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79 REGIONAL ECONOMIC OUTLOOK FOOD CRISIS IN SOUTHEAST ASIA: WHAT CAUSED? WHAT NEXT? By Aekapol Chongvilaivan All over the world, rapidly rising food prices have made basic food commodities — rice, maize, wheat, and soybean — unaffordable for the poor. According to the International Financial Statistics (IFS), the world food price index has increased 86 per cent since 2000 — 68.6 per cent for Malaysia ’s palm oil, 77.3 per cent for Thailand’s rice, and 50.9 per cent for the Philippines’ coconut oil. The United States Department of Agriculture estimated that “some 130 million additional people have joined the ranks of the hungry due to the global food crisis” (World Food Programme 2008) — 80 per cent of whom are the poorest, most vulnerable women and children. Food Price Inflation in Southeast Asian Countries Unavoidably, Southeast Asian countries have also been suffering from what the United Nations’ World Food Programme (WFP) coined a “silent tsunami” of a global food crisis that propelled millions of the poor into drastic starvation and malnutrition. This food price catastrophe has become a threat of food security in this region. SOURCE: International Financial Statistics (IFS), International Monetary Fund. 0.000 50.000 100.000 150.000 200.000 250.000 300.000 350.000 World Food Price World Energy Price Time Index (2000=100) M 7 1 9 9 3 M 2 1 9 9 4 M 9 1 9 9 4 M 4 1 9 9 5 M 1 1 1 9 9 5 M 6 1 9 9 6 M 1 1 9 9 7 M 8 1 9 9 7 M 3 1 9 9 8 M 1 0 1 9 9 8 M 5 1 9 9 9 M 1 2 1 9 9 9 M 7 2 0 0 0 M 2 2 0 0 1 M 9 2 0 0 1 M 4 2 0 0 2 M 1 1 2 0 0 2 M 6 2 0 0 3 M 1 2 0 0 4 M 8 2 0 0 4 M 3 2 0 0 5 M 1 0 2 0 0 5 M 5 2 0 0 6 M 1 2 2 0 0 6 M 7 2 0 0 7 Figure 1: The Monthly Trends of the World Food and Energy Prices 02a EcoOutlk.indd 79 12/10/08 11:55:20 AM 80 ECONOMIC OUTLOOK A Rice Crisis in the Philippines: The Philippines, the world’s largest rice importer, was severely affected by nearly tripled prices of rice — from US$400 a ton in January to more than US$1,000 in April 2008. The rice price turmoil spurred rice stampedes even if the government has painstakingly attempted to secure alternative rice sources to offset the effects of the rice export restrictions imposed by major rice-exporting countries, including India, Indonesia and Vietnam. Skyrocketing Food Price Inflation in Indonesia: The food crisis entailed nearly double-digit food price inflation in the mid of 2008. This had largely affected the livelihoods of farmers and consumers and had provoked protests in many parts of Indonesia. Rice Hoarding in Vietnam: Even though Vietnam is one of the world’s largest rice-exporting countries, doubled rice prices have caused economy-wide chaos — shoppers rushed to buy up and store rice. As a result, the government banned the aggressive speculation, hoarding and pre-emptive buying and imposed export restrictions to curb its domestic rice price inflation. Food Shortages in Burma: Burma has undergone a long-lasting economic slump since the nation-wide strife in September 2007. Millions of people live with daily income less than US$2 a day, of which 75 per cent goes toward daily nourishment, and hence are miserably affected by skyrocketing food prices. Malnourishment in Cambodia: The food crisis has drastically undermined food security in Cambodia. It has been reported that WFP inevitably ceased rice supplies for more than 400,000 students in March 2008 as the rice procurement failed due mainly to exponentially soaring rice prices and unprecedentedly serious rice shortages. Political Instability in Malaysia: The food price spikes are a political issue in Malaysia which deteriorated its political stability. Opposition parties doubted the ruling party’s performance of controlling domestic food prices and ensuring food security during the general election in March 2008. However, the worldwide surge in grain prices has provided rice farmers in rice-exporting countries economic opportunities. Rice farming in Thailand, for instance, has become highly lucrative as rice...

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