News, Articles & Reviews

Madrid (ANTARA News) - The Asian Development Bank on Saturday promised financial help for nations fighting the global food price crisis and attacked plans for a rice cartel.

Loans will help countries subsidise the price of food staples for the poor, ADB president Haruhiko Kuroda said on the first day of the banks four-day annual general meeting in Madrid.

"The amount depends on the requests from the affected countries," he was quoted by AFP as telling a news conference. "Possible total lending could be sizeable but not enormous."

The multinational lender will also provide two billion dollars (1.3 billion euros) in loans in 2008 and 2009 to finance agriculture infrastructure projects such as rural roads and irrigation systems to help boost farm output.

"Asia has a huge population with limited land for farming and a limited water supply so agriculture yields must be increased over time," Kuroda said.

Prices for the benchmark Thai variety of rice, a food stable across much of Asia, are at about 1,000 dollars a tonne, up threefold 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.

Global food prices have nearly doubled in three years, sparking riots last month in Egypt and Haiti, protests in other countries and restrictions on food exports in Brazil, Vietnam, India and Egypt.

Rising use of biofuels, trade restrictions, increased demand from Asia to serve changing diets, poor harvests and increasing transport costs have all been blamed for the price rise.

World Bank President Robert Zoellick has estimated that high food prices affect some two billion people across the world and threaten to push 100 million poor people further into poverty.

Source