Rising food prices pose challenge: Al-Jasser.

Summary: RIYADH: Saudi Arabian Monetary Agency (SAMA) Gov. Muhammad Al-Jasser said on Monday that inflation and food stability are the two major challenges that the world is currently facing.

By MD RASOOLDEEN | ARAB NEWS

The governor made these remarks while opening a panel discussion on global risks at the 5th Global Competitiveness Forum that is currently being held at the Four Seasons Hotel in Riyadh.

"As countries' populations grow, food production and stability become increasingly important to avoid inflation through rising food costs and a reduction in purchasing power," Al-Jasser said, adding that India and China form a third of the world's population.

He recalled that the price of onions in India has quadrupled during recent weeks and stressed that food security promotes political stability. "Efforts to improve food efficiency, especially in distribution, can yield immediate results. For example, in India one third of perishable goods expire before reaching market. Creating innovative supply solutions to overcome this challenge is one way to improve food security," he said.

He noted that the world needs to heed lessons learned from the crisis or the lessons will be learned in vain. There needs to be global rebalancing, and the US needs to promote saving while China needs to promote consumption. A multi-pronged currency in the world is an important backbone for this solution.

Al-Jasser pointed out that the Kingdom successfully overcame the recent financial crisis due to prudent economic planning although it was conservative by nature. "When we implemented them (the economic measures), we did not escape criticism, but now we are getting commendations from both the local and the international community for our success in emerging from the crisis," he said.

Explaining the reasons for the success from the financial crisis, the governor said that the Kingdom fully understood the economic slowdown and managed the financial sector well.

"There were two attributes to our approach toward the problem -- managerial prudence and regulatory and supervisory prudence. The two cannot substitute each other but they are complementary to each other C* We stuck to the basics," said Al-Jasser. "Recovery from the world financial crisis is promising and optimistic, and it can be fragile, sluggish and uneven," he added.

Besides Al-Jasser, the other members of the panel included Tony Blair, former prime minister of the UK; Jean Chretien, former prime minister of Canada; Caroline Daniels, chairman and CEO of Aircraft Technical Publishers; Carlos Moreira, founder and chairman of WISeKey; and James Turley, chairman and CEO of Ernst & Young.

Blair said the single biggest challenge for everyone today is the pace of change. "Because of advances in technology and communication, messages are transmitted quickly across the world -- with big consequences -- and everyone has to adapt and adjust in order to advance," he said.

"It is critical that we manage these changes in a spirit of cooperation, not competition C* the world faces four distinct challenges in the coming years. There are challenges that we are capable of meeting, in fact meeting some of them is an exciting opportunity, but we cannot shy away," he added.

Dwelling on the need to address the challenge of collaboration, the former prime minister said that while in recovery there is a tendency to do things independently and create solutions centered on solving only one's own challenges. However, he added, it is imperative that the world continues to come together and collaborate through organizations like the G20.

"In the next few years, Europe needs to confront its fiscal challenges with diligence and prudence," he said.

Regarding the challenge of security, he said there is an urgent need to continue to promote peace among different cultures, especially in the region where a peace agreement is critical.

On the importance of avoiding crises like what we have just faced, Caroline Daniels said, "We need to reinforce a sense of trust and safety within the world through mutual cooperation."

Carlos Moreira said the Internet is a 20-year-old infrastructure that was not designed to carry the load, security issues or usage of the system today. "In the coming years it is imperative that we promote a new system that provides security for users around the world."

James Turley concluded saying there is a need to "empower entrepreneurs as they are the backbone of growth, ideas, and recovery. There are many challenges that they face and both the government and private sector can take action to improve the situation."

Copyright: Arab News 2011 All rights reserved.

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