Beyond the Arab Awakening:Policies and Investments for Poverty Reduction and Food Security

1. Beyond the Arab Awakening:
Policies and Investments for Poverty Reduction
and Food Security
Clemens Breisinger, Olivier Ecker, Perrihan Al-Riffai, Bingxin Yu
Development Strategy and Governance Division
International Food Policy Research Institute
USAID
Washington D.C., November 22, 2011

2. Causes of the Arab Awakening
• Political
 Lack of democracy and justice
• Sociological
 Lack of dignity and freedom
• Economics
 Official numbers looked promising in many
countries…

3. Perception-based data suggests that
economics did play a role
Yemen
Iraq
Sudan
Djibouti
Morocco
Jordan
Algeria
Syria
TunisiaEgypt
Mauritania
Lebanon
Libya Bahrain
Saudi Arabia
UAE
Kuwait
Qatar
GDP per capita (PPP, current international $)
Source: Based on Gallup World Poll (2011) and WEO (2011) data.
Note: Bubble size: Number of dissatisfied people. Color scale: Change in level of dissatisfaction (time period between first and last surveys undertaken in the country;
last survey: 2010, first survey: 2005-2009): green: decrease; orange and red: increase, with red: increase at an annual growth rate of at least 2 percentage points.
Percentage of people dissatisfied
with their standard of living

4. Official data may have underestimated poverty:
The Arab growth-nutrition puzzle

5. …and underestimated income inequality
(GINIs) too
Country
HCE
1990s
HCE
2000s
HCE*
1990s
HCE*
2000s
HCE/HCE*
1990s
HCE/HCE*
2000s
Djibouti 150.5 93.5 90.6 119.5 1.66 0.78
Mauritania 78.7 88.3 98.8 97.3 0.80 0.91
Yemen 82.6 84.0 128.5 110.1 0.64 0.76
Morocco 155.4 161.4 150.1 181.1 1.04 0.89
Tunisia 151.3 182.4 213.6 278.0 0.71 0.66
Egypt 100.9 121.1 219.2 312.8 0.46 0.39
Jordan 151.6 210.1 231.3 315.2 0.66 0.67
Syria 129.8 125.5 200.3 212.3 0.65 0.59
Source: UNDP 2011
Note: Per capita Household Consumption Expenditure (HCE) derived from household surveys and national income
accounts (HCE*) (in 2005 PPP) and their annual percentage change for Arab Countries, 1990-2000 and 2000-2009

6. Lack of data may also have contributed to the
neglect of policy research in the region
• On RePEc, a keyword search
for “MENA” and “Arab” yields
1,150 and 1,550 research
papers, respectively, a search
for “Africa”, “Asia,” and “Latin
America” shows 21,760,
16,400, and 11,720
• Lack of demand from policy
makers and incentives for
analysts
• Policy research can help
identifying pros and cons of
alternative options
• And, “rationalize” the debate Source: Wagstaff & Adam (2011). The (gradual) democratization of
development economics.
http://blogs.worldbank.org/developmenttalk/

7. Macro- and micro dimensions of food security
MACRO: Economy & state
Infrastructure &
trade
Public health &
education
Agriculture &
water
MICRO:Household& householdmembers
Food
 Income
 Prices
 Production
for own
consumption
Assets& services
 Water
 Shelter &
sanitation
 Health care
 Information &
knowledge
Access
Food & nutrient
intake
Health status
Nutritional
status
Human capacity &
productivity
ECONOMIC & SOCIAL
DEVELOPMENT
Interventions External shocks
Economic policy &
investments
Social protection
Nutrition & health
programs
International economic
crises & climate change
Natural disasters &
conflicts
Diseases & Epidemics
Resource
allocation
& care
Quality of institutions
& governance
Economic growth
& structure
Keysectors
Poverty
Macroeconomic
stability

8. Macro-level food insecurity risk in Arab-TI
Source: Breisinger et al. 2011, forthcoming

9. Micro-level food insecurity risk in Arab-TI
Source: Breisinger et al. 2011, forthcoming

10. A new Arab food insecurity risk map
Source: Breisinger et al. 2011, forthcoming

11. What has been the policy response to the
food crisis and Arab awakening?

12. How to improve food security sustainably?
• For countries with macro-challenges
– Export-led economic growth to generate foreign
exchange?
– What is the role of agriculture?
• For countries with micro-challenges
– Pro-poor and job-creating growth, in which
sectors?
– Public spending, for example targeted transfers to
households?

13. Cross-country econometrics to answer
some of these questions
1. ‘Child health production function’: 𝐻 𝑘 = 𝑓(𝐼 𝑘, 𝐸 𝑘, 𝜓 𝑘)
H = health status, I = health inputs, E = health environment factors, ψ = genetic health
endowment of child k
2. Reduced-form child nutrition model: 𝑁𝑘 = 𝑓(𝑌𝑘, …)
N = nutritional status, Y = household income
=> Income elasticity wrt. nutritional status: 𝜂 𝑘 =
𝑑𝑁 𝑘
𝑁 𝑘
𝑑𝑌 𝑘
𝑌 𝑘
=
𝑑𝑙𝑛𝑁 𝑘
𝑑𝑙𝑛𝑌 𝑘
, approx.: 𝑑𝑙𝑛𝑁𝑘 = 𝜂 𝑘 𝑑𝑙𝑛𝑌𝑘
3. Cross-country nutrition model (in first differences):
𝑑𝑙𝑛𝑁𝑖 = 𝜂𝑖 𝑑𝑙𝑛𝑌𝑖
N = child nutrition situation, Y = national income of country i
4. Decomposition of growth by sectors: 𝑑𝑙𝑛𝑁𝑖 = 𝑥(𝜂𝑖𝑥 𝑠𝑖𝑥 𝑑𝑙𝑛𝑌𝑖𝑥)
η = sector participation component, s = sector share component of sector x (Ag, non-Ag; Ag, Ma,
In, Se value added)
5. Regression model (based on time series data):
Δ𝑁𝑖𝑡 = 𝜋0 + 𝜂Δ𝑙𝑛𝑌𝑖𝑡 + 𝜑𝑁𝑖𝑡−1 + 𝛾𝑍𝑖 + 𝑢𝑖𝑡
N = prevalence of child undernutrition, Y = GDP per capita, t = time period, Z = trend effects

14. ***, **, * statistically significant at the 1%, 5%, and 10% level, respectively.
Large scope for making growth more pro-
poor in Arab-TI, especially in agriculture
1 2 3 4 5 6
Growth (percapita)
GDP 100.0 -0.07 100.0 -0.12 ***
AgVA 15.3 0.70 ** 1.06 *** 19.8 -0.46 *** -0.34 ***
Non-AgVA 84.7 -0.07 80.2 -0.08 ***
MaVA 13.3 -0.39 * 20.5 -0.54 ***
InVA 25.5 0.03 13.3 0.11 †
SeVA 45.8 -0.27 ** 46.4 0.00
Stuntinglevel,lagged (t-1) -0.16 † -0.12 -0.09 -0.25 *** -0.27 *** -0.28 ***
F-value 2.2 2.8 3.4 2.2 2.3 2.5
R-squared 0.50 0.59 0.66 0.47 0.48 0.51
R-squared adjusted 0.27 0.38 0.47 0.25 0.27 0.30
Observations 66 66 66 340 336 336
Countries 20 20 20 97 96 96
Ag.&non-
ag.growth
Sector
growth
Arab-TIregion ROW
Overall
growth
Ag.&non-
ag.growth
Sector
growth
Sector VA share
(%ofGDP)
Overall
growth
Sector VA share
(%ofGDP)

15. One reason why agriculture is not as pro-poor in
Arab countries is because it’s no longer the
major source of income for the poor
0% 20% 40% 60% 80% 100%
1
2
3
4
Rural quintile 5
1
2
3
4
National quintile 5
Agriculture
Non-agricultural labor income
Other income
0% 20% 40% 60% 80%100%
1
2
3
4
Rural quintile 5
1
2
3
4
National quintile 5
Agriculture
Non-agricultural labor income
Other income
Syria: Sources of household incomes Egypt: Sources of household incomes
Source: Based on Syria Central Bureau of Statistics 2007 (FIES 2006/07) and CAPMAS HIECS 2008/09 for Egypt.

16. Public spending in Arab countries is
high compared to other regions

17. But, there is scope for improving the efficiency of
public spending, especially in social sectors
***, **, * statistically significant at the 1%, 5%, and 10% level, respectively.

18. Solutions have to be country-specific:
Yemen National Food Security
Strategy

19. IFPRI has supported Yemen to develop a
National Food Security Strategy
 Assessment of the current food security
level
 32 percent of the Yemeni population is food
insecure
 Food insecurity is more concentrated in rural
areas
 7-Point Action Plan for achieving Food
Security Targets
 Decisive policies for subsidy reform, agriculture,
water
 Targeted investments to support pro-food secure
growth and food insecure households
 Smart programs for child nutrition, women
education and qat reduction
 Digital Food Security Atlas
-20
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
2009 2011 2013 2015 2017 2019
Reduction of food insecurity under NFSS
National
Rural farm
Rural nonfarm
Urban

20. Other country examples of IFPRI’s work
in MENA
• Egypt - Nile river water allocation
• Syria and Yemen - Impacts of climate change
• Morocco - Impacts of global food crisis
• Somalia – Effect of droughts on conflict
• Improving resilience to conflict in MENA, with
examples from Somalia, Sudan, Yemen and
Egypt

21. Discussion of next steps for IFPRI and
partners
• Conference “Priority setting for food security and
poverty reduction in the Arab World” in Alexandria
• Support data collection and analysis to foster evidence-
based decision making
(example: ReSAKSS)
• Research on key issues, such as food security, growth-
nutrition puzzle, role of agriculture, public spending
efficiency, pro-poor growth strategies etc.
(example: Country Strategy Support Programs)
• Food Policy Partnerships
(example: CAADP)