Oil, food price spikes may worsen global poverty: IMF
A new IMF study, looking at the impact of soaring oil and food costs, said many countries will likely have to change their economic policies. Gainers & Losers
By Agencies |
WASHINGTON: Rocketing oil and food prices are being felt around the globe and the surging inflationary pressures could worsen poverty, the International Monetary Fund warned on Tuesday.
A new IMF study, looking at the impact of soaring oil and food costs, said many poor and developing countries will likely have to change their economic policies in response to soaring commodity prices.
"Some countries are at a tipping point," cautioned IMF managing director Dominique Strauss-Kahn.
"If food prices rise further and oil prices stay the same, some governments will no longer be able to feed their people and at the same time maintain stability in their economies," Strauss-Kahn said.
The IMF chief called for a "broad cooperative approach" to help tackle higher oil and food prices, and said the multilateral lender and guardian of global financial stability stood ready to assist countries in need.
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Strauss-Kahn said the international community would also have to play a role in helping to lessen the impact of commodity price shocks which have triggered protests in some countries.
European truckers have blockaded major roads to protest fuel prices in recent weeks and food riots have occurred in Cameroon, Bangladesh, and Somalia amongst other countries in recent months.
The IMF report, which echoes food price concerns already expressed by the United Nations, showed that poorer countries are having to pay out billions of dollars more for imported oil and foodstuffs.
Its findings were released as world oil prices continued to roil near record highs of over 142 dollars a barrel.
Higher energy and food costs are eating into cash-strapped countries budgets and could significantly dent their economic growth, Strauss-Kahn said.
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Poverty campaigners are concerned that rising commodity costs could roll back advances made through anti-poverty campaigns in recent years, particularly because poorer families tend to spend much more of their household income on food.
The IMF report found that poor households are most affected by food price inflation and "warned that the share of undernourished (people) in developing countries could rise rapidly above the current 40 percent of total population."
Energy and food values are still rising and the IMF said its research suggests "the problem is worsening."
The Washington-based fund said it is working closely with its member countries to help mitigate inflationary pressures taking into account countries specific needs.
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The report said that global food markets "need to be kept open" and that "restrictive policies," such as export taxes and bans, should be removed.
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