G-20 meet begins amid concern of rising global food prices

Paris, Feb 18: The two-day meeting of the G-20 Finance Ministers began here amid concerns of global food prices rising to dangerous levels. The urgency to formulate a coordinate strategy to deal with the global economic problems.

Among others, the meeting is being attended by Indian Finance Minister Pranab Mukherjee, besides representatives of important countries including US, Japan, Germany and China who collectively account for 85 per cent of the global output and two-third of the world population.

Ahead of the G-20 meeting, the first under the presidency of France, the World Bank has warned that food prices worldwide are rising to "dangerous levels" and have pushed 44 million people in developing countries into poverty since June last year.

The food price index has climbed 15 per cent between Oct 2010 and Jan 2011, the World Bank said, adding that global wheat prices have doubled during the same period.

Finance Ministers, according to officials, are expected to make an assessment of possible macroeconomic consequences of inflation on growth and discuss policy options to improve the functioning of global commodities market.

The Ministers, they added, would also endeavour to find collective solutions to reduce excessive price volatility, particularly of agriculture and energy goods, which undermines growth and threatens food security.

Besides rising food prices, the meeting will also deliberate on steps to moderate volatility in energy prices, check tax evasion, disruptive capital flows and reform the International Monetary System (IMS) and work out indicative guidelines for quantifying global imbalances.

It has also been decided to hold a meeting of the G-20 Agriculture Ministers in June to work out solutions for strengthening food security and enhancing agricultural supplies.

Among other things, the fragile economic recovery and uneven growth will figure prominently during the deliberations.

According to the International Monetary Fund's (IMF) latest assessment, the increase in global output is likely to moderate to 4.4 per cent in 2011 from 5 per cent a year ago.

Similarly, the GDP growth rate in Euro area will decelerate to 1.5 per cent from 1.8 per cent in 2010.

The G-20, a grouping of the developed and developing nations, besides India, comprises Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Korea, Turkey, the United States and European Union.

France will host 6th G-20 summit at Cannes on November 3-4, 2011 before passing on the baton to Mexico.

PTI