IMF, World Bank must support poor countries facing food price volatility, Euro crisis

The World Bank and IMF must step up their support for developing countries who are struggling with spiking food prices along with the fallout from Europe’s fiscal crisis, international agency Oxfam said ahead of the annual meeting of the institutions in Tokyo this week.

World food prices are now close to their 2008-2009 peak and the economic downturn in Europe and the US is hurting poor country revenues. Worse still, food price rises threaten to fuel an upturn in land grabbing in developing countries as competition for natural resources intensifies. Oxfam has called on the World Bank to temporarily freeze its agricultural investments in land while it reviews its policies to prevent land-grabs and sets higher investment standards.

Oxfam spokesperson Elizabeth Stuart said: “As food prices rise, investors are buying up huge tracts of land: in the last 10 years, land in developing countries six times the size of Japan has been sold. Too often, these deals are land grabs where poor people are evicted without consultation or compensation.”

“The World Bank must help protect poor people’s livelihoods and food sources. As an investor and an adviser to developing countries, it can help prevent poor people being kicked off their land without consultation or compensation.”

World Bank president Jim Yong Kim has said the Tokyo meetings will highlight rising food prices, the impact of climate change on farmers around the globe, and the Eurozone debt crisis.

Stuart said: “These are the right issues to target. Volatile food costs, failing aid and reduced capital flows are hitting poor countries hard.”

At the same time, a Eurozone breakup could cost the world’s poorest countries $30 billion in lost trade and foreign investment, Oxfam has calculated, pulling them into a spiral of falling export earnings, damaging their economies and putting pressure on already limited resources for social services. The IMF has warned that low income countries have run down their fiscal buffers.

Stuart said: “The IMF must work with developing country governments to ensure they have the policy space to increase health and education spending which is essential for social stability, tackling income inequality and for growth.”

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