Rising Price of Food in Africa and Middle East

The Middle East and North Africa region, MENA, has seen massive social and economic change over the past decades, as this graphic shows. In all these countries people are getting richer and populations younger. Both of these mean that calls for freedom are unlikely to go away. Food prices have always beena headache for regimes in this ecologically fragile region, where crop-failure Sources: CIA World Factbook, UN and Economist Intellige and spiking food prices are a constant worry. The graphic to the left, showing food prices, demonstrate that the height of the price of staples cereals exactly coincides with the start of the Arab spring. As environmental change and increasingly volatile world food markets look likely to become facts of life, price rises are sure to put pressure on governments in the MENA region. AGRICULTURAL STAPLES PRICES 1990-2015 RISING MENA WEALTH THE NUMBER OF YEARS THAT THE PRICE OF BREAD STAYED THE WHEAT (S/TONNE) BARLEY (S/TONNE) SAME IN EGYPT 350 300 250 2$ 36% 200 150 GDP PER CAPITA IN USS SINCE 1970 RISE IN FOOD PRICES THIS YEAR, ACCORDING TO THE WORLD BANK 4500 44m POPULATION GROWTH SINCE 1970| MAIZE (S/TONNE) RICE (S/TONNE) 300 4000 250 NUMBER OF PEOPLE WHO HAVE BEEN FORCED INTO POVERTY AND HUNGER SINCE JUNE 2010 200 3500 150 400 POPULATION & GDP PER CAPITA (S) SINCE 1970 100 1970 /// 1990 /// 2010 // 3000 ARORULATION: 15,310 a POPULATION: GDP:LAteN2.850 A POPULATION: 35,941 POPULATION: 7,418 GDP: 4,900 All the MENA countries will take steps to increase food subsidies this year in an attempt to forestall further popular unrest A POPULATION: 24,781 POPULATION: 4,500 GDP:1,040 2500 GDP: 258 GDP: 11.600 GDP: 27,600 DROPULATION: 13,931 HPOPULATION: 6,368 POPULATION: 25,341 " POPULATION: 12,234 GDP: 2.448 B POPULATION: 36,588 POPULATION: 20,411 GDP: 7,400 GDP: 376 GDP: 336 2000 COPULATION:5,070 POPULATION: 1,667 GDP: 394 POPULATION: 8,126 GDP: 3,175 POPULATION: 9,886 "POPULATION: 6,187 GDP: 9,480 250 POPULATION: 3,416 GDP: 280 GDP:5,300 WORLD FOOD PRICE INDEX BASE IS 100, AT 2003 PRICES DIARABIA POPULATION:1, 994 D POPULATION: 5,772 GOP 2,230 POPULATION: 4,334 D POPULATION: 16,199 GDP:4.370 DPOPULATION: 6.355 D POPULATION: 27,448 GDP: 13.800 GDP: 873 GDP: 24,200 200 E EGYPT POPULATION: 35,923 K POPULATION: 212 GDP:216 E EGYPT POPULATION: 56,843 K POPULATION: 212 GDP:746 POPULATION: 81,121 K POPULATION: 1,262 GDP: 6.200 GDP:1750 GDP: 8.710 GDP: 40,400 1000 30 E PALESTINIAN PALESTINIAN ERPITORIES L POPULATION: 232 GDP: 3.680 L POPULATION: 1,809 GDP: 18.100 L POPULATION: 7,512 GDP: 40,200 150 POPULATION:1,125 GDP: 162 POPULATION: 2,081 POPULATION: 4,039 GDP:899 HORLATION: 1,948 50 NUMBER OF COUNTRIES POPULATION:6,145 GDP: N/A ORULATION: 24,053 GDP: 302 GDP: 2,300 THAT EXPERIENCED RIOTS OVER RISING FOOD PRICES IN 2007/8 100 APR APR 1 One of the key triggers for the pro- tests that have since evolved into the "Arab Spring" was the recent sharp increases in the price of food. The protests that toppled the Ben Ali regime in Tunisia in January 2011, for example, began as demonstra- tions against escalating food prices and unemployment. protests, with riots in 38. In April 2008, the government of Haiti fell following continued food riots. "If you are poor in a poor country, you spend a significant proportion of your income on food," explains Robert Bailey, head of economie jus- tice policy at Oxfam. "Poor people spend about half of their income on The World Bank estimates that food and that can rise to 80 per cent for the very worst off." As a result, if food prices increase sharply in a short period of time, people are forced into very difficult decisions on how to adjust to this new reality. "Should they take their children out of school, get a second job (if there are jobs available), take on debt or Chatham House. "All of the other Arabgovernments have taken, or wil take, steps to increase food subsidies this year because economic prob- lems are seen as one of the biggest causes of unrest in the region and it is also relatively easy to do when compared to the problems associ- ated with political reform." In Egypt, the price of bread remained at the same price for the entire 30-year reign of Hosni Mubarak, Kinninmont says, "because heknewhowimportant it was". How- ever, in the end it was not enough because other food products were subject to high inflation for years. "One of the reasons for this was that manyfood suppliers were monopolies and they were perceived to have very close links to the regime - as a result, high prices were seen to be linked to corruption and crony capitalism." Because the region's economies are so state-dominated, people blame the government when prices rise, even if it is for reasons outside the regime's control. Another reason for the upris- ings is that few countries have sig- nificant agricultural sectors. It is notable that Morocco, which does have a significant farming industry, has seen far fewer protests than its neighbours. This may be because its farmers have benefited from the increase in prices. Protests tend to be seen more often in cities, because there are more people and they are more sensitive to food price movements than those in rural areas, who can often shield themselves by grow- ing food either for themselves or to sell. Urban populations can also mobilise more effectively and once protestors are out on the street voic- ing their concerns about the price of bread, other grievances can easily be added to the mix. As a result, it is not just govern- ments in the MENA region that have reason to be worried. We have already seen a sharp crackdown on all forms of dissent in China, and as food and fuel prices approach the peaks reached in 2008, the impact on the urban poor in many African countries is more severe than that which accompanied the 2007-2008 food crises, according to risk con- sultancy Maplecroft. "Upcoming elections make this ominous con- ply, particularly when oil prices are also high." The Organisation for Economic Co-operation and Development (OECD) forecasts that the price of agricultural commodities will remain higher than average over S 2010 S 1990 PRICE, POPULATION AND THE SEEDS OF A REVOLUTION 1970 stellation of factors particularly chal- lenging for incumbent governments to address," says analyst Andy Tock. In view of the violent demonstra- Food prices may well tions that food price hikes sparked sparkunrest in Cameroon, food prices are 36 per cent higher than last year and these increases have pushed 44 million people worldwide into poverty and hun- ger since June 2010. While no-one would suggest that food prices were the sole, or even the main, cause of the outpouring of anger against the repressive regimes of countries from Morocco to Bahrain, they were one across much of Africa in 2008 - as well as their role in the MENAupris- Liberia and the DRC as ings this year - similar unrest may POLITICS Across the Middle East and North Africa food prices have been a huge issue for a generation, and the rising costs of staples was one of the pressures that led to the Arab Spring revolts. Far from beinga one- off, it's something that we will see more and more in coming years in the world's poorer regions, writes Mike Scott take place in the context of approach- elections approach ing elections in Cameroon, Liberia and the Democratic Republic of the Congo (DRC), he says. Some observers highlight the growth in demand for biofuels as a factor that exacerbates food price volatility. "Biofuels increase demand and therefore prices," says Bailey. "About 40 per cent of US corn pro- duction goes into the gas tanks of American drivers and that demand the long term. "The potential for price stabilisation or decline could be severely hampered by many fac- tors, such as those linked to climate change, price of gas and increasing water scarcity," adds a report from CropLife International. Political instability may be a fea- ture of many parts of the world for years to come. O sell off assets?" When such concerns combine with of the issues that fed into a perfect anger overa lack ofjobs and poor liv- ingstandards, it can create a tipping point that brings people out on to the streets. "Food prices were a definite factor in Tunisia and Egypt," says Jane Kinninmont, senior research fellow in the Middle East and North storm of hardship and civil unrest in the Middle East and North Africa (MENA) region, according to the aid agency Oxfam. It should be little surprise given that in the food price crisis of 2007/2008,61 countriesexperienced Africa Programme at the think tank is unresponsive to changes in sup-