Leaders from the International Monetary Fund and World Bank this weekend outlined a number of global economic risks, chief among them surging food prices, inflation, an uneven worldwide recovery and overheating in Asia.
While the global economy has shown signs of improvement, it remains in a "fairly fragile" state, said IMFC Chairman Tharman Shanmugaratnam at a press briefing on Saturday.
GLOBAL FOOD INFLATION
Food prices worldwide have surged 36 percent since a year ago and disproportionately hit developing countries. The rise in prices comes even as 44 million people around the world have been thrust into poverty since June last year.
"We are one shock away from full blown crisis," said World Bank Group President Robert Zoellick at a press briefing in Washington on Saturday.
The region's poor often spend half of their income on food. Having to use more of that income on feeding their families means fewer funds are available for families to save or invest.
"If the Food Price Index rises by just another 10 percent, we estimate that another 10 million people will fall into extreme poverty when people live on less than 1 dollar 25 cents per day," he said. "And a 30 percent increase would add 34 million people to the world's poor, who number 1.2 billion."
Zoellick said the G20 can play a leading role in helping to alleviate the problem, adding that the group of nations is working closely with the World Bank.
"Multilateralism must be focused on doing real things in the short term while building towards mid and longer term actions," he said.
France has made food a top priority for its presidency of the G20, he said, adding that the World Bank is working closely with the G20.
"I believe we can take a number of important steps that will help in two key areas: food price volatility and food security," he said.
The World Bank is also working on a new code of conduct for countries with regards to export bans, he said, adding that having better information on food stock quality and quantity would be beneficial.
The organization also supports the "pre-positioning of small, humanitarian food stocks, in places like the Horn of Africa, operated by the World Food Program," he said.
The World Bank aims to help countries better manage agricultural risks and with quick support for people most vulnerable to health risks due to food shortages by "effective, targeted nutrition safety nets, rather than through mistaken price controls or broad-based wage increases," he said.
The World Bank is also investing 7 billion U.S. dollars a year in improving agricultural production, from seeds to irrigation to storage, he said.
"I think these goals are achievable in the coming months," he said.