Inflation crisis could spark political unrest: M'sia

Inflation crisis could spark political unrest: M'sia

Jul 08, 2008
AFP

KUALA LUMPUR - SOARING prices of food and fuel could spark widespread political unrest, Malaysia's Prime Minister Abdullah Ahmad Badawi said on Tuesday at a summit of developing nations.

Datuk Seri Abdullah said the inflation crisis had erupted as a global recession looms, spelling trouble for the D8 group meeting here - Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.

And he called on member nations to boost food production in a bid to avert conflict.

'The price of oil has skyrocketed to levels never anticipated ... the price of food has increased beyond the normal abilities to pay by the poor, which form the majority of the world's people,' he said in an opening speech.

'Our people in the D8 group of countries will be among those feeling the greatest pains arising out of the current international economic downturn,' Mr Abdullah said.

'There is also the danger of the food crisis creating political unrest in many societies.' Iranian President Mahmoud Ahmedinijad, Indonesian President Susilo Bambang Yudhoyono and Pakistani Prime Minister Yousuf Raza Gilani are attending Tuesday's gathering. The other members are represented by ministers.

Mr Abdullah, who is the new chairman for the D8, singled out the food shortages which have caused commodity prices to spike as the most urgent challenge facing its members.

'It is estimated that global food prices have risen by more than 75 per cent since 2000,' he said.

He urged the D8 nations to modernise their agriculture sectors, in an effort to avert conflict by reversing the drop in food production caused by climate change and natural disasters.

He also urged major oil producers to adopt Saudi Arabia's move to increase oil production, to try to moderate the inexorable rise of the cost of crude which has roughly doubled over the past year.

However, he cautioned leaders against converting agricultural land to the production of biofuels, saying it will worsen the global food shortage and drive up prices.

'We must not allow the zeal for energy security to come into direct conflict with the basic need for food production,' he said.

Mr Abdullah also recommended the group take 'bold measures' to ensure their economic growth remains on track to combat the 'looming recession in the global economy.'

Malaysia last month slashed its fuel subsidies, sending pump prices up 41 per cent in a decision that has sparked public anger and reinforced calls for Mr Abdullah to step down.

Spiking oil and food prices are being increasingly felt around the globe and surging commodity prices could worsen poverty in many poor countries, the International Monetary Fund warned last week.

It said said many poor and developing countries would likely have to change their economic policies in response to soaring commodity prices. -- AFP