ASIA-PACIFIC REGION FACES ‘TRIPLE THREAT’ TO ECONOMIC DEVELOPMENT, WARNS UN REPORT

ASIA-PACIFIC REGION FACES 'TRIPLE THREAT' TO ECONOMIC DEVELOPMENT, WARNS UN REPORT
New York, Mar 26 2009 12:00PM

The triple threat of the global economic recession, volatile food and fuel prices, and bearing the brunt of the world's natural disasters has hit countries in the Asia-Pacific region particularly hard, a new United Nations report warned today.

With almost two-thirds of the world's poor and half of its natural disasters, the region is at the epicentre of these crises, according to the report by the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

The report, entitled "Addressing Triple Threats to Development," noted that record high oil prices in 2008 of $147 dollars a barrel, in combination with hording and price speculation drove the price of rice – the region's staple – up by 150 per cent, hitting the poor the hardest.

At the same time, another ESCAP report showed that almost a quarter of a million people died in 2008 as a result of natural disasters in the region, representing 97 per cent of fatalities worldwide.

"The converging triple threat highlights the need for a more comprehensive, inclusive approach to development," stressed ESCAP Executive Secretary Noeleen Heyzer.

"Not only is there an urgent requirement to resume economic growth, but we have to re-think where that growth takes place and whom it benefits," added Ms. Heyzer.

Prudent macroeconomic policies, implemented in reaction to the previous economic crisis which swept the region in 1997, bolstered the Asia-Pacific at the beginning of the current slump. However, that resilience started to erode, when in the fourth quarter of 2008, trade – the region's engine of growth – moved from double digit growth to double digit declines.

Among the reasons for this reversal in trade is that the region's economy is more integrated with the rest of the world than with itself.

Ms. Heyzer noted that "intra-regional trade among developing countries accounts for only 37 per cent of exports in our region, compared with NAFTA [North American Free Trade Agreement] at 51 per cent and the EU [European Union] at 68 per cent.

"By strengthening our domestic markets, the region can provide a buffer to global market fluctuations and move from being crisis resilient to crisis resistant. A key component in this will be how governments use fiscal policy as a tool of development."

The Survey calls for more intra-regional trade and investment by accelerating the implementation of regional economic cooperation agreements, as well as improved basic social protection. Currently only an estimated 30 per cent of the elderly receive pensions and 20 per cent of the population have access to health-care assistance.
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FOOD PRICE FLUCTUATION DRIVEN BY FINANCIAL SPECULATION – UN REPORT

FOOD PRICE FLUCTUATION DRIVEN BY FINANCIAL SPECULATION – UN REPORT
New York, Mar 19 2009 5:00PM

Both the surging food prices from 2007 to 2008 and their subsequent drop in some areas are a result of large-scale speculation by financial investors, according to a new report by the United Nations trade body, which called for greater regulation to protect millions of poor people worldwide.

Increased transparency is needed in futures markets for vital commodities such as food, said the report by the UN Conference on Trade and Development (UNCTAD), which also stressed the importance of regulators having greater power to step in when speculation in futures drives up the price of food.

There have been speculative bubbles for certain commodities on some occasions, the publication, entitled "The Global Economic Crisis: Systemic Failures and Multilateral Remedies," found.

It also said that speculation in housing, currencies and commodities led to a disconnect from the 'real' economy because appropriate prices could not be determined.

By the time these bubbles had burst, the current global economic crisis was inevitable, UNCTAD said.

The "herd" behaviour behind this kind of speculation went unregulated, the report stated, appealing for reforms of the international financial and monetary systems to allow for government intervention and international oversight.

It pegged greed as the reason for the severity of the current crisis, and said there should have been regulations and practical policies in place to anticipate short-sightedness.

Also to blame for the financial turmoil is the de-regulation, both within and between countries, the new publication said.

The "markets know best" approach failed to consider the possibility that markets can, in fact, fail, according to the report, which pointed out that existing economic risk indicators show low risk at the peak of the credit cycle, when risk levels are high.
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NEW UN ONLINE TOOL SHOWS FOOD PRICES IN POOR COUNTRIES HAVE YET TO FALL

NEW UN ONLINE TOOL SHOWS FOOD PRICES IN POOR COUNTRIES HAVE YET TO FALL
New York, Mar 19 2009 9:00AM

A new online database of staple food prices on national markets in 55 developing countries from Afghanistan to Zimbabwe shows that local prices have not fallen the way they have at the global level, the United Nations Food and Agriculture Organization (FAO) said today.

The "National Basic Food Prices Data and Analysis Tool," developed by FAO as part of its response to high food prices, shows the prices of different food commodities in local currencies or dollars and local measurements as well as standard weights.

The interactive tool allows for price comparisons between domestic and international markets, between different markets in the same country, as well as between countries.

"While food prices have fallen internationally, as indicated by the FAO food price index, this tool shows that in developing countries they have not fallen so fast, or at all," said Liliana Balbi, a senior economist with FAO's Global Information and Early Warning System.

"The easy-to-use database will be an invaluable source of information for policy and decision-makers in agricultural production and trade, development and also humanitarian work."

FAO noted that a rise in food prices hits the poor the hardest given that the share of food in their total expenditures is much higher than that of wealthier populations. While food represents about 10-20 per cent of consumer spending in industrialised nations, it can be as much as 60-80 per cent in developing countries.

Depending on available funds, FAO plans to add new countries and series to the database, which has benefited from a financial contribution from Spain under the FAO Initiative on Soaring Food Prices.

According to the agency, 963 million people or around 15 per cent of the world's population are currently suffering from hunger and malnutrition.
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FOOD CRISIS NOT YET OVER, WARNS TOP UN RIGHTS OFFICIAL

FOOD CRISIS NOT YET OVER, WARNS TOP UN RIGHTS OFFICIAL
New York, Mar 9 2009 5:00PM

Despite falling food prices worldwide, the global food crisis has not ended, the top United Nations human rights official cautioned today, emphasizing the need to view the issue through the very basic right to adequate food.

High Commissioner for Human Rights Navi Pillay told the Geneva-based Human Rights Council that it must target its work towards helping the most marginalized segments of society.

Last year, the number of the world's hungry surged from 854 million to 967 million due to the steep climb in prices of staple foods. In spite of dropping prices, they remain higher than they were in 2002, leaving the poor still unable to purchase food, she noted.

Further, lower food costs are actually discouraging agricultural investment, Ms. Pillay said, impeding efforts to step up food production, especially the capacity of small-hold farmers to sustain their livelihoods.

The Commissioner told the 47-member Council that steps to alleviate hunger and promote the right to food have yet to be translated into concrete action to help those most impacted by the crisis.

She voiced particular concern for the situation of the rural and urban poor, landless or small-scale farmers and households headed by women.

Ms. Pillay maintained that any successful strategy to defeat hunger should involve stronger institutions with better accountability, sustainable investments in agricultural production and research, and targeted support to small-scale farmers and the poor.

Last week, Secretary-General Ban Ki-moon underscored the need to scale up efforts to combat hunger and realize the right to food, given that the number of hungry people around the world is surging amid the current global financial crisis and the effects of climate change.

"Food is not just a commodity, and agriculture is not just a business. Both are central to survival. Realizing every person's right to food is a moral and humanitarian imperative," Mr. Ban told students of the UN International School at a conference on the global food crisis.
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