World Bank backs 'New Deal' for poor, hungry

13/04/2008 20h28

Robert Zoellick
©AFP/File - Saul Loeb

WASHINGTON (AFP) - The World Bank on Sunday launched a "New Deal" to fight hunger and poverty and urged governments to take action against a food crisis that has sparked deadly unrest in developing countries.

A doubling of food prices over the past three years could push 100 million people in poorer developing countries further into poverty and governments must step in to tackle the issue, World Bank president Robert Zoellick said.

"Based on a 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 at the end of the World Bank spring meeting here.

"This is not just a question about short-term needs, as important as those are. This is about ensuring that future generations don't pay a price too."

Calling on governments to begin tackling the issue, Zoellick said: "We have to put our money where our mouth is now so that we can put food into hungry mouths. It's as stark as that."

On the eve of the meetings, Zoellick had said the crisis could mean "seven lost years" in the fight against worldwide poverty.

Bangladeshi demonstrators shout slogans over high food prices and low wages
©AFP/File

The food crisis attracted increasing attention at this weekend's spring meetings here of the 185-nation World Bank and its twin institution, the International Monetary Fund, sparking loud warnings of dire consequences.

"Food prices, if they go on like they are doing today ... the consequences will be terrible," IMF managing director Dominque Strauss-Kahn said Saturday.

"As we know, learning from the past, those kind of questions sometimes end in war," Strauss-Kahn warned.

At a news conference Sunday, Strauss-Kahn reiterated that warning, stressing that this was a "huge problem" which put at risk years of development gains.

Rice, wheat, corn, cooking oil, milk and other foodstuff prices have all risen sharply in recent months, sparking violent protests in many countries, including Egypt, Cameroon, Ivory Coast, Mauritania, Ethiopia, Madagascar, the Philippines and Indonesia.

A World Bank report last week said global wheat prices jumped 181 percent over the 36 months to February, with overall food prices up 83 percent.

Zoellick's statement began with a reference to climate change, stressing the need to make talks inclusive if developing countries were going to be fully involved and treated fairly.

"The drive to address climate change won't work if it's seen as a rich man's club. It is very important to have developed and developing country ministers at the table so that the developing country voices can be heard," he said.

Zoellick said the bank's steering committee had endorsed his proposed "New Deal" for global food policy, similar in scope to a 1930s program under US president Franklin D. Roosevelt that tackled the problems of the Great Depression.

He said almost half the the minimum 500 million dollars immediately sought by the World Food Program to address the food crisis had been pledged.

Among the New Deal measures is encouragement of sovereign wealth fund investment in Africa to soften the impact of a slowing world economy on the most vulnerable countries.

The World Bank plans to nearly double its lending for agriculture in Africa, to 800 million dollars.

Skyrocketing prices of rice, wheat, corn, cooking oil, milk and other foodstuffs come against a backdrop of a spreading global financial crisis, a US economy teetering on recession and currency market imbalances.