Economic Issues Join Warming on G8's Agenda

ReutersPresident Dmitry Medvedev arriving on Sunday at the New Chitose International Airport, near Sapporo, Japan.
RUSUTSU, Japan -- The world's top industrialized nations face pressing financial and environmental troubles at their annual summit Monday, confronted with demands they reinvigorate the stumbling world economy, push ahead languishing climate change talks, and make good on pledges to battle poverty and hunger.

Leaders from the Group of Eight -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- began gathering in the northern Japanese resort village of Toyako on Sunday for three days of meetings among themselves and with heads of African nations and rapidly developing countries such as China.

President Dmitry Medvedev arrived for the summit Sunday and was greeted at the airport by local regional officials and Russia's Ambassador to Japan, Mikhail Bely, Interfax reported.

The G8 summit -- Medvedev's first -- comes at the end of a seven-day foreign trip for the president that has already included stops in Azerbaijan, Turkmenistan and Kazakhstan.

Issei kato / Reuters
Police blocking protesters Saturday.

The summit also coincides with demanding foreign policy issues, such as the effort to strip North Korea of its nuclear weapons, mounting international pressure on Iran to stop its uranium enrichment program, and the threat of UN Security Council sanctions on Zimbabwe over its recent one-sided presidential election runoff.

Facts About Food Prices
G8 leaders meet in Japan on Monday amid concerns about soaring food costs around the globe. Here are some key facts about the issue:

Why are food prices rising?
Factors behind the surge in prices include high energy and fertilizer prices, a declining U.S. dollar, drought in big producing countries including Australia, rising demand from fast-growing economies such as China and India, high oil prices that have pushed up production costs, and dwindling stocks.

Rising investment inflows in food commodity futures markets and hedge fund activity have hiked prices further.

Experts have also blamed a big push in biofuels programs that have diverted land and crops from food production.

Export restrictions imposed by countries including India and China on rice, and by Argentina, Kazakhstan and Russia on wheat, have cut international supplies.

Actions by large rice importers, such as the Philippines, in floating large tenders to obtain needed rice imports, have boosted prices.

Production is increasing but so is demand. The UN's Food and Agriculture Organization has forecast that total grain stocks will sink to a 25-year low by the end of this year.

Forecasts by the U.S. Department of Agriculture and OECD-FAO say prices will remain high in 2008. The Agricultural Outlook 2008-2017 by the OECD-FAO shows this upward trend:

--Up 20 percent for beef and pork.

--Up 30 percent for sugar.

--Up 30 percent for rice.

--Up 40-60 percent for wheat, maize and skimmed milk powder.

--Up 60 percent for butter and oilseeds.

--Up 80 percent or more for vegetable oils.

Who is affected by rising food prices?
A recent World Bank study in eight countries estimated that from 2005 to 2007, poverty increased by an average of 3 percent and suggested that up to 105 million people could become poor due to rising food prices, close to 30 million of them in Africa alone.

According to UNICEF, 1.5 to 1.8 million more children in India are currently at risk of malnourishment, as households cut back on meals or switch to less nutritious foods.

In Bangladesh, 65 percent of a household's money goes on food, in Haiti and Kenya 50 percent, Senegal 40, Liberia 25 and China 27.

Among rich countries, household spending on food is much lower. For Japan it is 19 percent, Spain 22, France 16, Germany and the United States 10 percent, and in Britain 12 percent.

In recent months there have been food riots in several developing countries, including some African nations, Haiti and Bangladesh.
What can be done?
The World Bank has called for a doubling of agricultural aid and more aid money, with fewer ties, for the UN's World Food Program, extra social support for poor people such as feeding people at school and work. It wants seed and fertilizer provided to the most affected countries for the upcoming planting season, a rethink of biofuel policies in rich countries, an increase in Japanese rice donations and exports, and swift progress to complete the Doha trade round.

The Asian Development Bank has suggested measures such as targeted food subsidies and an emergency food security reserves system, policy advice on export restrictions, price controls and subsidies, and help to ensure farmers have easy, reliable and affordable access to seed, fertilizers, pesticides and credit.

A moratorium on global grain and oilseed-based biofuels would help ease wheat and corn prices by up to 20 percent in the next few years, the International Food Policy Research Institute says.

The FAO and OECD, in a report, said more genetically modified crops might be needed to increase food production.
Source: Reuters

The meeting's Japanese hosts poured security agents and riot police -- about 20,000 of them -- into the isolated venue and surrounding towns, sealing access to the summit hotel and cloistering the 5,000 journalists covering it at Rusutsu, a resort 30 kilometers away. Protesters were limited to rural villages or the distant city of Sapporo.

Despite the demanding agenda, concerns were high that the political uncertainties in some member countries -- particularly the United States, where President George W. Bush is 200 days away from the end of his term -- could prevent decisive action. The leaders of France, Japan and Britain also face domestic problems.

Bush on Sunday urged his fellow leaders to push forward stalled talks on world trade in the so-called Doha Round and to pour more aid into Africa, after a bilateral meeting with Japanese Prime Minister Yasuo Fukuda.

"It's an opportunity for us, Mr. Prime Minister, to promote free and fair trade, and it's going to be an essential part of the development agenda," Bush said. "The truth of the matter is we can give grants, but the best way to help the impoverished around the world is through trade, it's a proven fact."

Climate change was a top agenda item for the summit. UN-led talks aimed at forging a new global warming accord by the end of 2009 have stalled because of deep disagreements over what targets to set for greenhouse gas reductions and how much developing countries such as China and India should be required to participate.

As of Sunday, it was still unclear whether nations would be able to agree to a goal of cutting their emissions by 50 percent by 2050. A more ambitious goal of setting nearer-term targets for 2020 was considered well beyond reach.

"I don't think they're going to do much. They're going to kick the can down the road," said Alden Meyer, a climate change expert with the Union of Concerned Scientists, suggesting real progress would have to wait for a new U.S. president in January.

With global oil prices surging, the G8 leaders are expected to urge major oil producers to increase supplies, while also calling for steps to improve energy efficiency and develop alternative sources of energy within their own economies. Oil spiked to a record $145.85 a barrel last Thursday.

It was unclear how effective a call by the G8 to boost oil production would be when the group does not include Saudi Arabia, the world's largest exporter of crude, or any OPEC members.

The summit also is to extend the G8's emphasis on Africa. Eight African leaders headed to Japan, and the summit faced rising expectations that it would address key problems, such as food supplies, infectious diseases and economic development.

In a measure of expectations on the group, Pope Benedict XVI on Sunday urged the G8 to help the world's poor.

"Many voices have been raised asking [G8 leaders] to realize the commitments made at previous G8 appointments and to courageously adopt all necessary measures to conquer the plagues of extreme poverty, hunger, disease, illiteracy," Benedict said while addressing pilgrims at the papal summer residence in the hill town of Castel Gandolfo, near Rome.

Politics were also getting attention.

German Chancellor Angela Merkel, scheduled to arrive in Japan on Monday, said the G8 leaders would discuss how they could toughen sanctions on Zimbabwe after President Robert Mugabe's widely denounced presidential election victory.

"I hope that we will also get support from our African colleagues here," Merkel said in her weekly video message.

The European Union already has travel bans and an asset freeze in place on Mugabe and other senior Zimbabwean officials. The United States is also seeking international sanctions against Mugabe and his top aides.