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Middle East and North Africa 2012 Food Prices Nutrition and the Millennium Development Goals.IMF and World Bank Global Monitoring Report
Middle East and North Africa 2012 Food Prices Nutrition and the Millennium Development Goals.IMF and World Bank Global Monitoring Report
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Middle East and North Africa 2012 Food Prices Nutrition and the Millennium Development Goals.IMF and World Bank Global Monitoring Report

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Middle East and North Africa 2012 Food Prices Nutrition and the Millennium Development Goals.IMF and World Bank Global Monitoring Report

Middle East and North Africa 2012 Food Prices Nutrition and the Millennium Development Goals.IMF and World Bank Global Monitoring Report

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  • 1. Global Monitoring Report 2012 Food prices, Nutrition, and the Millennium Development Goals (MDGs) Middle East and North Africa April 2012 Progress toward the MDGs Middle East and North Africa has reached the poverty target and the target on access to improved sanitation facilities. The region is making fast progress toward achieving universal primary education and gender equality. Nevertheless, progress toward ensuring access to safe drinking water and other health-related MDGs like maternal mortality are lagging (figure 1). Progress toward halving the proportion of people who suffer from hunger is considerably lagging in Middle East and North Africa. Only 1 out of twelve countries for which data are available has achieved the development target. At the current pace, it seems unlikely that most countries in the region will reach the nutrition goal by 2015 (figure 2). Figure 1. Global and regional performances 100% 90% Figure 2. Progress toward reducing undernourishment Developing countries 100% Middle East and North Africa 100% 96% Seriously off track On track Achieved 87% 88% Low and Middle  Income 80% 72% 71% 68% 70% Progress toward  2015 Off track 93% 60% 60% 51% 68 24 18 17 60% 52% 50% 40% 38% 30% Middle East and  North Africa 20% 11 1 10% 0% MDG 4a.  MDG 4a.  MDG 1a. Extreme MDG 2a. Primary  MDG 3a. Ratio of  poverty (% of  completion rate,  girls to boys in  Mortality rate,  Mortality rate,  primary and  infant (per 1,000  under‐5 (per  population below  total (% of  secondary  1,000) relevant age  live births) $1.25 a day in  education (%) group) 2005 PPP) MDG 5a.  Maternal  mortality ratio  (modeled  estimate, per  100,000 live  births) MDG 7c.  Improved water  source (% of  population  without access) MDG 7c.  Improved  sanitation  facilities (% of  population  without access) Note: a value of 100% means that respective MDG has been reached. Values denote present progress as illustrated by most recent available data: Extreme poverty—2010; Primary completion rate—2009; Ratio of girls to boys in primary and secondary—2009; Mortality rate, infant—2010; Mortality rate, under 5—2010; Maternal mortality ratio—2008; Improved water source— 2010; Improved sanitation facilities—2008. Source: World Bank staff calculations based on data from the World Development Indicators database. 0% 20% 40% 60% 80% 100% Percent of countries Note: Bold figures denote number of countries in each category. Source: World Bank staff calculations based on data from the World Development Indicators database. Food price spikes and nutrition Countries in the Middle East and North Africa rely on food imports, particularly wheat, for at least 50 percent of domestic consumption. Thus, higher international prices can put considerable pressure on government and household budgets, depending on the level of domestic consumption subsidies and the pass-through from international prices. In the Arab Republic of Egypt, Djibouti, and the United Arab Emirates, more than 40 percent of a rise in international food prices is reflected quickly in domestic food prices, while in Jordan and the Republic of Yemen, countries with relatively weak fiscal positions and a large dependence on food imports, the pass-through is 20–40 percent (World Bank 2011c). Higher domestic food production insulates Algeria and Tunisia more than other MENA countries from international price shocks. Oil exporters are well placed to cope with higher food prices, because their oil revenues have risen along with their food import bill. Since energy is an important input to agricultural production, increased oil prices have contributed to higher food prices. In times of high food prices, the double burden of malnutrition and chronic disease increases, and obesity and undernutrition may coexist within the same household and the same person. Poor families switch away from nutritious food and buy “empty calories”. Combined with changes in metabolism, these “empty calories” will increase the rates both of stunting and anemia and of overweight and obesity in many middle income countries. For instance, in the Arab Republic of Egypt about half the women with anemia are overweight or obese. Policy responses The chosen policy mix at the country level depends critically on how much of a country’s food needs to be imported, how much the poor spend on food, and the socio-economic characteristics of the poor affected. The policy mix also depends on a country’s integration with regional and world markets, its level of productivity compared to what is achievable, and on its government’s capacity to target the poor and vulnerable through mitigating interventions. In addition, much is contingent on a county’s initial macroeconomic condition and thus its ability to expand public expenditure programs or to provide tax incentives without jeopardizing fiscal sustainability. The World Bank Group 1818 H Street, NW, Washington DC 20433 Email: gmr@worldbank.org www.worldbank.org/gmr2012
  • 2. Global Monitoring Report 2012 Food prices, Nutrition, and the Millennium Development Goals (MDGs) Middle East and North Africa April 2012 In terms of policy responses, short-term measures should aim at mitigating the immediate adverse impact on the poor and vulnerable. As food prices rose, many governments expanded (or set up) food subsidy programs to alleviate economic hardships. In the Middle East and North Africa, for example, spending on these programs reached 5–7 percent of gross domestic product (GDP). But, such programs entail trade-offs and may threaten other investments. In addition, price subsidies generally target foods that are low in micronutrients, distort relative prices, and may create negative incentives for people to diversify their diets once the crisis is over. Long-term measures should seek to address demand and supply side imbalances at the regional and local levels. One of the challenges the region has to overcome includes high trade costs in food, particularly at the regional level. For instance, trade costs within the region exceed those incurred externally with Europe. Several explanatory factors stand out, in order of restrictiveness: non-tariff measures that constrain trade processes; the low quality and fragmentation, by country, of logistics services such as trucking; and less developed intraregional infrastructure, such as ports, that easily connect the Maghreb to the Mashreq, and few active transport corridors between countries. According to recent research, reducing trade costs by just 5 percent could increase trade between the Maghreb and Western Europe by 22 percent, and intra-Maghreb trade by 20 percent.    Various MNA countries are investing in agriculture abroad. Attention is needed to ensure responsible agro-investment from foreign those investors, and to secure the land rights of poor farmers in the recipient country. Increased foreign investments can spur agricultural productivity growth, fiscal revenue, employment, and local incomes, but may also result in local people losing land on which their livelihoods depend (Deininger, K. et al, 2011). Capacity strengthening is needed to ensure that the terms and conditions of land deals enable the local (farming) communities to seize opportunities and mitigate risk for the investing and recipient country. Support from international development partners Figure 3. Net ODA disbursements to developing regions (US $ million, 2009 prices) In the Middle East and North Africa, Egypt received more than 50 percent of regional ODA disbursements from 1990 to 1999, followed by Morocco (11 percent) and Jordan (8 percent). That changed during the 2000s, when disbursements to Iraq surged, as it became a strategic focus for the United States. Iraq has received more than $60 billion since 2000, or 59 percent of regional ODA flows during the 2000s (in real terms) (figure 3). Despite the spike in food prices, ODA commitments from all donors to agriculture, food, and nutrition decreased as a share of total ODA between 2000 (10 percent) and 2010 (5 percent). Aid commitments to Middle East and North Africa from DAC bilateral ODA and multilateral developmental assistance to agriculture, food, and nutrition fell from $711 million in constant terms in 2000 to near $650 million in 2010. Assistance for nutrition represents only 1 percent of total agriculture, food, and nutrition commitments, despite widespread evidence that improved nutrition and gains in early childhood development are key in making long-term progress in development. 250,000 1991‐2000 200,000 2001‐2010 150,000 100,000 50,000 0 East Asia &  Pacific Europe &  Central Asia Latin  America &  Caribbean Middle East  & North  Africa South Asia Sub‐Saharan  Africa Source: World Bank staff calculations based on data from OECD. Figure 4. Composition of committed ODA to Middle East and North Africa in year 2010 (constant 2009 million $) Basic nutrition 1% Looking ahead, The Middle East and North Africa region is projected to see a modest 0.9 percent annual expansion of so-called Country Programmable Aid disbursements1; however, strong population growth implies an annual average 2.4 percent contraction (in real terms). Planned disbursements to Algeria, Iraq, Jordan, and Tunisia are expected to decline, while those to Egypt and the Republic of Yemen are expected to increase. Em ergency food aid  15% Rural d ev elopm ent 3% Fo od aid/Food  security   p rogram m es 5% Fo od, nutrition and  ag riculture 657 Total com m itm en ts  (exclu ding food, nutrition  and agriculture) 13,346  1. Country programmable aid (CPA) is a core subset of Official Development Aid (ODA) representing about 60 percent of total OECD Development Assistance Committee (DAC) member countries’ gross bilateral ODA and excludes unpredictable components such as food aid and flows that do not have direct development impacts such as donor administrative costs. Ag riculture and A gro‐ industries 76% Source: World Bank staff calculations based on data from OECD. The World Bank Group 1818 H Street, NW, Washington DC 20433 Email: gmr@worldbank.org www.worldbank.org/gmr2012

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