Indonesia turns Asean focus to food, energy security

JAKARTA (AFP) - Indonesia on Saturday warned fellow Southeast Asian states that rising food and energy prices could drive more people into poverty and urged coordinated action to fight inflation. Indonesian President Susilo Bambang Yudhoyono said at the start of the annual Association of Southeast Asian Nations (ASEAN) summit that the regional bloc must take steps to ease the surge in consumer prices. We must give serious attention and take concrete measures to address the soaring of food prices and world energy, which in turn will negatively affect the prosperity of our people, he said in his opening speech. History shows that the rise of food and energy prices... has always caused the increase in the number of people living in poverty, yet we know very well that decreasing the poverty level is not an easy task. Philippine Energy Secretary Jose Rene Almendras said every leader who spoke at the plenary session mentioned high energy and food prices as among the most critical issues faced by the region. It is common to all countries in Asia, in ASEAN countries particularly, he said, adding that ministers like himself were under instruction by their leaders to work on mitigating the impact. He said the Philippines was inviting oil companies to invest in storage infrastructure and retail distribution networks in the country in a bid to enhance competition that will hopefully lead to cheaper fuel. Oil prices soared to their highest peaks in more than two years last month, driven largely by political turmoil in the crude-producing Middle East and North Africa region. The increase has sparked fears that inflation could slow down the recovery from the global recession in 2008/2009. ASEAN groups 10 disparate nations from oil-rich Brunei and high-tech Singapore to impoverished Cambodia, Laos and Myanmar, as well as major rice producers Thailand and Vietnam and rice-importers like the Philippines. Indonesia and Malaysia round up ASEANs 10 members. Commodities prices including oil and gold took a hammering on US markets Thursday due to a higher US dollar and the reweighing of risk by institutional investors, but analysts expect the upward price trend to resume. On the same day, the United Nations said high food and oil prices could keep an additional 42 million people in poverty in the Asia-Pacific region and threaten economic growth. The International Monetary Fund warned in a report last month that rising food and energy prices could start an inflationary spiral. The impact would be especially bad in the developing world where households spend larger shares of their incomes on food and energy compared to those in advanced economies. Several ASEAN members have already raised interest rates as part of efforts to fight inflation, at the risk of slowing down economic growth in a region that led the world out of the global financial crisis. In his speech, Yudhoyono called for the establishment of an integrated food security framework in ASEAN. More specifically, we must attend to the formulation of a food reserves system in ASEAN and also one that assists farmers to escape poverty, he said. To enhance energy security, members must work towards developing renewable sources that are abundant in ASEAN such as hydro-power and geothermal, he said. One way to achieve that is the development of research centres and renewable energy in our region, he added. The Indonesian leader also called for further cooperation in disaster management, citing the giant earthquake and tsunami that struck Japan in March which also damaged a nuclear power plant and triggered an atomic crisis.

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