G-8 Finance Chiefs Talk Global Warming, Oil Prices

By: Associated Press
By: Associated Press

OSAKA, Japan (AP) -- Helping developing nations fight global warming and sharing views on towering oil and food prices were among the topics on hand at a Group of Eight finance ministers' meeting opening Friday.

The two-day meeting also will address other global worries, including help for Africa and possibly worries about gyrating currency rates, according to Japanese Finance Minister Fukushiro Nukaga, the host of the meeting.

Nukaga was scheduled to meet U.S. Treasury Secretary Henry Paulson and International Monetary Fund Managing Director Dominique Strauss-Kahn on the sidelines of the G-8 meeting Friday.

Later in the day, he was expected to appear with a U.S. official to outline an initiative for Climate Investment Funds being administered by the World Bank to help developing nations battle global warming, according to the Japanese government.

Nukaga told reporters Friday ahead of the G-8 that he planned to discuss "various economic issues" with Paulson, including possibly exchange rates.

The dollar has recently recovered to about 108 yen. But that came only after Paulson warned this week that he isn't ruling out intervention to stabilize the currency, and U.S. Federal Reserve Chairman Ben Bernanke suggested the Fed is prepared to raise rates to fight inflation.

Dollar weakness has in part pushed up oil prices as some traders invest in oil as a hedge against inflation and a slumping greenback. A declining dollar can also erode the value of exports from Japan and Europe to the U.S. when earnings are repatriated.

The G-8 session - bringing together finance ministers from the U.S., Japan, Russia, Germany, France, Britain, Italy and Canada - is one of several ministerial meetings leading up to the July 7-9 summit in the northern island of Hokkaido.

G-8 finance ministers are having dinner with their counterparts and other officials from Australia, Brazil, China, South Korea, South Africa and Thailand to weigh the impact of surging oil and food prices on the global economy, the Ministry of Finance said.

Oil spiked to nearly $140 a barrel last week, and several Asian countries, including India, Indonesia and Malaysia, have cut fuel subsidies, raising retail prices for millions of consumers.

The world is also grappling with an emerging food crisis as prices of corn, wheat, rice, soybeans and other agriculture products have been spiraling higher. The gains are due to a mixture of factors including high oil prices, changing diets, urbanization, expanding populations, extreme weather, growth in biofuel production and speculation.

The food price hikes have set off riots and protests from Africa to Asia and raised fears about a global food crisis that could cause millions more people to suffer malnutrition.

Japanese Economy Minister Hiroko Ota expressed worries about the U.S. economy and said she hoped that the G-8 participants will be able to work together to stabilize tumultuous financial markets.

She said the tax rebates recently sent to 130 million American households should help the health of the U.S. economy, but still sent a cautionary note.

"It is necessary to keep a close watch," she told reporters.


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