(Recasts, adds details from Zoellick conference call)
By Lesley Wroughton
WASHINGTON, July 2 (Reuters) - World Bank President Robert Zoellick on Wednesday urged swift action by leaders of the Group of Eight industrial countries and oil-producing nations to address rising poverty due to a crisis in global food and fuel prices.
"We are entering a danger zone," Zoellick wrote in a July 1 letter to Japanese Prime Minister Yasuo Fukuda, who is chairing the G8 summit in Hokkaido next week.
"What we are witnessing is not a natural disaster — a silent tsunami or a perfect storm. It is a man-made catastrophe, and as such must be fixed by people," he said in the letter, which was also copied to leaders of the United States, Canada, France, Germany, Italy, Russia, Britain, and the United Nations.
Zoellick said higher prices threaten a growing number of countries with rising poverty and social instability. Food riots have already occurred in 30 countries and unrest over high fuel prices is spreading.
Ahead of a G8 leaders’ summit in Japan on July 7-9, Zoellick said $10 billion will be needed for emergency food aid and to help countries deal with the double impact of rising food and fuel prices.
Zoellick said in 41 countries, the combined effects of rising food and fuel prices since January 2007 cut into gross domestic product by between 3 percent and 10 percent.
"These numbers translate into broken lives and stunted potential," he said.
He said immediate action was needed to ensure that the World Food Program was properly funded to get emergency food aid to people in badly affected areas.
World Bank assessments in 50 countries estimate that of the $10 billion, about $3.5 billion is needed for social programs that target the poor and to distribute seeds and fertilizers to farmers to help boost farm production.
Zoellick also said increasing oil production "would be constructive" to ease fuel and food costs, which are affected by the rise in oil prices to $142 a barrel.
The World Bank is seeing evidence that countries fear that the global food market is seizing up, which could increase food hoarding by governments and further boost prices.
"We need to get countries to remove these barriers and in the future I think we should look at the notion of some virtual humanitarian stop system, perhaps building on the type of logic the IEA has used for oil stocks," Zoellick told a conference call with reporters. The International Energy Agency coordinates the release of emergency oil reserves held by member countries.
In addition, he appealed for an increase in assistance to the World Bank for grant handouts through a recently established $1.2 billion rapid financing facility, which included $200 million for grants.
But he said that $200 million grant money was already spent on assistance for 12 countries and the World Bank currently has almost $400 million in additional requests from 31 countries struggling with higher food and fuel costs. (Reporting by Lesley Wroughton, Editing by Leslie Adler)