee noted that it was concerned about high and volatile international food prices and their impact on vulnerable populations, as well as the longer term risks they pose to growth and poverty reduction.

In assessing progress toward the Millennium Development Goals, Zoellick held that not one conflict-affected country has been able to attain a single Millennium Development Goal. "We need to make progress in fragile states," he added.

"We remain committed to ensuring sustainable, balanced and inclusive growth and providing timely, effective support where needed," noted the communique.

Zoellick called for greater efforts to create opportunities for growth, promote global collective action and strengthen governance during the meeting of the committee.