World Bank/IMF

Starvation and turmoil predicted, as food prices soar

Article published on the 2008-04-13 Latest update 2008-04-15 14:54 TU

Dominique Strauss-Kahn
(Photo : AFP)

As the World Bank holds its spring meeting in Washington, International Monetary Fund managing director Dominique Strauss-Kahn has warned that soaring food prices could wipe out the development gains of the past ten years. Protests and riots over food inflation have alarmed political and economic leaders throughout the world.

As the IMF's spring meeting closed and the World Bank's started, Strauss-Kahn warned that hundreds of thousands of people will starve if food prices continue to rise. And he predicted economic and political disruption

A World Bank policy note last week revealed that wheat prices have risen 181 per cent over the 36 months to February, and that overall global food prices have gone up 83 per cent.

The World Bank was set to discuss a plan by its president Robert Zoellick. It proposes that countries provide at least 300-million euros to the World Food Programme to fight hunger. Among its other proposals are that wealthy countries' sovereign wealth funds invest in Africa and that the World Trade Organisation's trade liberalisation negotiations be concluded.

But Vandana Shiva, who runs the Research Foundation for Science, Technology and Natural Resource Policy in Delhi, told RFI that the two world finance institutions have helped create the problem.

"The first reason why this crisis has been triggered is by forcing countries to get linked to an international speculative commodity trading system through deregulation and trade liberalisation," she said.

She also blamed increasing bio-fuel production.

Bio-fuels have been suggested as a means of tackling climate change and the US has subsidised farmers to grow them to reduce its reliance on imported fuel.

But critics say that processing them creates more greenhouse gases than the emissions they replace and that rainforest and peatlands are being destroyed to grow the crops needed to make them.