Food Security Situation in Iraq

This article by Hadi Fathallah for the Carnegie Endowment for International Peace offers interesting insights on the current food security situation in Iraq, based on reports by international organizations like the World Food Programme, Arabic and western press reports.

The wheat harvest in ISIS controlled territory has declined, in contrast to civil servant salaries, producer subsidies from the central government in Baghdad do not reach ISIS territory anymore. The government has not budgeted funds for procurement of wheat from ISIS areas in its 2015 budget. The coverage of the Public Distribution System for refugees in non-ISIS territory is limited.

Food imports will need to increase at a time when oil prices have declined and more spending is directed towards military and security issues. The food security situation in Iraq is about to get more critical.

The Myth of Climate and Water Wars in the MENA

El Pais, Spain’s largest daily newspaper, has published an article of mine about “The Myth of Climate and Water Wars in the Middle East“ (in Spanish).

Like our earlier article in Footnote1 it argues that water scarcity and climate change are  serious issues, but that primary reasons for unrest in the Middle East can be found in its political economy.

The climate and water war narratives might be intuitively appealing but they are not convincing in comparison. The environment is not an external category that would transform itself mechanically into sociopolitical outcomes.

Saudi Arabia and Bunge buy 50.1% Stake in former Canadian Wheat Board

This is quite big and exactly the kind of trade oriented investment in the value chains of developed agro markets that I have anticipated in the conclusion of Oil for Food.

Saudi government owned company SALIC teams up with international grain trader giant Bunge to buy a 50.1% stake in the former Canadian Wheat Board, which the Canadian government has now privatized. The other 49.9% will be owned by Canadian farmers.

SALIC was founded in 2012 in the wake of the King Abdullah Initiative for Agricultural Investments Abroad (KAISAIA).

I would expect more of this kind of investment rather than the widely publicized land investments in food insecure developing countries that have made media headlines, but have often not been implemented.

Martin Keulertz and I are dealing with the aspect of food trading companies and value chain investments in a forthcoming article in the fall issue of International Development Policy.

Economic Crisis of ISIS: Media Overview

The main thesis of my policy brief in October “How Long Will ISIS Last Economically” has been increasingly picked up in the media and think tank papers, i.e. that the ISIS economy is a “Ponzi scheme of looting” and far from self-sustaining.

Below you find a list of media articles that expand on this theme and have quoted my policy brief:

Slate Magazine ; BBC ; CNBC ; National Post ; Die Zeit ; Carnegie Endowment for International Peace ; Democracy Digest ; Jamestown Foundation ; Business Insider ; The Marshal Center ; Al Ahram Hebdo .

These articles also contain further interesting details, most notably the sequestration of houses of retired government personnel in Deir el- Zor (Al Hayat):

Washington Post ; Al Hayat ; Der Spiegel

The Water-Energy-Food Nexus in the Arab World and Financial Challenges

Martin Keulertz and I have published a new article in the International Journal of Water Resources Development: “Financial Challenges of the Nexus: Pathways for investment in water, energy and agriculture in the Arab world.”

Abstract:

The Water–Energy–Food (WEF) nexus is a development challenge in the Arab world,
particularly in the ‘core nexus countries’ with low to mid-incomes in which limited
water endowments permit agricultural production, such as Egypt, Morocco, Tunisia,
Lebanon, Algeria, Sudan and Jordan. The WEF nexus is often conceptualized in mere
technocratic terms, yet politics matter in the implementation of projects that address it.
Internalizing hydrological externalities or leaving them as they are and financing them
as a public good requires states whose capacities have been reduced as a result of
neoliberal reform. The article explores five different pathways of how Arab countries
could finance green growth projects ranging from regional financial markets to
concessionary loans by funds from oil rich Gulf countries.

Tropical Agriculture and MENA Food Imports: Conference Summary

TROPICAL AGRICULTURE AS “LAST FRONTIER”?

Food Import Needs of the Middle East and North Africa, Ecological Risks and New Dimensions of South-South Cooperation with Africa, Latin America and South-East Asia

Barcelona, 29-30 January 2015

The Middle East and North Africa (MENA) is one of the most water-stressed regions in the world and its largest net-importer of cereals. Affordable food imports are crucial for its future food security. Countries with tropical agriculture like Brazil are playing an increasing role in MENA food supplies. Apart from policy options to sustainably intensify regional agricultural production, trade will play a crucial role for MENA economies to achieve food security.

‪Given the environmental value and sensitivity of tropical ecosystems sustainable intensification in countries like Brazil, Sub-Saharan Africa and South-East Asia is crucial. For this reason, King’s College London (KCL), the OCP Policy Center, the Barcelona Centre for International Affairs (CIDOB), the Getulyo Vargas Foundation and Wageningen University organized a conference on Tropical Agriculture as ‘Last Frontier’? Food Import Needs of the Middle East and North Africa, Ecological Risks and New Dimensions of South-South Cooperation with Africa, Latin America and South-East Asia”.

The conference was held on 29-30 January 2015 at the Barcelona Center for International Affairs (CIDOB). It provided an interdisciplinary perspective on how …. (for more)

Update on Economic Issues of ISIS

Germany’s largest weekly Die Zeit has run a feature on the lack of economic sustainability of ISIS that has also been translated into English. It quotes my earlier policy brief of October: How Long Will ISIS Last Economically? and shares its conclusion that the ISIS economy is based on looting and far from self-sustaining.

Meanwhile the UN has estimated that ISIS had revenues from ransoms of $35-45 million in 2013. Revenues from such ransoms have likely decreased as I have argued, as Western journalists and aid workers have been deterred from traveling to the region and local hostages fetch lower prices.

The Die Zeit feature in fact points out that hostage taking has increasingly targeted the local population. Prices for local hostages ($20k-50k) are considerably below those for western hostages ($3-5mn).

In October David Cohen, under secretary for terrorism and financial intelligence at the US Treasury Department, estimated the ISIS income from oil at $1mn per day with a declining tendency. He also saw the revenues from ransoms reduced at $20 mn in 2014.

Cracks of ISIS’ Ponzi scheme of looting have already started to appear. Prices for meat, eggs and vegetables have doubled and tripled in some cases.  Defections of senior ISIS officials have been partly attributed to economic problems of the organization.

ISIS tried a publicity stunt when it announced its intention to introduce its own currency based on gold, silver and copper (sic) coins. Even if it managed to loot enough precious metals to issue such a currency it would likely face Gresham’s Law and the challenges of maintaining realistic exchange rates within a bimetallic currency, not to mention a tri-metallic one.

Yet ISIS is not the only organization with economic problems in Iraq: The government in Baghdad faces severe funding shortages as oil prices have declined while it needs to ramp up expenditure to rebuild its military capacities (if they ever existed given 50k “ghost soldiers” who only existed on payrolls).

The Iraqi government also continuously grapples with corruption: The Grain board chief was sacked because of a spoiled rice shipment, only to be replaced by his predecessor who took kick backs in 2009.