Review of Oil for Food in Journal of Peasant Studies

The Journal of Peasant Studies has published a review of Oil for Food by Max Ajl of Cornell University who approaches the topic from a critical world system view.

Ajl likes the historic parts and the analysis of agro lobbies and profit motivations behind food security strategies, but he would have liked to see much more categorical conclusions, which I am afraid I cannot give. There is no either/ or: Clientelistic lobbying geo-strategic considerations and genuine food security concerns are all part of the mix that I have encountered.

“Indeed, he could and should have stated much more clearly that food security is a discourse which is mobilized in the region and elsewhere for ends having little to do with securing food: namely, the distribution of state rents to social elites in ways which would otherwise be difficult to publicly justify. Still, it is to Woertz’s credit that he has done such a skilled job of amassing and synthesizing a tremendous pile of historical and contemporary evidence – even if, upon surveying it, the reader comes to far less ambivalent conclusions about the real interests behind notions of ‘food security’ in the Gulf than the author does himself.”

Commodities Trade in the Atlantic Space

I have just returned from the Atlantic Dialogues conference 2014 that has been organized by the German Marshall Fund and the OCP Policy Center.

In terms of food security issues it was quite interesting that considerable know-how transfer is taking place between Brazil and Sub-Saharan Africa and that Morocco tries to position itself as fertilizer provider of choice to both agricultural regions. (On this issue also see my recent article in Third World Quarterly about Mining Strategies in the MENA).

The Atlantic Dialogues conference is in its third year now and adds a south-south dimension to the notion of Atlantic Space. This year a conference volume has been published that can be downloaded here.

This chart in my article about the transatlantic trade in agricultural and mineral commodities highlights some interesting facts.

The following conclusions can be drawn for the transatlantic trade in commodities:

  • Mineral fuels dominate the global trade of commodities, the Atlantic Space is no exception.
  • No country in the word is energy independent. There is a varied trade of refined products besides the trade in mineral fuels. Some crude oil exporters like Nigeria, Angola, Mexico, and Brazil are net importers of such refined products. Net importers of crude oil like the United States and the EU, on the other hand, are net exporters of refined petroleum products.
  • China has developed into a major importer of mineral fuels, oil seeds, ores, and precious metals from Africa, Latin America and the Caribbean, and North America. Yet despite this widely publicized rise of China, the Atlantic trade in commodities is still a dominant factor in global comparison.
  • The transatlantic trade ties in commodities are particularly close between North America and LAC, on the one hand and between Europe and Africa on the other hand. Trading relations between North America and Africa and between the EU and LAC are also substantial. The focus of this North-South trade is on mineral fuels, ores, precious metals, oil seeds, and tropical agricultural products like cocoa, coffee, and fruit. There is not only a lively trade of refined products from North America and the EU to Africa and LAC, but also between the two northern blocs of the Atlantic Space.
  • In comparison, South-South trading relations lag behind in the Atlantic Space. However, because of its underdeveloped agricultural potential, Africa is a major importer of cereals and sugars, which partly come from LAC, and Morocco has developed into a major supplier of fertilizers to Brazil.

Good Article about Midroc, Al Amoudi’s Ethiopian Business Coglomerate

Romain Calvary has written a very interesting article about Midroc, Saudi billionaire Al Amoudi’s Ethiopian business conglomerate.

Les investissements saoudiens dans la Corne de l’Afrique : l’exemple de Mohamed Al Amoudi, homme d’affaires saoudien en Ethiopie” has been published in Confluences Méditerranée, 2014/3 (N° 90)

It contains an interesting description of his background as a son of a trader from the Hadramaut who migrated to Jeddah at the end of the 1940s, shortly after Al Amoudi was born in Ethiopia to his Ethiopian mother. Al Amoudi would only join his father in Jeddah in 1965, where he built his fortune in construction and the refining business.

From the 1990s onwards he built his Ethiopian business empire, which he merged in 1996 under the umbrella of Midroc. It is noteworthy that in 1990 he did not yet have Ethiopian citizenship according to the article.

Another interesting take home point is that as part of his participation in Ethiopian politics Al Amoudi takes positions that are rather unusual for a Saudi. He discreetly finances Ethiopian churches in the USA and has lent his support to the construction of the Ethiopian Millennium Dam, which is opposed by Egypt and Saudi Arabia.

In February 2013 the Saudi royal and  deputy defense minister Khalid Bin Sultan even went so far to say, “There are fingers messing with water resources of Sudan and Egypt which are rooted in the mind and body of Ethiopia. They do not forsake an opportunity to harm Arabs without taking advantage of it…”

How Long Will ISIS Last Economically?

A new CIDOB briefing note of mine deals with some food security issues in Iraq:

How Long Will ISIS Last Economically?

· ISIS is not a mere terror organization, but an insurgency that follows a classic “Clear, Hold, Build” strategy. The aim is state building as the very name ISIS suggests. Holding territory implies provision of services to the governed population such as food, energy and water.

· Oil is the most important revenue stream for ISIS followed by various forms of looting, local taxation, extortion and ransom. Not for nothing ISIS has been likened to a mafia gang. Foreign inflows have also played a role, but have not been as dominant as often assumed.

· Energy infrastructure cuts across territories. Rebels in control of oil and gas fields have sold energy to the Assad regime, which has been in control of the gas grid and power stations. ISIS has been no exception.

· Syria’s oil industry was already ailing before civil war erupted. The more lucrative fields in the south and north of Iraq on the other hand will likely remain out of ISIS’s control.

· Gulf donors have been described as “angel investors” for jihadist groups in Syria who provided the seed financing for their domestic operations. During 2012 and 2013 Gulf countries poured hundreds of millions into the Syrian civil war, often in competition with each other. While it is unlikely that Gulf governments have ever funded ISIS directly, it has benefitted indirectly from this spending spree when fighters who had originally been with other groups joined it and brought their experience and weapons with them.

· Iraq entertains the largest public food program in the world. The Public Distribution System absorbs about a fifth of government revenues and provides basic foodstuffs to more than half of the population in most provinces. ISIS regards dams and food distribution infrastructure like wheat silos as strategic assets. Like refineries and oil installations it has targeted them specifically and has taken a keen interest in taking them over intact.

· ISIS now controls up to 40% of Iraqi wheat production. However, half of Iraq’s wheat supplies are imports, so ISIS’s share of domestic production only is equivalent to about 20% of overall supplies.

· The economic base of ISIS is a Ponzi scheme of looting that is in constant need of expansion. Yet there are signs that expansion is becoming more arduous. The early easy phase of looting is over.