Statement sees food, oil prices as threat

The group is expected to make a declaration Wednesday on various issues.

MCCLATCHY NEWSPAPERS

TOKYO — The final draft of a declaration to be issued at the end of the Group of Eight summit meeting in Hokkaido regards the sharp rise in crude oil and food prices as a grave threat that could stall the world economy, it has been learned.

However, the document to be adopted on the final day of the annual gathering does not offer any workable prescriptions to counter the surge in crude oil prices, partly due to a conflict of interests among the G-8 nations over regulations on the flow of speculative funds into the oil market, according to government sources.

To wrap up this year’s three-day meeting in the lakeside town of Toyokocho, the G-8 leaders are scheduled to issue a declaration Wednesday that will address a wide range of global and regional issues, including the fight against global warming.

Meanwhile, the draft declaration praises Japan’s sectoral approach to the prevention of global warming, which sets a greenhouse gas reduction target for each industrial sector.

The draft cites strong concerns harbored by the G-8 leaders about the oil and food price increases, stating that the world economy could deteriorate as it faces uncertainties and downside risks.

This perception is even more pessimistic over the prospects for the current global economy than opinions expressed by G-8 finance ministers during a meeting held in June in preparation for the Toyako summit meeting.

To defuse the crisis, the draft urges each G-8 country to take all possible means by implementing appropriate measures both individually and collectively.

Short-term measures cited by the draft declaration as a means of curbing the rise in crude oil prices include ensuring oil producers increase their production and supply capacity. The document also calls for adopting such medium-term policies as increasing investment in oil refineries.

However, the draft does not present any measures that could immediately help reduce the flow of speculative funds into the oil market, which has been widely seen as a factor behind the crude oil price increase. The document states only that it is essential to boost the transparency of oil prices in the futures market.