MANILA, PHILIPPINES - The Asian Development Bank (ADB) is to help Pacific countries come up with ways of cushioning the impact of high prices on the poor.

As a result of sharp increases in the price of fuel, some Pacific countries are experiencing double-digit inflation, power shortages, and pressure on government budgets.

In response, ADB has approved technical assistance of $225,000 to help developing countries in the region fully assess the impact of rising commodity prices. The study will identify short to medium-term policies needed to address price increases, including strengthening social safety nets, and promoting energy conservation.

The response plan will be prepared in close coordination with development partners.

"The rapid increase in world prices and the likelihood that these prices will remain high for some time indicate a strong need to assist the Pacific adjust to the new conditions," says Indu Bhushan, Officer-in-Charge of ADB's Pacific Department. "The technical assistance will provide recommendations on the next steps to help the region respond and cope with high global prices."

A recent ADB study, "Living with High Prices", indicates that recent price hikes in the Pacific may lead to a 10% reduction in the spending power of low-income households in some Pacific developing member countries, and an additional 5% of their population may fall into poverty during 2008. The rise in world prices could also potentially worsen existing vulnerabilities in Pacific countries affected by climate change and natural disasters.