25 January 2011
Major Economies to Focus on Food Prices, Currency Stability
Washington — The major industrial and emerging-market nations are expected to focus on world food prices and currency stability during two summits in 2011, finance leaders said at preliminary meetings being held in Paris January 24–26.
Financial leaders are concerned that unstable food and commodity prices, coupled with international currency imbalances, could cause widespread hunger in poorer nations and stall economic growth globally as nations struggle to emerge from one of the deepest recessions since the 1930s.
“The global economy is now well on the road to recovery, but many difficult issues remain to be addressed to ensure strong, sustained and balanced global growth,” U.S. Assistant Treasury Secretary Charles Collyns said in remarks before the German Marshall Fund of the United States on January 20.
“This will not be easy, because there are considerable differences across countries’ economic conditions and prospects — in contrast to the situation three years ago when we all faced the perils of the crisis together,” Collyns added.
President Obama and French President Nicolas Sarkozy met January 10 at the White House to coordinate work in preparing for the Group of Eight (G8) and Group of 20 (G20) summits being held in France this year. Sarkozy is hosting the summits and serves as chairman, with responsibility for setting the agenda, which is expected to consider a broad range of economic and global security concerns.
“Too many people are still out of work. Too many businesses are still having problems getting financing,” Obama said at a meeting of the two leaders in the Oval Office. “There’s still too many imbalances in the world economy that are inhibiting the prospects of growth.”
Leaders of the G8 major industrialized nations — Britain, Canada, France, Germany, Italy, Japan, Russia and the United States — will meet May 26–27 in Deauville. The G20 nations will meet November 3–4.
Members of the G20, which formed in 1999 in the aftermath of the 1997 Asian financial crisis, include the European Union and 19 of the world’s largest national economies: Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey and the United States. G20 countries represent about 90 percent of the gross domestic product globally and nearly 80 percent of world trade, and they have two-thirds of the world’s population.
“We discussed how we can coordinate our agendas to make sure that we are as productive as possible in delivering the kinds of reforms and follow-through that will result in prosperity for peoples around the globe,” Obama said. Financial reform and regulatory coordination are among the significant issues being discussed.
“Although we are in the process of healing and recovery from the disastrous recession that we went through, we’re not yet where we want to be,” Obama said.
Sarkozy said France and the United States will work closely together.
“With Barack Obama, we are determined to propose new ideas to get things moving, both within the framework of the G8 and G20,” Sarkozy said. That includes developing common positions on currency imbalances and commodity prices, which can add stress to fragile national economies, he said.
Among the concerns the leading economies face are rising food prices, which can trip a fragile economy into a downward spiral, push up inflation in developed nations and add stress to developing countries.
Meeting in Berlin January 22, agriculture ministers from 48 nations called on the G20 “to fight the abuse and manipulation of [food] prices” in world commodity markets, according to a joint statement from the ministers.
The United Nations recently reported that world food prices reached a record in December based on higher prices for sugar, grain and oilseeds, which are among staple commodities in many nations. The U.N. Food and Agriculture Organization said January 3 that an index of 55 food commodities gained for the sixth straight month, up 25 percent from December 2009 and topping the record set in June 2008.
Rising food prices have already caused instability in a number of nations, spurring food riots, and a few nations have resorted to export limits in an attempt to keep food prices from rising further.
Sarkozy told reporters January 24 in Paris that “If we don’t do anything [about rising food prices], we run the risk of food riots in the poorest countries and a very unfavorable effect on global economic growth.”
Angel Gurria, secretary-general of the Organisation for Economic Co-operation and Development (OECD), told reporters January 25 in London that surging food and commodity prices continue to threaten economic growth. He welcomed the G20’s efforts to include commodity market regulation in the upcoming summit.
(This is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://www.america.gov)
