Call For Papers: Africa, Latin America and the “Asian Century”

OCP Policy Center and CIDOB invite the submission of papers that explore Reconfiguration of the Global South: Africa, Latin America and the “Asian Century”.

The conference will be held in Barcelona on 27-29 January 2016. For the full call for papers click here.

Proposals should be submitted electronically to ewoertz@cidob.org and lilia.rizk@ocppc.ma no later than 30 October 2015.

Papers can deal with a broad based variety of topics that explore the mutual relationship and the positioning of the two continents in the emerging “Asian Century”, such as:

– Rise of emerging markets countries and what it means for an increasingly multilateral international system.
– New geopolitical constructions of the Global South: Asian vs. Western interests in Africa and Latin America.
– Theoretical approaches to democratization, transition and development.
– Trade and investment relations.
– Domestic growth strategies and development cooperation, particularly in infrastructure financing, energy, environmental preservation, agriculture and food security.
– Port cities and their role in facilitating exchange between the two continents.
– Maritime security and hard security issues.
– Free trade areas and regional association agreements.
– Migrant communities and cultural relations.
– Sustainable management of cities.

Reply to Thoughtful Review of Oil for Food in the Middle East Journal

Jane Harrigan has given a thoughtful critique of Oil for Food in the Middle East Journal, Vol. 68, Issue 1, 2014. She outlines the historical part with the critical supply situation during World War II, the food weapon, the modernization of agriculture in the postwar years and the political economy of food in the Gulf countries. While she deems these parts and the depiction of the failed Sudan breadbasket strategy “fascinating”, she objects to my  “sanguine” account of current Gulf agro-investments.

As I describe the Sudan breadbasket episode of the 1970s as an unmitigated disaster and use it as a cautionary tale for current Gulf endeavors this is not immediately obvious.

Harrigan acknowledges that I acknowledge important concerns in the land grab debate like the threat of disenfranchisement of customary land rights’ holders and limited employment benefits. However she would have liked to see a more extensive discussion of these aspects.

She objects in particular to my sub-chapter “A land grab that wasn’t“ in which I use field work in the Gulf countries and the Sudan to point out that there is a huge disconnect between media reports about land grabs and actual implementation on the ground. I further argue that such misconceptions have sometimes been amplified by well meaning reports of advocacy groups, among them the first version of the Land Matrix by the International Land Coalition (ILC) and a number of think tanks that has used such media reports as data source (p. 144f).

Harrigan does not discuss this criticism of mine or marshals evidence to the contrary. But she argues unperturbed that “ample evidence is now available, especially from the International Land Coalition’s work,” about the threat of foreign agro-investments.

I do not dispute this threat in qualitative terms and discuss it as far as it has materialized, like in Sudan in the 1970s, on some of the Sudanese projects today (e.g. the Merowe Dam) or on the Saudi Star project of Saudi billionaire Al-Amoudi in Ethiopia.

Yet in quantitative terms the threat has been exaggerated as I outline in said sub-chapter, certainly for the Gulf countries, but also for China as the works of Deborah Brautigam and Rural Modernity have shown.

So in a way Harrigan is blaming me for not parroting media reports. It would be better to either hold those accountable who have used them uncritically or show empirical evidence of Gulf agro-investments with said effects that I have failed to mention.

In fact, the ILC and its partners have revised the Land Matrix considerably in the meantime, have gotten rid of many paper projects and paint a more accurate picture now.

The problem of exaggerated quantitative claims and the need for more qualitative studies has recently also been highlighted  by Marc Edelman in a special issue of the Journal of Peasant Studies about methodological issues of land grab research.

In a way Harrigan seems to be uneasy about the “ample evidence” herself. At the end of her review she suggests that the implementation gap may well exist, but claims that negative effects would still occur in the form of preemptive displacements to empty land for investors.

In Ethiopia and on the earlier rainfed projects in Sudan this seems to have happened indeed as I write in Oil for Food; for the irrigation projects in the north of Sudan the situation is somewhat different. The land along the Nile is in private smallholder ownership and not targeted, while the land on the plateau above the river is formally state owned, barren and only usable for extensive pastoralism as long as no investments in irrigation infrastructure are undertaken.

To suggest a mere announcement or even a formal deal without actual investment would lead to an immediate displacement is rather unrealistic in such cases and tends to overrate coercive capacities and economic incentives on part of local governments. In fact in quite a few cases officials were unable to locate announced project sites and locals were not aware of them. In the cases where nothing is there, what am I supposed to write about?

Harrigan says that the US used the food weapon in retaliation to the formation of OPEC, which is not something that Oil for Food claims, as the height of the food weapon was in the 1970s not in 1960 and it was used or contemplated in retaliation to the Arab oil embargo, the Iranian hostage crisis, to rein in Nasser, to entice moderation in the Arab-Israeli conflict and push an already established OPEC to cooperate on global food issues during the World Food Conference 1974. But this is a minor thing.

To sum up, I fail to see how I portray an “unjustifiably rosy” picture of Gulf agro-investors as I discuss on multiple occasions their misguided belief in large scale project designs and their real estate centered mentality, which leads to an obsessive focus on formal land ownership and disinterest in joint equity projects with local stakeholders.

All I try to do is to give a differentiated picture and point out an implementation gap that has even grown since Oil for Food was written. Being “sanguine” is different. Land grabs in Africa seem to be bad business as the plummeting share price of Indian agro-investor Karuturi, the travails of Amoudi in Ethiopia or the Sudanese failures show.

Instead of claiming the counterfactual opposite, Oil for Food tries to find an explanation why so many projects have failed or have not been implemented in the first place. It also tries to consider the importance of local factors, domestic agro-investors and national development plans that outweigh the importance of foreign agro-investors and act in lockstep with them.

Coming back to Ethiopia, its government is equally frustrated, as it has hoped that foreign agro-investments would help kick off an agriculture led modernization. It now considers withdrawing concessions.

If any land investment were bad and threatened food security, these developments would mean an improvement. In the specific cases this might even be true, but overall there cannot be any doubt that more investments are needed given Africa’s declining food production per capita over the last decades.

Hence maybe the solution is somewhere in the middle. This might neither be in line with overtly romantic views of subsistence agriculture nor with hyperbolic profit expectations of 30 percent and more that are peddled by some investors, but a more realistic and sober approach in the land grab debate is needed.

The Ability to Pay: One Third of Iranians go Hungry

Sanctions and the resulting currency crisis, the Iranian riyal plunged more than half over the last year, affect food security in the country too.

Food accessibility is compromised for lower income households. About a third of Iranians have been cutting back their diet.Luxury products like dairy or chicken are consumed less.

The situation is exacerbated by neglect of the agricultural sector and recent droughts.

Like in Egypt, strained foreign exchange position affects the ability to import sufficient food at affordable prices.

The Ability to Pay: Egypytian Food Imports Threatened

As a result of its continuous currency crisis Egypt is facing problems in financing food and fuel imports. Lack of diesel for pumps and farming equipment in turn threatens domestic agricultural production.

The country is the world’s largest wheat importer, a dependency that has developed since the 1950s when Egypt started to import large quantities of P.L. 480 deliveries from the US as I describe in chapter 4 of Oil for Food.

This dependency is not to go away despite Egyptian efforts to increase self-sufficiency from currently around 60 percent. There is simply not enough land and water around. Ethiopia has already questioned the Nile waters accord of 1959 that grants Egypt three quarters of the flows.

Egypt is now amidst a demographic transition. Birth rates have been falling and the fertility rate, the average number of children per woman, stands at 2.64. However, it takes time until youth cohorts grow through a population pyramid.  Population will continue to grow to 124 million by 2050 and will only level out afterwards.

That means more food imports while Egypt faces growing problems financing them. It has turned into an oil net importer at the end of the 2000s. Natural gas exports face problems of their own due to underinvestment and sabotage of the pipeline to Israel and Jordan. In any case the rent component of natural gas production is much lower than for oil, even Qatar, the world’s largest LNG exporter receives the majority of its government revenues still from oil.

The problems of Syria are similar. Because of a lack of refining capacity its overall petroleum balance turned negative in monetary terms at the end of the 2000s. Dwindling crude oil exports did not earn as much foreign exchange as was needed to import refined products like gasoline. With the civil war and the EU import embargo against Syria this gap has grown.

Hence, the ultimate story of food security in the Middle East is not domestic agriculture, but economic diversification and the ability to pay for food imports. This is a daunting task given the current global financial crisis and the paltry track record of  the region’s countries in this field.

Gulf Food Inflation and Statistics

The GCC food retail sector is to hit $106 billion over the next five years according to a report by consultancy company AT Kearny.  Three quarters of this market are Saudi Arabia and the UAE alone.

The interesting snippet of information is that they see the food share of total consumer spending of $300 billion at 28 percent.

This would be pretty high. Not as high as in developing countries where this share is mostly between 40 and 60 percent, but higher than in OECD countries where its ranges mostly between 10 and 20 percent.

This was also the range that was mostly given in a survey by YouGov Siraj in 2007 (see on page 34). However, the survey revealed also that about ten percent spent between 30-50 percent and more on food. Additionally it might have had a sample bias as it was conducted over the internet with incentivized participants. As poor migrant workers often do not have internet access or are illiterate they might have been underrepresented due to sample bias.

The really deplorable thing is that we do not really know. Gulf statistics are not reliable and lack detail. The share of food in the general Consumer Price Index (CPI) is 26 percent in Saudi Arabia, 14.3 percent in the UAE, and 18 percent in Qatar and Kuwait.

New Saudi System for Food Monitoring

The Riyadh Chamber of Commerce and Industry (RCCI) has launched “a new sustainable food system to address the growing concern of food security and rising prices in the Kingdom.”

It will monitor the prices and the availability of strategically imrtant foo items and will be run togetehr with the King Abdullah Chair for Food Security at King Saud University (KSU).

Impact of Global Food Price Rise on the UAE

The recent rise in global food prices, particularly animal feed like corn and soybeans, impacts on the UAE, which has the highest pass-through of international prices in the GCC according to a Word Bank paper.

The UAE’s system of food price controls will come under pressure because of this. Either the government starts to give subsidies to retailers as it has already done with partly government owned Agthia, or retailers will withdraw certain items from sales should they perceive necessary cross-subsidies as excessive. A black market would develop.

Downward Sticky Food Prices and Saudi Price Monitoring

The King Abdullah Chair for Food Security at the King Saud University in Riyadh will monitor local food prices and compare them with global market developments.

The concerns tie into a World Bank study that found that despite extensive subsidy regimes there is considerable pass through of global food price increases in Saudi Arabia and elsewhere in the Gulf.

Yet if global food prices come down, local prices do not follow suit. They are downward sticky, which is often blamed on profiteering and collusion of traders.