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IFPRI Policy Seminar: Food Security and  development in the Arab World: in               Transition?                      ...
Outline   Short-term effect of transition?   International community and its role   Way forward   Where to start first...
Short-term effect of transition?
Situation in selected countries:Egypt Poverty rates have high variance (close to 0 in Suez but 60% in Assiut) 1/5 of Egy...
Weak governance indicators                             MENA                             with Source: WGI and IMF.        G...
Weak Governance indicators
Food insecurity in the Arab region - a major obstacleto transition and conflict resolutions         Natural   Instability ...
Changes in food security policiesNew social measuresIncreased subsidies and transfers: Jordan, Syria, Tunisia, Morocco, B...
Changes in food security policiesNew social measuresJobs: Egypt, Tunisia, Morocco, Bahrain, Oman, Saudi Arabia, Algeria(p...
Scenarios definition – Benefits of deeper Arab EconomicSimulation exerciseIntegration (Trade)Work in progressScenarios:   ...
CFS Framework, 2012New framework for the international community•  Components:A. The Twin-Track ApproachB. Increasing smal...
Way forward1. Funding gap?   GAFSP is currently absent from the region   WB is in the process of developing the Arab Wor...
Way Forward2. Rethinking governance-control corruption/resource reallocation          Government Sector Budget            ...
Way Forward2. Rethinking governance - decentralization                                 Source: Global Forum for Reinventin...
Way Forward2. Rethinking governance - decentralization        Equity through local and provincial decision-making         ...
Way forward3. Enhance ownership and management of land Gini Coeffficient and Land distribution                            ...
3. Enhance ownership and management of landTargeted Countries                                Governance deficit and land  ...
Way forward4. Reform Social Safety Net Programmes and FiscalExpenditures                                    Most subsidie...
4. Reform Social Safety Net Programmes and FiscalExpenditures Crowding-out Effect of Military Expenditures vs. Social Expe...
Where to start first? AOAD Strategy and Emergency Plan agreed by Arab States  exist and despite some skepticism efforts b...
Knowledge GapTransition and Food Security      How to break a vicious circle of persistent conflict and chronic food inse...
Knowledge GapIncreased productivity and profitability      Cost/benefit analysis of water re-use, water harvesting and ot...
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Food Security & Development in the Arab World - In Transition?

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IFPRI Policy Seminar "Food Security & Development in the Arab World - In Transition?" presentation by Nadim Khouri, Deputy Executive Secretary, United Nations Economic & Social Commission for Western Asia at IFPRI on November 7, 2012.

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Food Security & Development in the Arab World - In Transition?

  1. 1. IFPRI Policy Seminar: Food Security and development in the Arab World: in Transition? Nadim Khouri Deputy Executive Secretary-UN Economic and Social Commission for Western Asia Washington, 7 November, 2012
  2. 2. Outline Short-term effect of transition? International community and its role Way forward Where to start first? Knowledge gap
  3. 3. Short-term effect of transition?
  4. 4. Situation in selected countries:Egypt Poverty rates have high variance (close to 0 in Suez but 60% in Assiut) 1/5 of Egyptians are calorie-deprived (receive less than 80% of required cal intake) 14% of under-5 are stuntingSyria Depreciation of the Syrian Pound and increase of import prices 30% of rural population is estimated to be vulnerableYemen The number of the severely food insecure almost doubled between 2009 and 2011, from 12% to 22% Food purchase on credit has increased by 43% and makes ¼ of total food purchase Malnutrition is increasing (13% of under-5 are acutely malnourished
  5. 5. Weak governance indicators MENA with Source: WGI and IMF. GCC Source: Doing Business, 2011
  6. 6. Weak Governance indicators
  7. 7. Food insecurity in the Arab region - a major obstacleto transition and conflict resolutions Natural Instability Commodity Shock price Shock Vulnerability to shocks makes poor households risk averse in their asset-allocation strategy , which is even more pronounced in TCs often characterized by a cascading series of a combination of political instability, natural shocks, and international price shocks with the result of ever- decreasing food-security levels and passing up more risky but more profitable businesses. Source: ESCWA
  8. 8. Changes in food security policiesNew social measuresIncreased subsidies and transfers: Jordan, Syria, Tunisia, Morocco, Bahrain, Saudi Arabia, Kuwait, Iraq, Syria(food subsidies on particular products-flour, meat, milk, sugar, cooking oil; wavedVAT and customs on some imports, transfers to state-run consumer corporations)Raised government salaries: Egypt, Jordan, Syria, Oman, Saudi Arabia, Algeria, Yemen(civil servants, military, retirees, payment of employer contribution to themandatory social security, reduction of working ours, minimumwage, unemployment allowance)Tax breaks: most countries(suspending special sales tax, reducing fuel tax, housing installment payments)Infrastructure: Tunisia, Bahrain, Kuwait, Saudi Arabia(accelerating investment projects, public housing construction)
  9. 9. Changes in food security policiesNew social measuresJobs: Egypt, Tunisia, Morocco, Bahrain, Oman, Saudi Arabia, Algeria(permanent hiring of temporary contractors, heavy recruitment in publicsector, employment program development) Restrictive Monetary Policy – Syria(to support the currency) Development of government institutions: Tunisia -Ministry of Regional and Local Development Development of NGOs: Egyptian Food Bank, Lebanese Food Bank
  10. 10. Scenarios definition – Benefits of deeper Arab EconomicSimulation exerciseIntegration (Trade)Work in progressScenarios: sim4:sim3+ An ArabSim 1 (FTA): A full implementation of preference for migration quotas inintra-Arab FTA OPC sim3: sim3+aSim2 (TR) =Sim1+ a 50% reduction of common external tariffs (for nonintra-Arab transport costs agriculture productsSim3 (CU) : Sim2+ a customs union for sim2: sim1+ 50% reduction innon agricultural products. The Common transport costexternal tariffs is supposed to be equalto the minimum tariff applied by non oilproducing countries. Countries that havea lower tariff are supposed to maintain sim1: A complete Free trade Areatheir current tariffs.Sim4 (Migration): Sim3+the replacementof 20% of non Arab migrant stock byArab migrants Source: ESCWA 10
  11. 11. CFS Framework, 2012New framework for the international community• Components:A. The Twin-Track ApproachB. Increasing smallholder-sensitive investments in agricultureC. Addressing excessive food price volatilityD. Addressing gender issues in food security and nutritionE. Increasing agricultural productivity and production in a socially, economically and environmentally sustainable mannerF. NutritionG. Tenure of land, fisheries and forestsH. Addressing Food Security and Nutrition in Protracted Crisis Core actions defined to unite and organize against hunger at country, regional and global levels Agreed in Rome October, 2012
  12. 12. Way forward1. Funding gap? GAFSP is currently absent from the region WB is in the process of developing the Arab World Initiative for Financing Food Security, but the size is unknown Arab funds are involved in food security. However, given their size, their contribution is seen as insufficient. Multi-donor Trust Fund highly needed for both short and long term interventions: 1. S-T: address the most vulnerable/fight hunger 2. L-T (but start immediately): investment to increase productivity, reduce market volatility, education and family planning, reform of safety net programmes
  13. 13. Way Forward2. Rethinking governance-control corruption/resource reallocation Government Sector Budget Inefficiency Leakages Rent Capture/Misappr. Corruption Actual resource transferred and utilized 13 Food Security
  14. 14. Way Forward2. Rethinking governance - decentralization Source: Global Forum for Reinventing Government, UN 2007
  15. 15. Way Forward2. Rethinking governance - decentralization Equity through local and provincial decision-making Key principle to decentralization Decisions and actions should be made at the lowest level except in cases where by reason of scale or the effect of the proposed actions, the tasks would be better achieved at governorate or central levels. Examples: National Conventions –National /Central vs. Land use planning – Governorate/Provincial vs. Municipal development –Local/Municipal
  16. 16. Way forward3. Enhance ownership and management of land Gini Coeffficient and Land distribution  Majority government owned land  Incoherent land management strategies and laws-Egypt: 45 laws;  Inelastic land supply – states ill-equipped to ensure pareto- optimal use of land (ex. military use); 37% of manufacturing firms identify access to land as a major obstacle to doing business;  untapped property tax collection (estimated tax Source: Majid (2004). potential for Baghdad is 300 mln USD/year)
  17. 17. 3. Enhance ownership and management of landTargeted Countries Governance deficit and land deals in Arab Countries Countries of Origin Source: ILC, 2012.
  18. 18. Way forward4. Reform Social Safety Net Programmes and FiscalExpenditures  Most subsidies are spent on fuel (3-7% of GDP).  Food subsidies, although inefficient and costly, are more effective in reducing poverty compared to fuel subsidies Targeting methods are mostly geographical or category-based with high leakages and low impact for the poorest Source: WB, 2012.
  19. 19. 4. Reform Social Safety Net Programmes and FiscalExpenditures Crowding-out Effect of Military Expenditures vs. Social Expenditures? (% of GDP) Military expenditure Public education Public health Country average expenditure average expenditure average 2000- 2005- 2001- 2005- 2000- 2005- 2004 2009 2004 2008 2004 2009 Bahrain - 3.10 2.79 2.66 Egypt 4.80 4.06 2.32 2.12 Iraq - - 1.01 2.58 Jordan - - 4.86 5.30 Kuwait 6.30 4.24 2.49 1.92 Lebanon 2.64 2.46 3.44 3.93 Oman 4.05 3.72 2.56 1.99 Qatar 2.14 - 2.37 2.07 KSA 7.27 5.97 2.99 2.78 Sudan - - 1.07 1.88 Syria - 5.09 2.21 1.45 UAE 5.73 1.84 1.09 2.44 1.81 Yemen 9.63 5.15 2.42 1.62 Arab Region 6.40 5.28 5.07 3.95 2.57 2.44 EAP 4.69 4.28 LAC 3.19 3.51 World average 2.39 2.48 4.33 4.45 5.64 5.76 Source: The World Bank Development Indicator (WDI) database (2011) .
  20. 20. Where to start first? AOAD Strategy and Emergency Plan agreed by Arab States exist and despite some skepticism efforts built in developing them cannot be ignored A revision of the Strategy and Emergency Plan could be the first step towards reigniting regional efforts in fight against food insecurity
  21. 21. Knowledge GapTransition and Food Security  How to break a vicious circle of persistent conflict and chronic food insecurity?Human Development and Food Security  Alternatives to subsidy systems ?  What policies to fight malnourishment?  Alternative mechanisms to empower women farmers?Economic Governance and Legal Framework  What regulatory apparatus for land ownership and management, FDIs?  What types of food reserves at country and regional levels?  Which institutions to address governance challenges at local levels?  Are Egyptian and Lebanese Food Banks replicable?
  22. 22. Knowledge GapIncreased productivity and profitability  Cost/benefit analysis of water re-use, water harvesting and other methods  What policies to discourage waste of water?  Policies to stimulate investment in rain-fed agriculture?  Regional R&D fund and R&D institutions?  Energy and fertilizers export-regional comparative advantage to be exploited?Regional Governance  How to mobilize funds for the implementation of the AOAD Strategy plan?  Rethinking coordination strategies among UN, research organization, regional organizations, funds? A new formal and permanent multi-stakeholder platform?  Trade policy in agriculture – intra and inter-regional trade? Role of food safety standards in agricultural trade? How critical are safety standards as opposed to trade agreements in boosting cross-border agricultural trade?

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