Monday, April 24 2006 10:26 Hrs (IST) - World Time -

Washington: India has warned that rising oil prices would have a serious impact on importing developing countries, which may face a difficult task attaining the Millennium Development Goals (MDGs).

Developing countries are more vulnerable, especially emerging markets in Asia, where this trend has manifested itself in higher current account deficits, balance of payments pressures, increased public debt and rising interest rates, A.K.Jha, Secretary Economic Affairs of the Government of India told the Development Committee here yesterday (Apr 23, 2006).

"A sustained escalation of global energy prices would have a serious impact on the welfare for a large number of oil importing developing countries, which may suffer from negative resource flows," Jha, member of the Indian delegation participating in the Spring Meetings of the World Bank and the International Monetary Fund taking place here, said.

"To illustrate, in 2005, while the net ODA was US$ 106 billion, the outflow from the developing countries on account of higher oil prices was an additional US$130 billion. If this trend continues, oil importing developing countries may face an uphill task in attaining the MDGs," he said.

All of the negative impacts along with inflation will adversely affect public investment and poverty reduction, he said.

On issues of Trade, India highlighted the fact that the development promise of the Doha Round is yet to be realised with the Hong Kong Round ending with mixed results and noting that there is yet another opportunity that remains this year.