Washington: India on Sunday warned that high food and oil prices in several countries will escalate into a global contagion and sought international consensus to tackle the issue.
Need for urgency: Union finance minister P. Chidambaram.
“Unless we act fast for a global consensus on the price spiral, the social unrest induced by food prices in several countries will conflagrate into a global contagion leaving no country developed or otherwise unscathed,” finance minister P. Chidambaram told the development committee of the World Bank and the International Monetary Fund.
“The global community must collectively deliberate on immediate steps to reverse the unconscionable increases in the price of food which threatens to negate the benefits to the poor nations from aid, trade and debt relief,” the minister told the 77th meeting of the committee.
Describing the rise in global oil prices as unjustified, Chidambaram urged the oil producing countries to rethink their pricing policy. “The prices of crude oil that have shot up to the region of $110 (Rs4,389; a barrel) do not reflect either the cost of producing the oil or the risks inherent in the market and in fact, not even the inter-play of demand and supply. These runaway prices require producer nations to seriously contemplate the management of production and pricing policy,” he said.
The minister also asked developed countries to cut off subsidies on food crops for bio-fuel production. “In a world where there is hunger and poverty, there is no policy justification for diverting food crops towards bio-fuels. Converting food into fuel is neither good policy for the poor nor for the environment,” he said.