Economics of the Middle East

Lecture 5

Noha Nagi Elboghdadly

Faculty of Economic Studies and Political Science/Alexandria University

Second Semester 2019/20

Noha Nagi Elboghdadly Economics of the Middle East

Outline

Food Security in Middle East Countries

In this lecture, we will discuss:

Food security definition
Macro (National) Food Security.
Micro (Individual) Food Security.

Noha Nagi Elboghdadly Economics of the Middle East

Food Security Definition
The World Food Summit defined food security in terms of:
Availability. The supply side of food security, determined by
the level of production, stock levels and exchange. Weather,
yields, soil conditions and planting decisions can all affect
availability
Access. Economic and physical access to available food,
mainly from the household perspective. It is determined by
overall household income, disposable income for food and
food prices.
Utilisation. The way individuals are able to consume food,
which has a direct impact on nutritional status and is closely
linked to feeding practices, preparation and distribution of
food between household members.
Stability. The maintenance of food security through time –
while an individual or household may temporarily be
food-secure, outside shocks such as food price volatility or
unemployment may push them into food insecurity.
Noha Nagi Elboghdadly Economics of the Middle East
Food Security Dimentions

Noha Nagi Elboghdadly Economics of the Middle East

National vs Individual Food Security

When discussing the food security in the Middle East, it is

important to be aware that food security can be achieved at
two levels:
National (Macro) food security
when a nation has adequate food supplies to feed its
population, either via domestic production, food imports, food
aid or some combination of these. [Supply-side]
Individual (Micro) food security
Individual food security exists when all individuals in a country
have access to adequate food.[Demand Side]
National food security is necessary but not sufficient for
individual food security in that a nation may have adequate
national food supplies but they may not be accessible to all
individuals.

Noha Nagi Elboghdadly Economics of the Middle East

National Food Security

The ME region is often seen as one of the most food insecure

regions in the world based on
(1) the region’s heavy reliance on food imports and
(2) the fact that it has the largest food deficit of any region in
the world in terms of cereal imports as a proportion of
domestic consumption.
However, food imports are only one dimension of food
security. Other variables that help determine a country’s food
security status include foreign exchange earnings (e.g. total
exports and net remittances) and fiscal position. In the
following, we will consider fiscal position.

Noha Nagi Elboghdadly Economics of the Middle East

National Food Security

Macro food security is related to the fiscal position of a country.

The World Bank produces a taxonomy of countries according
to their resource endowments and fiscal balance.
Resource endowments determine a country’s cereal import
dependency.
Fiscal position reflects the ability of a country to afford food
imports as well as its vulnerability in terms of price risks and
quantity risks.
Exposure to food price and quantity risk is a function of
dependence on cereal imports and fiscal balances.
Price risk is the risk that cereal prices will be prohibitively
high, making purchase difficult even though quantity is
available on world markets.
Quantity risk is the risk of food not being available, even if
there are sufficient funds for purchase.

Noha Nagi Elboghdadly Economics of the Middle East

National Food Security
Cereal import dependency and fiscal deficits in the ME:

Noha Nagi Elboghdadly Economics of the Middle East

National Food Security

The figure shows that:

Although the GCC countries have high cereal import
dependency, they are fiscally in surplus due to their oil export
base. Hence they are not vulnerable to global food price
shocks – they can afford higher import prices – but they are
vulnerable to quantity risk such as trade embargo or export
bans by food exporting countries in times of shortage.
Egypt, and Syria face low quantity risk and high price risk.
Price risk is a problem because weak fiscal balances constrain
government financing options. Quantity risk is not as much of
a problem because these countries are less dependent on
imports.

Noha Nagi Elboghdadly Economics of the Middle East

National Food Security

Yemen, Jordan and Lebanon are most vulnerable to food-price

shocks because they face both high quantity and high price
risk. Price risk is a problem because weak fiscal balances
constrain government financing options. Quantity risk is a
problem because of high dependence on imports. These
countries may need external support in addressing food
security

Noha Nagi Elboghdadly Economics of the Middle East

Individual Food Security
At the micro level, individual food security depends on the
households’ purchasing power determined by income and
resources distribution.
One of the most widely used indicators of micro-level food
security is the Global Hunger Index (GHI). The GHI is a
multidimensional approach to measuring hunger. It combines
three equally weighted indicators:
(1) the proportion of undernourished as a percentage of the
population (reflecting the share of the population with
insufficient dietary energy intake).
(2) the prevalence of underweight in children younger than
five (indicating the proportion of children suffering from
weight loss).
(3) the mortality rate of children younger than five (partially
reflecting the fatal synergy between inadequate dietary intake
and unhealthy environments).
Noha Nagi Elboghdadly Economics of the Middle East
Individual Food Security

The GHI ranks countries on a 100-point scale, with 0 being

the best score (no hunger) and 100 being the worst.
Global Hunger Index 2019:
https://www.globalhungerindex.org/results.html
Saudi Arabia, Kuwait, Turkey and Iran → GHI: Low < 9.9.
Egypt, Lebanon, Jordan, Iraq, Oman→ GHI: Moderate
10.0–19.9.
Yemen → Alarming 35.0–49.9.

Noha Nagi Elboghdadly Economics of the Middle East

Individual Food Security and Poverty
At the micro level, food security can be seen as an economic
access problem, given the high correlation between poverty
and food insecurity.
Poverty prevents many households from improving their
nutrition and food security.
Across countries, poor people are the most food insecure as
they have limited resources to buy available food and face
challenges accessing safety nets.
Poor people are also most affected by food price spikes, and in
response often reduce overall food consumption, or consume
less nutritious foods.
The 2007-08 food price shock had a major impact on poverty
and food insecurity in the ME region. Estimates suggest
around 2.6 more million people entered into poverty and 4
million extra people became undernourished following the
crisis. For example, calculations suggest that a 30% increase in
food prices in Egypt would have resulted in a 12% point
increase in poverty.
Noha Nagi Elboghdadly Economics of the Middle East