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UPDATE 2-INTERVIEW-World Bnk head welcomes G8 food security plan

Published 07/07/2009, 06:06 PM
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(Recasts first paragraph, adds details throughout)

By Lesley Wroughton

WASHINGTON, July 7 (Reuters) - World Bank President Robert Zoellick welcomed a G8 plan to invest billions to boost food security on Tuesday, and said the focus should be on immediate needs of reducing hunger as well as raising world agricultural production.

"The idea of boosting food security for all of the developing world, especially Africa, is a very good one," Zoellick said in an interview ahead of a summit of leaders from the Group of Eight industrialized nations and four major developing powers in Italy starting on Wednesday.

Speaking by telephone from Geneva, Zoellick said a proposed agricultural investment fund, possibly managed by the World Bank, will be discussed and refined at the G8, but a decision may have to wait until the Group of 20 meeting in September.

He said the World Bank had discussed the fund with the United States, Canada, Italy and Japan.

"I think the parties are still going to discuss them and refine them. It may very well be something that also becomes a key deliverable for the G20 meeting in Pittsburgh," he said.

Leaders from the Group of 20 developed and developing countries are scheduled to meet in Pittsburgh, Pennsylvania, on Sept. 24-25. The G8 comprises the United States, Canada, France, Germany, Italy, Japan, Britain and Russia. China, Brazil, India and South Africa are also participating in this week's summit.

Drafts of the G8 pact have said leaders will agree to mobilize billions of dollars for agricultural investment over three years, with the United States ready to give $3 billion to $4 billion over a multi-year period.

The United States, the world's largest food aid donor, wants other partners to match that commitment to reach $15 billion.

Zoellick noted that a report by the International Food Policy Research Institute last year estimated total global annual agricultural investment requirements amounted to $14.3 billion for all developing countries.

The rise in world food prices last year to record levels highlighted the chronic underinvestment in agriculture in developing countries, where three-quarters of the poor live in rural areas.

While there is enough food produced in the world to end hunger, more than 1 billion people go hungry because they cannot afford to buy food or otherwise cannot access supplies.

The G8 plan calls for more investment in boosting output in regions like Africa where access to food is a concern.

FOLLOW-THROUGH ON AID PROMISES

Zoellick said it was premature to assume that a recovery from the global recession was under way in all countries and therefore he will urge leaders to follow through on earlier pledges of aid for developing countries.

"While some are feeling their way to the exits, millions are still being consumed by the fire," Zoellick said, saying there were signs that financial markets have stabilized and the downturn was moderating in some countries.

At a 2005 summit, the G8 promised to double aid to Africa by 2010 but members collectively fallen behind on their pledges as budgets have been squeezed by the global financial crisis.

Zoellick said he would urge the G8 to consider giving more resources to the World Bank and regional development banks, which are facing increased demand for financial aid.

Donors have doubled resources for the International Monetary Fund by $500 billion, but record lending by the World Bank and other development banks could compel them to also seek additional funding to cover their commitments.

Zoellick has suggested an early round of donations for the World Bank's fund that provides low-cost loans and grants to 78 of the world's poorest countries.

In the interview, Zoellick warned of rising trade protectionism around the globe and he called on the leaders participating in this week's talks to commit to concluding the Doha global trade talks by 2010.

"What would be helpful coming out of all these meetings, not just the G8, is for leaders to really try to commit to a close in 2010," Zoellick said.

"The elements are there and with the sounds coming out of the new Indian government that is a positive sign," he added.

India's new trade minister, Anand Sharma, has said his country is determined to reach a deal in the long-running Doha round and that patient negotiation could narrow differences.

Zoellick said World Bank monitoring had found an increase in trade restrictions and subsidies, and he noted unfair trade and anti-dumping cases at the World Trade Organization have been rising.

The G8 will urge members to keep their markets open and to reject protectionism, according to a draft communique obtained by Reuters. (Editing by Leslie Adler)

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