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17 October 2008

Challenge Of Food Security In The Middle East

It is not just the question of the approaching beyond oil age, which is worrying some Middle Eastern countries, especially oil producing ones. The prospect of loss of oil and gas as a major source of income and domestic energy, is now compounded by another major problem and that is the rising price of food.
Lack of water is one factor which is making agriculture and food production more costly. This is together with years of government neglect for the agriculture sector. Until now, many Middle East countries could import food cheaply from abroad, and subsidize it in order to make it affordable to their population. But now, as price of food is increasing, this is making the job of importing and subsidizing much more costly.
This is especially true in countries which are not rich in natural resources, such as Egypt and Jordan. Rising food prices have added to instability in both countries. For example, there were riots in Egypt in April this year over rising bread prices (see video). Such instability provides an opportunity for extremist groups to gain more support by offering their own subsidized food services, as has been the case in Jordan. These services bring more support, and credit for such organization, while the government is made to look corrupt and incompetent.
One of the proposals which is being looked at is for such countries to follow the example of Brunei in the 1970s. Realizing that it does not have the capacity to produce its own food on its own soil, the Brunei government bought massive farms in Australia. Whatever food was produced there, it imported, thus making its food production less vulnerable to hostile local weather conditions. The reduction in dependency on foreign markets also enabled the government to become less vulnerable to massive market fluctuations in prices in international market.
Now rich Saudis and Kuwaitis are doing the same, by scouring places as far away as Sudan, to Ukraine. However, this may lead to resentment in such countries, whereby Saudis are seen to be buying up much needed commodity for themselves, while locals struggle.
Developing domestic capacity to locally produce food is the best long term solution. Many Middle Eastern countries are suffering from high unemployment. More want to diversify their economy away from oil. This is especially true as a recent report from the International Energy Agency (IEA) stated that $45 trillion is needed for investment in non-oil sources of energy in order to reduce carbon dioxide emissions by 50% by the year 2050. This will hit the pockets of oil producers even further.
Investing in the food sector could produce the jobs and diversification needed. It could also add to their strategic importance, due to rising importance of food as a strategic asset by governments all over the world. Life without oil would be difficult. Without food, it would be impossible.


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