OPINION> Commentary
Real tasks on hand
(China Daily)
Updated: 2008-07-08 07:28

The perfect storm of food, fuel and financial crises in the first half year does not eclipse the significance for leaders attending the ongoing summit of Group of Eight industrialized nations to address big long-term questions like climate change. After all, far-sightedness is always crucial to the progress of the world.

While paying needed attention to key issues about the future of the world, however, leaders should also quickly get their thoughts straight on imminent challenges so global efforts can be made to tackle them.

As the subprime crisis brought the US economy to the verge of recession early this year, rocketing oil and food prices have hit hard a large number of countries, particularly the developing ones. In stark contrast to the negative effects these crises have exerted, there is a noticeable lack of consensus over the causes behind them and thus of concerted responses to put them in check.

On the soaring oil price, countries disagree with each other over whether the reluctance of oil producers to raise output, strong demand led by emerging economies or speculation in commodities is to blame.

And even after rising food prices have pushed 100 million people worldwide below the poverty line and sparked riots in different continents, the developed and developing countries are still divided on the main reasons for the food crisis.

We cannot afford to wait and see these problems sort themselves out since the strain they are putting on the world economy looks increasingly menacing.

The G8 summit provides a good opportunity for decision-makers from both developed and developing countries to reach a clear understanding on common concerns and coordinate their efforts to address them.

A confidential World Bank report recently obtained by the Guardian may have shed some urgently needed light on the main cause of the food crisis.

Based on the most detailed analysis of the food crisis so far, the report concluded that biofuels have forced global food prices up by 75 percent, emphatically contradicting the US government's claims that plant-derived fuels contribute less than 3 percent to food-price rises.

Some developed countries had once linked higher food prices to higher demand from India and China, but the World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."

With such clarification about the root cause of the steep hike in food prices at present, it is no longer business as usual for plant-derived biofuel programs aimed to reduce some countries' emissions of greenhouse gases and their dependence on imported oil.

(China Daily 07/08/2008 page8)