Soaring food prices set back Asia drive on poverty: ADB president

from the AFP via Google

MANILA (AFP) — Soaring food prices has pushed back Asia's fight against poverty and some countries may eventually need foreign aid to feed their hungry millions, the Asian Development Bank president said Friday.

Haruhiko Kuroda singled out Bangladesh as potentially requiring outside assistance, saying the Manila-based ADB was ready to provide budgetary support to it and other low-income Asian countries that might be required to spend more to help out their poorest citizens.

Kuroda said inflation was the most immediate threat to developing Asia's economic growth and said some economies would do well to allow their currencies to appreciate to put a lid on prices that have impacted heavily on the more than 600 million Asians who still lived on a dollar a day or less.

Vietnam, Cambodia, and the former Soviet republics in central Asia now have double-digit inflation.

"All of them are relatively small countries and that means controlling inflation is very difficult," he told a news conference here.

"Governments are well advised to refrain from using trade measures or price control measures to address this food price inflation issue," he added.

"The best way is to provide targetted income support for the needy poor, particularly in South Asia and in some parts of Southeast Asia," where he said the poorest of the poor spent more than half their income to buy food.

Kuroda said some countries in the region suffered from large fiscal deficits "and may need some help from ADB."

He said the Philippines-based lender was ready to provide loans as budgetary support to provide "targetted assistance to the poor".

While no member country has sought ADB aid, Kuroda said many Asian countries can be considered as "moderate losers" as food import prices rise, and that countries such Bangladesh "may" eventually seek budgetary support.

"The current food price inflation has already affected the pace of poverty reduction in some countries," Kuroda said.

"Poverty reduction has been very rapid in many Asian economies but the current high food price inflation has really affected poor people in the region particularly in low income countries like Bangladesh."