G-8 warns of 'major incidents' if food price hikes not fixed

Ministers pledge to double aid for Africa by 2010
Anthony Rowley, Business Times 7 Apr 08;

SURGING food prices could provoke 'major incidents' in the developing world unless the problem is tackled quickly and effectively, French minister Alain Joyandet warned yesterday at the end of the G-8 development ministers meeting in Tokyo. Japanese Foreign Minister Masahiko Komura, who chaired the meeting, was also among those to flag alarm over the impact of food prices on development.

Food prices and their impact on poverty reduction loomed large at the meeting, which was occupied with problems of declining foreign aid from traditional donors and attempts to get new donors such as China to play a bigger role. Host country Japan has seen its position as a supplier of official development assistance drop to No 5 among major donors in recent years but Mr Komura vowed to 'halt and then reverse' the decline.

Rapid escalation in the price of rice and other foodstuffs is casting doubts on the ability of the international aid community to meet one of the Millennium Development Goals set by the United Nations - to halve the proportion of people living in poverty by the year 2015.

Inadequate food production to meet demand as China, India and other emerging nations become major consumers is among factors driving up prices and threatening scarcities.

The short-term solution will require 'humanitarian assistance' to offset shortages of food staples, which have caused India, Indonesia, Egypt and others to ban rice exports and caused many governments to slash import restrictions on increasingly scarce foodstuffs, US director of foreign assistance Henrietta Holsman Fore said at the meeting. But the impact on development would require longer-term solutions, she added.

Food production must be put on an accelerated development track if the problems of supply and prices that are now emerging are to be dealt with, German Minister for Economic Cooperation and Development Heidemarie Wieczorek Zeul said. One essential element is to complete the WTO's Doha Round of trade liberalisation measures so that global agricultural markets can function more efficiently to overcome supply bottlenecks, she added.

Declining foreign aid was another source of concern for development ministers from the US, Japan, Canada, Britain, France, Germany, Italy and Russia. According to the development assistance committee of the OECD, official development assistance or ODA declined by over 8 per cent last year compared with 2006, 'only slightly above US$100 billion', the ministers noted. They pledged to at least fulfil an earlier commitment to 'double aid for Africa by 2010'.

The ministers held 'outreach sessions' during the two-day meeting with aid officials from Brazil, China, India, Indonesia, Malaysia, Mexico, South Korea and South Africa, as well as those from the Asean Secretariat, the EU Commission, OECD and others.

They declined to say what commitments 'new donors' had made to increasing the supply of aid but Mr Komura noted that countries that are moving from recipient to donor status should at least 'be aware of' problems that poor countries face.

Japan is host to this year's G-7 summit meeting to be held in Hokkaido in July but its authority in pushing for aid increases has been undermined by its slide from being the world's leading ODA donor for a while in the 1990s to No 5 now.

Japan is pushing hard to get increased aid flows to Africa, however, and Tokyo will host a fourth international conference on African development later this year.

Japan is also trying to carve out a position in another development area addressed by the G-8 ministers, that of climate change. Tokyo is cooperating with Indonesia in Asia and Gabon in Africa to provide finance and technology relevant to dealing with problems of climate change, Mr Komura noted.

Japan intends to provide similar aid and 'wisdom' to other developing nations, he added.