Global Economics

Soaring Food Prices Unleash Chaos


The World Bank calls for leaders to take action as violent protests against the high cost of grains and other foods are seen around the globe

The scenes in Haiti have been dramatic. Gunfire on the streets in the capital Port-au-Prince; thousands parading through the streets; and 9,000 United Nations peacekeepers powerless to stop the violence and the widespread looting. Five people have been killed in the violence since last Thursday, according to unofficial reports. Even an impassioned plea by the Caribbean country's President Rene Preval on Wednesday failed to restore order.

"The solution is not to go around destroying stores," he said. "I'm giving you orders to stop."

Haitians, though, are reacting to problems that cannot simply be wished away. Food prices across the globe have been skyrocketing in recent years. Rice prices in Asia have spiked as has the price of bread in Egypt, milk products in Europe and pasta in Italy. The result has been unrest in a number of countries and many more concerned that a mass protest is but a price hike away.

Now, World Bank President Robert Zoellick has called on world leaders to act to ease the global food crisis. Zoellick urged the United States, the European Union, Japan and other developed countries to help plug a $500 million (€319 million) shortfall in the United Nations' World Food Program. In a speech given in Washington, D.C. on Wednesday, Zoellick said the money was urgently needed to meet emergency demands and warned that if politicians did not act now, "many more people will suffer and starve."

Unrest triggered by the higher food and fuel prices has been gaining steam across the globe in recent weeks. During a two-day riot in Egypt earlier this week, one person was killed. Cameroon has also seen street violence. In the Philippines, President Gloria Macapagal Arroyo warned on Tuesday that rice shortages were exacerbating political and social tensions in the country.

Zoellick, who was speaking in the run-up to the World Bank's spring meeting this weekend, said world leaders needed to develop a new mechanism that focused not only on hunger, malnutrition and access to food and its supply, but also on the connections between energy, crop yields, climate change and other factors.

According to the World Bank president, as financial markets have tumbled, food prices have soared. The prices of some basic staples, such as rice and wheat, have shot up by as much as 80 percent in some places.

The UN estimates that global food prices have risen 65 percent since 2002, with grain rising 42 percent and dairy products 80 percent last year alone. Jacques Diouf, the director-general of the UN Food and Agriculture Organisation warned Wednesday that unrest linked to food and fuel prices, which has been seen in Burkina Faso, Cameroon, Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique and Senegal, could spread to even more countries.

Zoellick said the World Bank, whose main task is to fight poverty in developing countries, estimated "that 33 countries around the world face potential conflict and social unrest because of the acute hike in food and energy prices." In countries where food made up half to three-quarters of consumer spending, "there is no margin for survival," he said.

According to Zoellick, high and volatile food prices will continue for years, because of growing populations, changing diets, rising energy prices, the emergence of biofuels that force farmers to choose between lucrative fuel crops and foodstuffs, and climate change.

British Prime Minister Gordon Brown also urged world leaders to intervene to tackle rising food scarcity. In a letter released Thursday, he writes about the urgent need to address rising food prices and the impact of biofuel production on agriculture. "Rising food prices threaten to roll back progress we have made in recent years on development," Brown wrote. "For the first time in decades, the number of people facing hunger is growing."

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