Eight Islamic nations adopt 10-year trade plan, vow to boost food supply

The Associated Press ,  Kuala Lumpur   |  Wed, 07/09/2008 2:30 PM  |  World

Eight Islamic developing nations, led by Malaysia and Indonesia, agreed to embark on joint ventures to boost food production as they endorsed a 10-year blueprint to expand trade cooperation.

In a joint statement Tuesday, the Developing Eight summit warned that the current global shortage and skyrocketing prices of food pose a "serious threat" to socio-economic stability.

They also urged the international community to take action to tame spiraling oil prices and pledged to collaborate to develop alternative fuels and peaceful uses of nuclear energy - in
apparent support for Iran's nuclear program that has been criticized by the West.

Malaysian Prime Minister Abdullah Ahmad Badawi said the group would promote joint ventures between their companies on projects to produce fertilizer, animal feed and create a seed bank to ease supply constraints in agricultural output.

"We want to cooperate in areas of food production. We want to increase food supply," Abdullah, who chaired the summit, told a news conference. "We have land, plenty of good and fertile land. We can form joint venture companies to invest."

Formed in 1997, the summit brings together Indonesia, Malaysia, Bangladesh, Pakistan, Iran, Turkey, Egypt and Nigeria - a market of nearly 1 billion people. The meeting coincides with the Group of Eight summit under way in northern Japan.

The Islamic group also endorsed a 10-year blueprint to raise trade among its members to US$517.5 billion by 2018, or 15 percent to 20 percent of their combined total estimated trade. The countries' trade with one another is currently around US$49 billion, or less than 5 percent of their total trade.

The plans include a preferential trade agreement to remove barriers on selected goods and ease visa procedures for their businessmen, Abdullah said. Only Malaysia and Iran have so far
ratified the preferential trade pact.

Iranian President Mahmoud Ahmadinejad said the global oil crisis was not due to tight supply but an "artificial situation" that was politically motivated.

"The market is full of crude oil ... the law of supply and demand is not functioning," he told reporters. "It is a political issue, so the solution would be a political solution."

Although Malaysia, Indonesia, Iran and Nigeria are oil-producing countries, their economies have been hit hard by rising fuel prices. Oil prices fell by US$4 a barrel on Monday, but remain at more than US$140 a barrel.

Malaysia and Indonesia recently raised fuel prices, which has sparked public protests. Indonesia has said it will quit the Organization of Petroleum Exporting Countries because of declining oil reserves and investments. Iran is OPEC's second largest oil producer.

Indonesia's production of roughly a million barrels a day is at its lowest level in 30 years.(**)

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