TOYAKO, Hokkaido — The leaders of the Group of Eight nations addressed “strong concern” Tuesday about multiple transborder problems, including soaring energy and food prices, and urged the world’s major energy producing states to increase output and refining to tame further price hikes.
They also agreed that the long-term outlook for the global economy is positive.
“We express our strong concern about elevated commodity prices, especially oil and food, since they pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable, and increase global inflationary pressure,” the leaders said in their statement on economic issues.
“We are determined to continuously take appropriate actions, individually and collectively, to ensure stability and growth in our economies and globally,” they said.
The G8 summit, with central bankers and financial chiefs absent, is taking place against a backdrop of oil reaching a record high above $147 a barrel last week.
However, the leaders were divided over the factors pushing up fuel and food prices.
“Some pointed out that demand is exceeding supply, while some cited speculative investment,” a Japanese official said.
Soaring oil and food prices not only accelerate inflation but also batter global growth by hurting businesses and consumption, posing a serious threat to the poor. Policymakers face the dilemma of trying to steer economic policies amid slowing growth and inflation.
Asian Development Bank President Haruhiko Kuroda said in Tokyo last week that global inflation is severe in Asia, where 1 billion people have to spend at least 60 percent of their income on food.
On curbing the rise in oil prices, some leaders said the world needs to increase the use of nuclear power and develop renewable energy sources, according to the official.
The leaders of the United States, Japan, Germany, Russia, Italy, Canada, the U.K. and France proposed holding an energy forum involving oil producers and consumers in the future to focus on energy efficiency and new technologies, which they hope will promote dialogue between the two sides.
They also expressed concerns about the potential spread of protectionist trade policies.
On that note, the leaders said they would press for concluding the Doha Round of global trade liberalization talks, which has been unable to make significant headway for years.
“We reiterate our determination to work as a matter of urgency toward the conclusion of the negotiations,” the statement said.
The Japanese official said one leader told the others he supports a strong dollar, apparently referring to U.S. President George W. Bush. The U.S. has come under pressure from other countries to stabilize its currency as complaints mount that its weakness is exacerbating the rise in food and fuel prices.
The G8 countries also urged some nations — without specifying which — to raise the value of their currencies to help reduce the global financial imbalances.
“In some emerging economies with large and growing current account surpluses, it is crucial that their effective exchange rates move so that necessary adjustment will occur,” they said in the statement.
Food crisis addressed
The Group of Eight leaders made a fresh commitment Tuesday to addressed the soaring food prices that have pushed millions of people into poverty by increasing investment to increase agricultural production and develop so-called second-generation biofuels.
Prices for oil and food from rice to soybeans have been driven up by surging demand in emerging economies, by increased biofuel production, unfavorable weather and by massive inflows of speculative money from hedge funds and other powerful investors.
The situation has stirred riots in Asia, Africa and Europe and raised fears of malnutrition that could be caused by a global food shortage.
The G8 has promised $10 billion in food aid, nutritional support and measures to increase agricultural output in affected countries, according to a summit statement.
The G8 called on other donors to cooperate in providing more humanitarian assistance and access to seeds and fertilizer for the upcoming planting season.
“The negative impacts of this recent trend could push millions more back into poverty,” the statement said. “We are determined to take all possible measures in a coordinated manner.”
Specifically, the G8 nations expressed determination to work harder toward concluding the Doha Round of global trade liberalization talks.
“It is also imperative to remove export restrictions,” the joint statement said.
They said development of second-generation biofuels from nonfood plant materials and inedible biomass should be accelerated.