(Xinhua)
Updated: 2008-04-04 16:43

DA NANG - East Asian economies are facing major economic challenges in the coming months as they deal simultaneously with higher prices and slower growth, said a press release by the World Bank (WB) here Friday.

Speaking on the sidelines of the 12th ASEAN (Association of Southeast Asian Nations) Finance Ministers' Meeting on Friday in Vietnam's central Da Nang city, WB Managing Director Juan Jose Daboub said high and rising food prices, especially rice prices, posed a special challenge, so governments needed to take short- term steps to protect the poor, but also ensure that long-term solutions were found to relieve shortages.

"In virtually every East Asian country, high food prices are raising headline inflation and contributing to a significant decline in the real incomes of the poor, most of who devote between one- to two-thirds of their income on food".

More and better irrigation, greater private participation in food procurement, increased investment in transparent and technical agricultural support services, and increased research and development are essential components of a long-term solution.

More secure land tenure and property rights for farmers will encourage more agricultural production, and give them better access to credit for machinery, seeds and fertilizers that can help to raise yields, he said, noting that a fairer and more open global trading system will, however, be critical to encourage increases in global food production in the longer-term.

Daboub said that the WB anticipated growth for the developing countries of East Asia would be cut one or two percentage points in 2008, reaching about 8.5 percent, and that East Asia's strong long run growth has not been driven by year-to-year fluctuations in world demand, but by improvements in productivity, innovation, quality control, education and skills.

"It is already becoming clear that East Asia, and especially China, is emerging as a growth pole in the world economy, providing a useful counterweight to the slowing industrial economies," he said.