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India blames WB, IMF for food crisis

India blames the policies of World Bank and IMF and "excessive and unsustainable" demand in developed countries for the soaring food and fuel prices.
PTI | By HT Correspondent
UPDATED ON MAY 22, 2008 02:07 PM IST

Firmly rejecting the contention that rising consumption in developing nations was responsible for the soaring food and fuel prices, India has blamed the policies of World Bank and IMF and "excessive and unsustainable" demand in developed countries for the crisis.

"This consumption trend has existed for more than a decade," said Indian UN Ambassador Nirupam Sen, pointing out that over last two years, the demand for oil has gone up one per cent but prices in dollar terms have risen by 90 per cent.

Addressing a special meeting of the United Nations Economic and Social Council to consider the issue of rising food prices, he held financial crisis leading to weakening dollar and diversion of grains to production of bio-fuels among the major causes.

Sen also blamed the policies followed by the Bretton Woods Institutions (BWI) responsible and severely criticised their advice to countries to shift from food crops for domestic population to cash crops for exports.

The debate came in the backdrop of UN agencies warning that more than one billion could added to those already needing food assistance because of high prices.

Finger pointing over the issue was sparked off after the US and EU said the growth of India and China which has led to rise in consumption level has led to the shortage.

Rejecting the BWI's prescription of eliminating restriction on food exports in the interest of market purism, Sen told the delegates that this continues the tradition of these institutions' advice which is partly responsible for the crisis in the first place.

"They seem to feel that subsidies are good for the rich but bad for the poor," Sen said such policies had "predictable negative impact" on food production.

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