Monday, June 16, 2008


PM warns of disaster if prices not tackled


Prime Minister Datuk Seri Abdullah Ahmad Badawi has warned that bold, immediate, remedial measures had to be taken to tackle the food and fuel crisis as well as a possible recession or the world could be looking at a disaster which could jeopardise the livelihood of millions of people. “About 100 million or more people have descended into poverty worldwide while low and middle-income groups everywhere are feeling the strain of increased food prices on their budget. “Mass protests over food have erupted in several countries and more instability awaits those societies which fail to alleviate their problems. “It seems that we have yet to awaken to the enormity of the problem and its potential for creating a real disaster,” he said in his speech at a welcoming reception for about 150 local and international delegates to the two-day World Economic Forum on East Asia beginning yesterday. Also present was his wife, Datin Seri Jeanne Abdullah. Abdullah, who is also Finance Minister, said that global recession was not a distinct possibility, more so with the fallout of the US sub—prime crisis. He lamented that while East Asian countries might have taken measures to resolve the economic problems, they have had only limited impact, as food prices remained high and fuel prices continued to soar. Abdullah also took to task Western Governments for allowing unscrupulous speculators and their hunt for quick profits to prevail without any regard for good financial governance. Chastising them for their double standards, he said: “if our own financial institutionswere involved, I have no doubt that we would have been subject to vociferous criticism.” The Prime Minister said the most urgent challenge facing East Asia and the world was food prices which have risen by 75 per cent since 2000. “Wheat costs three times more and the price of rice has increased by 50 percent just over the past year. The problem that confronts all of us now is largely the consequence of ill-conceived and harmful policies. “These include the widespread conversion of arable land to cater to the production of bio-fuels, the depreciation of the US dollar which has made products more expensive, restrictions on the export of rice and the payment of subsidies on farm products in rich countries. “Such subsidies have made investment in agriculture less rewarding for developing countries,” he said. Abdullah said skyrocketing oil prices, now hovering at US$135 (US$1=RM3.27) a barrel, and forecast to increase to as high as US$200, was another threat to the global economy. Abdullah also cited speculation as a major factor inflating the prices of essential commodities like oil, wheat and rice in addition to wars and the threat of war in West Asia. “Even aggressive rhetoric, like threatening talk of attacking Iran, spooks markets and sends the price of oil spiralling upwards,” he said. Abdullah called on East Asian countries to do their best to address the triple challenges of high food prices, spiralling fuel costs and the likely global recession. Since the problem went beyond East Asia, Abdullah called on leaders, global institutions and the international con to address the many problems besetting their economies. “We have faced serious challenges beforebut rarely in such a potent combination and which seriously threatens the world. “Dire situations do call for bold measures,” he said.-Bernama