Wednesday, May 07, 2008

Squeeze the Sheikh of every last Dirham and....

On Sunday US President George W Bush blamed India for rising global food prices, provoking a backlash from Indian politicians, who retorted that the US policy of promoting corn-based ethanol in motor fuel supplies has had bigger impact on world food prices.

Now I felt like a good laugh. Here is the President of the most powerful nation in the world asking a third world country of 1.1 billion people not to eat. Bad advise. Has the debilitating American economy dented Bush administration’s straight thinking skills? May be India can solve world food problem as he’d like to think; but should it starve itself in the process?

I think of a natural hedge. Oil prices surge above $122 per barrel. India is a net importer of oil and the price rise leads to inflation of over 7%. How about revoking the ban on export of non-basmati rice and exporting the grain at $ 2000 a ton to OPEC nations? Could it not offset oil price rise?

Squeeze the sheikhs of every last Dirham…. And buy their oil with some of it.

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