In a letter last week to the G-8, World Bank President Robert B. Zoellick called on leaders to act immediately to deal with surging energy and food prices, which he said threatened to push more than 100 million people into extreme poverty and reverse gains made in previous years.
The world is "entering a danger zone," he said.
Japan has pledged $50 million in food aid over the next three months, on top of about $200 million it had committed earlier to help developing nations with rising prices for rice and other foods.
G-8 members, which also include Germany, France, Italy, Britain, Canada and Russia, are expected to set up a new system of "food reserves," much like strategic oil reserves.
But the World Bank estimates that short-term food needs exceed $10 billion.
The G-8 will probably have even less ability to bring about significant relief from global oil prices, which have doubled in the last year.
Part of the G-8's weakness is that the members are themselves struggling economically. The United States is showing little or no growth, joblessness is rising and stock markets are falling. Japan and most of the other G-8 members aren't faring much better.
The other factor: Nations such as Saudi Arabia, a key player in controlling crude supplies, and China, which is driving some of the increased demand for fuel, aren't part of the G-8 and won't be at the table, though Chinese officials will take part in some discussions as guests, including one-on-one sessions with Bush.
As host, Japan has made global warming a top priority, but it remains to be seen whether the gathering will be able to reach an accord on reduction of greenhouse gas emissions.
Japanese political advisors agree that nations such as China and India, where demand for resources is increasing, and big suppliers, such as Brazil, should be included in the debate.
In discussions of energy, the U.S. and others in the G-8 have tended to cite rising demand from fast-growing countries, particularly China, whereas the Chinese and some others have blamed the weak dollar and speculation for the price increases.
"Why can't the U.S. take responsibility to supervise those who are manipulating the global oil prices?" asked Yi Xianrong of the Research Center for International Finance at the Chinese Academy of Social Sciences.
"And second, what about the depreciating dollar and its impact to the international market? It is the dollar's depreciation that caused hot money fleeing . . . all over the world and led to a series of global economic problems."
--
don.lee@latimes.com
