Monday, April 14, 2008

Food Riots Unlikely To Happen In Philippines?

Over the weekend the more I thought about the food riots the more wrong this seemed. Here are some stories of potential food riots in the Phillipines.

Food Riots Unlikely To Happen In Philippines: In the Phillipines there are official reassurances that food riots will not happen there. The IMF Managing Director Dominique Strauss-Kahn told reporters at the IMF’s semi-annual meetings in Washington. “Hundreds of thousands of people will be starving, leading to a disruption of the economic environment” if food inflation keeps accelerating at its current rate.

The problem described in this article is purely the cost for food, especially rice and wheat. The Phillipines government apparently has enough reserves, both cash and stored grain, to avert a crisis.

Transcript of a Press Briefing by Tomasso Padoa-Schioppa, Italian Finance Minister and Chairman of the International Monetary and Financial Committee, and Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, with John Lipsky, First Deputy Managing Director, and Masood Ahmed, Director, External Relations:

...MR. STRAUSS-KAHN:...If food prices go on as they are today, then the consequences on the population in a large set of countries, including Africa, but not only Africa, will be terrible. Hundreds of thousands of people will be starving. Children will suffer from malnutrition, with consequences all of their lives.

Moreover, the consequences will be such that disruptions may occur in the economic environment, trade balances, current account, so that at the end of the day most of governments, having done well during the last five or ten years, will see what they have done totally destroyed and their legitimacy facing the population destroyed, also.

So, it is not only a humanitarian question. It is not only an economic question. It is also a democratic question. As we know, learning from the past, those kind of questions sometimes end into war. So, if we want to avoid that the huge rise in commodity prices, and especially in food prices, has these terrible consequences, then we need to take this problem into account much more than has been done until now. So, financial turmoil, on the one hand, slowdown in the economies, no decoupling from the emerging countries, global problems, that is one of the problems we have to face. Increase in price commodities, especially in food prices, that is the second problem we have to face. To do that, the reform of the Fund is certainly necessary, but we now need to devote a hundred percent of our time to these questions.

What I saw this morning is that the spirit of multilateralism is obviously alive and kicking, and that was probably the best news of the morning. Now, I think Tommaso and myself are prepared to answer all the questions you want....

Philippines Seeks Asian Summit on Food Crisis, Trade (Update4) :

The Philippines, the world's largest rice importer, is urging China, Japan and other Asian nations to attend an emergency meeting on the region's food crisis ... Grain prices including rice, the staple food for half the world, have surged this year on concern there's a shortage in the international market, prompting some growers to impose export curbs. The higher prices are stoking unrest and fanning inflation,... China, Egypt, Vietnam and India, representing more than a third of global rice exports, have curbed sales this year, and Indonesia says it may do the same. ... Rice futures have almost doubled in the past year as the Philippines tried to secure shipments. ... Soaring food prices, together with the seizure in credit markets, topped the agenda at this weekend's meeting of the International Monetary Fund and World Bank.

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