Asian Development Bank (ADB) President Haruhiko Kuroda called on Monday for an "immediate response" to soaring food prices which he said threatened a billion Asians with a risk of malnutrition. He also warned that the food problem could cut into decades of economic gains in the Asia-Pacific region.
"These are troubling times for the world economy. On the heels of turmoil in the financial markets and economic slowdown in the US and elsewhere, soaring food prices are hitting the poor very hard," he said in an inaugural speech to the ADB board of governors meeting in Madrid.
"This price surge has a stark human dimension and has greatly affected over a billion people in Asia and the Pacific alone. Their purchasing power has been eroded placing them at a greater risk of hunger and malnutrition."
He said the stocks of food grains were at the lowest levels for decades. Reduced supplies and increased demand along with the sharp depreciation of the US dollar and trade restrictions by some countries have combined to cause the price surge in recent months, the ADB president said. "The focus must now be on the soaring prices, and our immediate response," he said.
He called for "prudent macroeconomic management" along with targeted income support to protect food entitlements and livelihoods of the most vulnerable. "The absence of such measures could seriously undermine the global fight against poverty and erode the gains of the past decades," he said. "The ADB is prepared to respond with immediate financial assistance to relieve fiscal pressure on affected countries," said Kuroda.
Prices for the benchmark Thai variety of rice, a food staple across much of Asia, are at about 1,000 dollars a tonne, up three-fold from the last ADB annual meeting in Japan one year ago.
The jump in food prices is fuelling inflation globally, and the ADB predicted it would hit 5.1 percent across Asia this year, its highest level since the Asian financial crisis a decade ago and is raising concerns of popular unrest. Asian nations will see their fiscal deficits worsen because of the need to provide subsidies to offset rising food and energy costs for the poor, the ADB said in a report issued at the gathering.
The problem will be more severe in countries that already have a large deficit like Bangladesh, India, Pakistan, and Sri Lanka, it said. World Bank President Robert Zoellick has estimated that high food prices seriously affect about two billion peoples across the world and threaten to push 100 million poor people further into poverty.