Photo Courtesy of the World BankWorld Bank President Robert Zoellick and Center for Global Development President Nancy Birdsall discuss foreign aid challenges." class="caption" align="" height="167" width="250" style="border-style: initial; border-color: initial; border-top-width: 1px; border-right-width: 1px; border-bottom-width: 1px; border-left-width: 1px; border-top-style: solid; border-right-style: solid; border-bottom-style: solid; border-left-style: solid; border-top-color: black; border-right-color: black; border-bottom-color: black; border-left-color: black; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; ">
Photo Courtesy of the World Bank
World Bank President Robert Zoellick and Center for Global Development President Nancy Birdsall discuss foreign aid challenges.
President Robert Zoellick said he supports greater reliance on cash or vouchers instead of commodity aid as part of a "New Deal" for global food policy. He made the comments during a speech he delivered Wednesday at the Hilton hotel in Washington, D.C.
"The World Bank Group estimates that 33 countries around the world face potential social unrest because of the acute hike in food and energy prices," Zoellick said. "The realities of demography, changing diets, energy prices and biofuels, and climate changes suggest that high-and volatile-food prices will be with us for years to come."
Staple food costs have risen by as much as 80 percent since 2005. Rice last month hit a 19-year high, and the real price of wheat was at a 28-year high, Zoellick said. Riots are already breaking out in Egypt, Côte d'Ivoire, and elsewhere.
Many economists agree that one solution lies in granting poorer nations income support in the form of cash or vouchers to help purchase local commodities, rather than flooding developing world food markets with international food. In his speech, Zoellick noted that, "a shift from traditional food aid to a broader concept of food and nutrition assistance must be part of this New Deal." He advocated customizing financial support based on local needs, and perhaps supporting national feeding programs or public works development in exchange for food.
"I applaud hearing his ambitions. They are very respectable," said Nancy Birdsall, president of the Center for Global Development, which sponsored Zoellick's talk. "Linking the bank to hungry people, that's what the World Bank should be doing... But it all depends on whether it all adds up."
Nora Lustig, the Shapiro Visiting Professor of International Affairs at George Washington University, cautioned that local feeding programs in the developing world may not be able to handle Zoellick's expectations. "Can they be put in place quickly enough? In either case, do countries have the fiscal resources to fund these programs whose costs have risen as a result of higher food prices?" she said.
Zoellick also said that the World Bank would nearly double its agricultural lending to sub-Saharan Africa. And with the World Trade Organization's contentious Doha debates possibly nearing an agreement that could reduce agricultural tariffs and subsidies, Zoellick urged immediate action. "There is a good deal on the table," he said. "It's now or never."
The Doha Round's agricultural talks have been on hold since the United States and European Union pulled out over concerns that reducing existing trade barriers on agricultural commodities would hurt domestic producers. According to Lustig, the proposed trade agreement would likely help poorer nations that are net sellers of these goods, but damage poorer nations that are net purchasers.