Asean leaders alarmed over rising oil, food prices

JAKARTA – Southeast Asian leaders expressed concern yesterday over the steady rise in oil and food prices brought about by the political unrest in the Middle East and agreed to take collective measures to address the problem.

The leaders voiced their concern during the 18th Association of Southeast Asian Nations (ASEAN) Leaders’ Summit here.

Energy Secretary Jose Rene Almendras and Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang said in a press briefing here that the leaders acknowledged the “negative impact” of the problem on ASEAN’s efforts to sustain development and eradicate poverty.

President Aquino arrived here Friday night for the summit and related meetings with Brunei Darussalam Sultan Hassanal Bolkiah, Cambodian Prime Minister Hun Sen, Lao Prime Minister Thongsing Thammavong, Malaysian Prime Minister Dato Sri Mohd Najib bin Tun Abdul Razak, Myanmar President Thein Sein, Singapore Senior Minister S. Jayakumar representing Singaporean Prime Minister Lee Hsien Loong, Thai Prime Minister Abhisit Vejjajiva, and Vietnamese Prime Minister Nguyen Tan Dung.

Singapore’s Lee arrived yesterday.

Almendras said the leaders agreed to give specific instructions to concerned officials to address the matter. He said the leaders tackled the issue during the first plenary session.

Almendras said that as part of the initial agreement, oil-producing Southeast Asian countries have committed to supply or share their oil resources with non-oil producing countries “obviously at commercial rates.”

“But at the very least there is a commitment that rather than sell to anyone else they will prioritize selling to ASEAN countries,” he said.

Indonesia, meanwhile, warned that rising food and energy prices could drive more people into poverty and urged coordinated action to fight inflation.

“We must give serious attention and take concrete measures to address the soaring prices of food and world energy, which in turn will negatively affect the prosperity of our people,” Indonesian President Susilo Bambang Yudhoyono 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,” he said.

Yudyohono said the “competition for energy, for food, and for clean water will become part of the global competition” as the world population would hit the nine billion mark by 2045.

“Food security will be a great challenge for ASEAN. For that reason, we will need clear and evident cooperation amongst ASEAN, with a special emphasis on programs securing food supply for the people,” Yudyohono said.

“Just as important in overcoming food security is the need to ensure energy security. The challenge we face is producing an innovative solution. Sources of new and renewable energy is greatly needed, to increase the available supply of energy sources, reducing energy consumption that negatively impacts the environment,” he said.

“More specifically, we must attend to the formulation of a food reserves system in ASEAN and also one that assist farmers in escaping poverty,” Yudyohono said.

“ASEAN needs to strengthen cooperation on renewable energy sources and alternative energy, including hydro-power and geo-thermal. One way to achieve that is the development of research centers and renewable energy in our region,” Yudyohono said.

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 a nuclear crisis.

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 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 ASEAN’s 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 negatively impact growth.

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 1997.