This document summarizes a presentation given by Nadim Khouri on food security and development in the Arab world. It discusses short-term effects of political transitions, weaknesses in governance indicators, increasing social measures to address food insecurity, scenarios for deeper Arab economic integration, and a new framework from the Committee on World Food Security. It proposes ways forward such as funding, governance reforms, land management reforms, and social safety net reforms. It also identifies remaining knowledge gaps around these issues.

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. Outline
 Short-term effect of transition?
 International community and its role
 Way forward
 Where to start first?
 Knowledge gap

3. Short-term effect of transition?

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 stunting
Syria
 Depreciation of the Syrian Pound and increase of import prices
 30% of rural population is estimated to be vulnerable
Yemen
 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. Weak governance indicators
MENA
with
Source: WGI and IMF. GCC
Source: Doing Business, 2011

6. Weak Governance indicators

7. Food insecurity in the Arab region - a major obstacle
to 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. Changes in food security policies
New 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; waved
VAT 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 the
mandatory social security, reduction of working ours, minimum
wage, 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. Changes in food security policies
New social measures
Jobs: Egypt, Tunisia, Morocco, Bahrain, Oman, Saudi Arabia, Algeria
(permanent hiring of temporary contractors, heavy recruitment in public
sector, 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. Scenarios definition – Benefits of deeper Arab Economic
Simulation exercise
Integration (Trade)
Work in progress
Scenarios:
sim4:sim3+ An Arab
Sim 1 (FTA): A full implementation of preference for
migration quotas in
intra-Arab FTA OPC
sim3: sim3+a
Sim2 (TR) =Sim1+ a 50% reduction of common external
tariffs (for non
intra-Arab transport costs agriculture products
Sim3 (CU) : Sim2+ a customs union for sim2: sim1+ 50%
reduction in
non agricultural products. The Common transport cost
external tariffs is supposed to be equal
to the minimum tariff applied by non oil
producing countries. Countries that have
a lower tariff are supposed to maintain sim1: A complete
Free trade Area
their current tariffs.
Sim4 (Migration): Sim3+the replacement
of 20% of non Arab migrant stock by
Arab migrants
Source: ESCWA 10

11. CFS Framework, 2012
New framework for the international community
• Components:
A. The Twin-Track Approach
B. Increasing smallholder-sensitive investments in agriculture
C. Addressing excessive food price volatility
D. Addressing gender issues in food security and nutrition
E. Increasing agricultural productivity and production in a socially, economically
and environmentally sustainable manner
F. Nutrition
G. Tenure of land, fisheries and forests
H. 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. Way forward
1. 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. Way Forward
2. Rethinking governance-control corruption/resource reallocation
Government Sector Budget
Inefficiency Leakages
Rent Capture/Misappr.
Corruption
Actual resource transferred
and utilized
13
Food Security

14. Way Forward
2. Rethinking governance - decentralization
Source: Global Forum for Reinventing Government, UN
2007

15. Way Forward
2. 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. Way forward
3. 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. 3. Enhance ownership and management of land
Targeted Countries
Governance deficit and land
deals in Arab Countries
Countries of Origin
Source: ILC, 2012.

18. Way forward
4. Reform Social Safety Net Programmes and Fiscal
Expenditures
 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. 4. Reform Social Safety Net Programmes and Fiscal
Expenditures
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. 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. Knowledge Gap
Transition 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. Knowledge Gap
Increased 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?