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G8 expresses concern over rising food, oil prices

SINGAPORE: The Group of Eight (G8) countries on Saturday expressed “strong concerns about the sharp rise in oil prices” and urged the International Monetary Fund (IMF) and the IEA to analyse the factors behind the present “surge.”

Finance Ministers, who met in Osaka to prepare for the prospective G8 Summit in Japan, said “geopolitical concerns and financial factors” would also account for the “elevated oil prices” now.

The statement issued at the end of the meeting did not spell out the “geopolitical concerns,” which could be seen as a diplomatic euphemism for the factors triggered by the continuing military presence of the U.S. in Iraq. However, the Ministers noted the current oil prices had “surpassed past peaks in both nominal and real terms” and linked the trend to the “fundamental constraints” on the demand and supply sides of the equation.

The phraseology reflected the farthest extent to which the G8 went in referring to the soaring energy demand from China and India, both of them being dialogue partners of this group.

On “the recent steep rise in food prices,” the Ministers said the causes were “multi-faceted” and noted that “the demand will likely stay high, as emerging economies and developing countries grow.” Urging a global response to the “underlying causes of food insecurity,” G8 saw the “imperative to remove supply-side constraints and export restrictions, [and] replace general food subsidies in developing countries with well-targeted help for the poorest.”

At the same time, referring to the “challenges and opportunities” over bio-fuels, a cause of concern to the developing bloc on the food security front, G8 stressed the need for a successful Doha Development Round in global trade talks.

On the overall global economic trends in the context of climate change awareness, G8 highlighted the importance of the Doha Round and also affirmed commitment to “fighting money laundering and terrorist financing.”

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