IMF,
World Bank
Push for Solutions;
Turmoil in
By BOB DAVIS
and DOUGLAS BELKIN
April 14, 2008;
Wall Street Journal
Confirmation, confirmation, upon
confirmation!
Surging commodity prices have pushed up global food prices
83% in the past three years, according to the World Bank -- putting
huge stress on some of the world's poorest nations. Even as the ministers met,
Rioting in response to soaring food prices recently has
broken out in
Many policy makers at the weekend meetings of the International
Monetary Fund and World Bank agreed that the problem is severe. Among other
targets, they singled out
"When millions of people are going hungry, it's a crime
against humanity that food should be diverted to biofuels,"
said
James Connaughton, chairman of the
White House's council on environmental quality, said biofuels
are only one contributor to rising food prices. Rising prices for energy and
electricity also contribute, as does strong demand for food from big developing
countries like
But beyond taking shots at the
But the weekend's meeting produced few concrete results. Mr. Zoellick recently urged rich nations to contribute another
$500 million to the United Nation's World Food Program, but he said that the
U.N. has received commitments for only about half the money.
Integrated Response
Meanwhile, the IMF's board of governors -- basically, the world's finance ministers, who run both the IMF and World Bank -- urged the IMF to work with the World Bank for "an integrated response through policy advice and financial support."
On Sunday, the committee that oversees the World Bank noted that
"large groups of poor people are severely affected by high food and energy
prices across the developing world." The committee echoed the IMF
committee's call for "timely policy and financial support to vulnerable
countries" and urged rich countries to be more generous in "immediate
support for countries most affected by the high food prices."
The World Bank plans to nearly double its agricultural lending
to
Anyway
what we see here is that all this talk has nothing to do with now and the
harvests that will be brought in this fall, the plans of mice and men are all
centered about the harvest for 2009 if and only if the nations in the EU and
the US will cut out their farm subsidies and make all of their fallow fields productive
to drive back down prices. But these
agreements are never as productive as these bureaucrats paint their rosy pictures,
prices will remain high for at least the next three years.
Again
we remind our hearers, even in western nations the food prices and fuel prices
will swamp all those who are living close to, or near their budget limits with
credit cards. New car loans and home mortgages. This is the time now to pay
things off, and not the time to take on large new debts. Before the housing bubble burst the Lord had
us advise believers to sell their big homes and move
into smaller more budgeteous homes. The word of the
Lord regarding this has not changed despite the housing bubble bursting. Smaller homes can be had for less now, but the
disposal of larger homes depending on the local markets has become more
difficult. But if one prays and trusts the Lord, God will help you to divest of
your financial burdens. It is a good thing to so trust the Lord, but it is far
better to pray and trust the Lord for all your needs even your daily bread.
I
right these things and speak these things as one whom the Lord has miraculously
provided all our needs for the last 3.5 years of my illness where I have been
unable to work. And yet I lifted not my
voice to you, but to the Lord in secret, and thus has He rewarded me and my
household openly. Rest assured no matter what your state, He can do the same
for you.
Last week, British Prime Minister Gordon Brown urged the G7
nations -- the
The situation in
Wave of Protectionism
In the
Aggravating the problem, in some countries food inflation has
prompted a wave of protectionism. Countries usually impose trade barriers to
imports to protect local industries and try to boost exports. But food-trade
protectionism works the opposite way. Recently at least a dozen of 58 countries
surveyed by the World Bank have reduced tariffs to food imports and erected
barriers to exports in hopes of restraining food prices domestically and moving
toward "self-sufficiency."
The global effect of export barriers, however, is to drive food
prices even higher than they would be otherwise. Such policies "distort
global prices," said Mr. Simsek, the Turkish
finance minister, in an interview. Rather than erect barriers, he said,
Arvind Subramanian, a former senior
IMF researcher, said that when countries adopt restrictive trade policies regarding
food, "it becomes a bizarre kind of beggar-thy-neighbor. You're not trying
to sell more to the other guy; you're trying to keep more in your own
country."
With the international financial institutions working on a slow
track, countries have been cutting their own deals. Ukrainian President Viktor Yushchenko said on Tuesday that he had agreed to let
Meanwhile,
About 18 of the countries sampled by the World Bank also are
boosting consumer subsidies and instituting price controls. That prompted a
warning from U.S. Treasury Secretary Henry Paulson to "resist the
temptation of price controls and consumption subsidies that are generally not
effective and efficient methods of protecting vulnerable groups." He said,
"They tend to create fiscal burdens and economic distortions while often
providing aid to higher-income consumers or commercial interests other than the
intended beneficiaries."
Better-Targeted Subsidies
Instead, the World Bank's Mr. Zoellick
urged countries to look at better-targeted subsidies -- such as providing food
in exchange for work, or increasing school-lunch programs for poor families, so
that children can take food home to their families.
During informal conversations and interviews, ministers mainly
agreed that the
The White House's Mr. Connaughton said
the
The World Bank also has blamed the boom in biofuels
for the rise in global food prices. That has put Mr. Zoellick
in a ticklish position. Before taking his job at the World Bank, he was U.S.
Trade Representative, and defended
--John W. Miller in