Washington: Terming high global commodity prices a "grave threat", Finance Minister Pranab Mukherjee has called for developing countries to increase their investments in agriculture to improve crop productivity.
   
"The recent commodity and food price rise and their volatility constitute a grave threat to economic growth and food security in our economies," Mukherjee said at a meeting of G-24 Finance Ministers here last evening.
   
He took over as the new chairman of the group from South African Finance Minister Pravin J Gordhan toward the end of the meeting on Thursday.
    
The G-24 grouping comprises 24 developing countries from Asia, Africa and Latin America. It aims to ensure increased representation and participation of developing countries in negotiations on the reform of the international monetary system.
   
Economic development and poverty alleviation, he said, is a challenge and the next few months would be crucial for the global economy.

"Increased investment in agriculture and productivity should be the strategic priority of G-24 to cool prices and provide food security to our people. There is a need to ensure transparency in commodity markets," he said.
   
Mukherjee further said the G-24 should continue to push for more ambitious progress on reform of the governance mechanisms of international financial institutions

Danger of currency war if economic crisis deepens Pranab Mukherjee warned the international community that there is danger of a currency war if the ongoing economic crisis deepens.
   
Such a currency war can be avoided through dialogue and not through competitive devaluations, Mukherjee stressed at a crowded press conference of Finance Ministers of BRICS nations Brazil, Russia, India, China and South Africa at the headquarters of the International Monetary Fund here.

"Yes, if the crisis deepens further and there is greater volatility in financial flows, there is an increased risk of this (currency war) happening," Mukherjee said in response to a question.

"But our view is that if such tensions arise, it should be eased through the dialogue and not through competitive devaluations," he said.
    
Mukherjee pointed out the currencies used in BRICS countries should be widely appreciated and should be taken into account while determining the ingredients of special drawing rights (SDR) maintained by the IMF, as these nations' contributions to global output and the economy is increasingly substantially.
   
"But we are not suggesting right now, because there are many other factors which ought to be taken into account, including free convertibility and other things which are not uniform, but the importance of these currencies has increased," Mukherjee said in response to a question.

Channelise surpluses for infra in developing nations.  Amid recessionary fears in advanced economies, Pranab Mukherjee has called for channelising global surpluses to build infrastructure in developing nations to boost world economy.
    
Insisting that growth process needs to be made more broad-based and especially strengthened in developing countries, he said the G20 needs to focus more sharply on the development aspects.
    
"If we need to add demand to the global economy to offset the moderation of demand by industrialised countries as they contract final output, perhaps a good way of doing this is to expand infrastructure investment in developing economies," Mukherjee said.
    
He was speaking at the G20 Finance Ministers' and Central Bank Governors' dinner meeting here last evening.
    
G20 is a grouping of developed and developing nations. Mukherjee said many emerging economies have developed the capacity to grow rapidly but are constrained by poor infrastructure.
    
"Financing infrastructure development in these economies could contribute to sustainable global growth," he added.
    
Talking about the G20 Cannes Summit, the Indian Finance Minister said that it should focus on medium-term growth. "...our medium term action plan for Cannes may not seem credible unless it addresses short-term growth and stability concerns as well," he said.
    
Mukherjee further said that the stress in euro zone and policy options of handling them should be in the G20 Framework.

(Agencies)