JEJU ISLAND, South Korea, June 16 (AFP): Surging prices for oil, food and other commodities threaten stable world economic growth, Asian and European finance ministers said today.
The ministers, in a statement after a two-day meeting, expressed concern at the increases which "pose a serious challenge to stable economic growth worldwide and have serious implications for the most vulnerable."
They agreed on the need for coordinated policy responses "to cushion the impact on the poorest, including enhanced investment in agricultural and energy sectors and maintenance of market openness."
The eighth Asia-Europe Meeting (ASEM) of finance ministers in the South Korean resort island of Jeju was dominated by concerns over price rises and the threat they pose to inflation.
"Ministers highlighted the need for further analysis on the real and financial factors behind the recent surge in commodity prices, their volatility and the effects on the global economy," the statement said.
Ministers remained positive about the long-term outlook for the global economy but said short-term prospects had weakened.
Downside risks included the US slowdown, tightened credit in world financial markets and "mounting inflationary pressures mainly driven by high energy and food prices."
The meeting was attended by finance ministers or their deputies from 27 EU countries and 16 Asian nations, plus officials from six international organisations.
The ministers stressed that both Asia and Europe are "significantly more resilient" to external shocks than a decade ago but cannot be fully immune to global economic risks.
They highlighted the "urgent" need for a successful end to the Doha round of global free trade negotiations, which would boost growth and ease poverty.
Ministers welcomed Asian efforts to expand the coverage of the Chiang Mai Initiative, which was set up after the 1997 financial crisis to manage regional short-term liquidity problems.
Asian financial integration "could bring more stability to the region and, in turn, would reduce uncertainty and foster economic growth in the region."
The meeting also recognised the need to improve financing of public works by attracting private-sector investment under public-private partnership deals.
They welcomed a "Jeju initiative" to enhance cooperation on such deals among ASEM members.
On climate change, the ministers agreed "to further explore the role of market-oriented responses to mitigating greenhouse gas emissions cost-effectively and with minimal impact to growth prospects."
The next meeting will be held in Spain in 2010.
Meanwhile, South Korean President Lee Myung-Bak called today for international cooperation to combat soaring oil and food prices that threaten economic growth worldwide.
"We need to strengthen international policy coordination and cooperation," Lee told ASEM ministers.
The world economy now faces challenges "after a decade of boom and prosperity," he said, adding that recent international financial turmoil also threatens global growth.
Rising prices of oil, food and raw materials have caused the biggest crisis since the oil shocks of the 1970s, said Lee. His government is grappling with a truckers' strike over high fuel prices, threatening the export-dependent economy.
"I expect this meeting to provide a forum for regional economic cooperation and facilitate economic policy coordination between Europe and Asia," the president said in a speech on the second and final day of the meeting here.
