High world prices to breed more poor: ADB
09 MAY 2008
An additional 5 per cent of low-income earners could slip into poverty this year due to recent increases in world prices, according to a new Asian Development Bank (ADB) study, “Living with High Prices”.
It says that high oil prices are already a concern in the Pacific region, but the recent surge in world food prices has yet to be fully felt in the Pacific.
“The effects of high prices on Timor-Leste and the Fiji Islands are of particular cause for concern,” it said.
The study says that regional governments could take advantage of the lag in developments between mainland Asia and retail outlets in the Pacific.
“It provides a small window of opportunity to prepare for high food prices, and manage the adjustment to high prices.”
Director General of ADB’s Pacific Department, Philip Erquiaga said “good government policy can maximize wins from high export prices and minimize the losses from higher prices of oil, rice and wheat”.
“Poor policy will see opportunities missed and add to the problems facing the Pacific region,” he said.
Fiji’s interim Government this week reacted to the rising world prices by raising the income tax threshold from $9000 to $15000, effectively exempting a total of 34, 000 workers from paying income tax.
Duty has also been taken away from certain basic food items like rice, tinned fish and eggs.
The Government is also looking at ways to boost local food production.
Meanwhile, the ADB study says the surge in food prices highlights the importance of ending the neglect of the rural economy.
“Rural infrastructure and services need to be rebuilt if the region is to strengthen its resilience to high world food prices,” it said.
“Living with High Prices” also looks at what regional governments and development partners can do to lessen the problems created by high world crude oil prices.
The study concludes that high crude oil prices pose a bigger long-term challenge to the region than high food prices.
The ADB study says actions needed to build resilience to high crude oil prices include encouraging market liberalization in transport, particularly in areas supporting tourism; increasing competitive pressures in fuel importing; and making more use of alternative energy sources and energy efficient practices.
The ADB study also says that in the Pacific, fuel taxes are a tax on remoteness, and removing excessive fuel taxes is part of the solution.
“ADB is committed to helping the Pacific face the challenges caused by high prices, in close coordination with our development partners, in line with our comparative advantages and resource availability,” said Erquiaga.
Fijilive
Reader Comments
Posted Comments
Posted
By: and Posted On:May 09 2008 23:38:42
Comment:
The is enough greed of the rich in the world. The oil producing countries and the royals there are a greedy bunch. They have billions invested while the ordinary in their countries remain ordinary. The USA destroyed Iraq a major oil producer and now the locals there are destroying what's left.
