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A report from The Economist Intelligence Unit

Food security in focus:

Middle East & North Africa 2014

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© The Economist Intelligence Unit Limited 20141

Food security in focus: Middle East & North Africa 2014

Food security in focus: Middle East & North Africa 2014 is an Economist Intelligence Unit (EIU) report commissioned by DuPont. The report discusses the major findings in the 2014 Global Food Security Index (GFSI) for the 12 countries of the Middle East & North Africa included in the index.

About the GFSI The GFSI considers the core issues of affordability, availability, and quality & safety across a set of 109 countries. The index is a dynamic quantitative and qualitative benchmarking model, constructed from 28 unique indicators, that measures the drivers of food security across both developed and developing countries. Food security is defined as the state in which people at all times have physical, social and economic access to sufficient and nutritious food that meets their dietary needs for a healthy and active life, based on the definition established at the 1996 World Food Summit. The overall goal of the study is to assess the vulnerability of food systems to security and insecurity by looking at drivers of the Affordability, Availability, and Quality & Safety of food. The 2014 GFSI is the third annual index in this series.

Acknowledgements

Lucy Hurst, associate director of custom research for the Americas, was the project director. Joshua Grundleger, analyst, was the project manager. Katherine Stewart, research associate, was the editor of the Food security in focus series. Martin Vieiro, analyst, provided research and analytical support. Leo Abruzzese, global forecasting director and global director of public policy, served as senior adviser. William Shallcross designed and constructed the benchmarking model, and Mike Kenny was responsible for layout and design. Robert Powell, global manager, risk briefing and senior editor/economist for the Middle East & North Africa, provided regional expertise.

PrefaceContents

A regional analysis of food security 2

Regional results and comparisons 3

Food security in Middle East & North Africa 6

The countries of Middle East & North Africac 9

Appendix 12



The Food security in focus regional reports identify both similarities and differences between countries in each region and highlight regional areas of strength and weakness, providing regional analysis and context to the results in the 2014 GFSI.

Food security is a complex and nuanced issue, which can be analysed through many viewpoints and from many geographical perspectives—national, regional and global. To facilitate greater insight into the primary elements of global food security, and to develop a common standard against which all countries and regions can be measured, The Economist Intelligence Unit (EIU) created the Global Food Security Index (GFSI). The index is a tool to be used by a wide range of organisations and individuals working to address food security and the smooth functioning of food systems at a variety of levels. Some of the major elements of food security and, in particular, the deficiencies that may lead to greater food insecurity, differ across the globe. The regional reports seek to facilitate a deeper analysis of food

security through a unique lens. Specifically, these reports seek to:

l Examine regional challenges, strengths and issues surrounding food security to gain greater insight into the study’s measures.

l Provide a point of comparison between the regions to understand the dynamics of food security and the mechanisms that may be employed to address the unique issues that are experienced within a region.

l Explore the role of regional commonalities—countries within a region tend to have similar environments, problems, solutions and, in some cases, may share common institutions.

l Create more accurate country comparisons and a more nuanced understanding of food security by narrowing the frame of analysis.

l Offer insight into the economic, political and social context of the results of the 2014 GFSI.

A regional analysis of food security



OverviewOn a regional level, structural elements, which are generally more similar within regions than across the globe, tend to play an extremely important role in determining food security. Also, in regions that include countries with different economic systems, policy environments, agricultural infrastructures and nutritional standards, the gap in food security between best and worst performers is wider. These structural elements tend to change little year on year; however, when changes do occur, they have a greater impact on food security than other factors explored in the index.

l Economic development has the largest impact on food security, as shown by the strong correlation between food affordability and food security. The top performers in the index are rich countries with developed economies; these tend

Regional results and comparisons

Ranking/score table of all regions

Overall Rank Region 2014 GFSI Score

1 North America 80.0

2 Europe 75.4

3 Middle East and North Africa 57.4

4 Central and South America 56.0

5 Asia and Pacific 55.0

6 Sub-Saharan Africa 36.1

to have relatively high levels of GDP per capita and low shares of household expenditure on food. Although emerging economies are experiencing rapid GDP growth, resulting in increased Affordability scores and greater urban absorption capacity, the gap between developed and developing countries is still great.

l The most food-secure countries also tend to have developed infrastructures, including advanced agricultural infrastructures and facilities and systems that support agricultural investment and research and development (R&D). Transport infrastructure, including road and port systems, and adequate crop storage facilities drive food availability and are underdeveloped and undersupplied across food-insecure countries owing to underinvestment.



l A stable, efficient and functional policy environment is crucial for food security. More food-insecure regions, as well as countries, frequently have higher political stability risk and corruption levels, alongside weaker institutions that fail to provide appropriate government regulation and oversight. By contrast, the more food-secure regions have robust policy environments that facilitate food accessibility through stable supply chains, and affordability through food safety-net programmes.

l Nutrition plays an important role in determining food security. Highly food-secure countries have diversified diets and a high quality of protein. Their diets contain a high level of micronutrients, including iron and vitamin A. More food-insecure countries are often deprived of nutritious diets and lack organisations that regulate nutritional standards.

Regional results

North America and Europe, which collectively encompass 29 of the 109 countries in the index, recorded the strongest performances in the GFSI, driven by the developed countries’ dominance of those regions.

l As two regions comprised primarily of rich countries, Europe and North America have high levels of GDP per capita at an average of US$32,462 measured in terms of purchasing power parity (PPP), compared with an average of US$9,900 at PPP in the other four regions, while an average of 17.7% of household expenditure goes on food—just over half the global average of 34.5%.

l Wealth corresponds with high sufficiency of food supply, developed agricultural infrastructure, strong diet diversification, relatively low political stability risk and low corruption levels (Ukraine and Russia are exceptions). These factors contribute to North America’s and Europe’s first and second place rankings respectively in the overall index and in each of the categories.

Availability

Rank Region Score


2 Europe 69.8





Affordability

Rank Region Score


2 Europe 80.3







The next three highest-ranked regions—the Middle East & North Africa (MENA), Central & South America and Asia & Pacific—together account for 52 countries in the index. They all fall within a range of 2.4 points and share several common factors:

l They are comprised of a mixture of developed and developing countries that vary in terms of economic and political structures.

l MENA’s strong Affordability score (third overall), which is 2.3 points ahead of Central & South America, and its third-place tie in Quality & Safety with Central & South America account for its overall third-place regional rank in the index.

l Asia & Pacific’s comparatively high percentage of the population under the global poverty line and low diet diversification explain its lower scores in the Affordability and Quality & Safety categories.

Sub-Saharan Africa (SSA) has the lowest regional score in the 2014 GFSI, with an overall score that is just two-thirds that of the Asia & Pacific region.

l It also scores the lowest in each of the Affordability, Availability and Quality & Safety categories, owing to the large percentage of low-income countries in the region; of the 28 countries included in the region, 18 are low-income, according to World Bank income classifications.

l Low agricultural import tariffs and commitment to agricultural research and development, while still weak, are areas of relative strength in comparison with select regions, but underdeveloped agricultural infrastructure, low income levels and poor diet diversification drive the region’s poor results.

Quality & Safety

Rank Region Score


2 Europe 78.9

=3 Central and South America 59.5

=3 Middle East and North Africa 59.5





The countries that comprise the Middle East & North Africa (MENA) region in the GFSI are extremely diversified both in terms of food supply and consumption. Several states, including Turkey, Morocco and Israel, are major food exporters and self-sufficient in most, albeit not all, agricultural products. Conversely, the arid Gulf Arab states are, unsurprisingly, heavily dependent on food imports, and their governments are therefore primarily focused on ringfencing supplies from abroad, while simultaneously expanding food storage capacities domestically. Similarly, wealth levels vary enormously across MENA, with GDP per head at purchasing power parity (PPP) rates ranging from a high of over US$54,700 in the UAE to just

US$2,500 in Yemen.However, in recent years a new dynamic has

affected the food security situation across the region, as political uncertainty, and in some cases violence, has spiralled in the wake of the Arab Spring and its fallout. The countries that were worst affected, such as Egypt, Yemen and especially Syria, have periodically seen soaring food prices (food and beverage inflation reached close to 150% year on year in Syria in October 2013, for example), intermittent disruptions to supplies, and a rising reliance on international aid. Even those countries that have largely avoided violence, such as Tunisia, have suffered increased political instability and uncertainty, sapping consumer and

Food security in the Middle East & North Africa

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Syria Food price inflationJan 2005=100

Source: Economist Intelligence Unit; FAO.



investor confidence and, more broadly, hindering economic development.

Against this backdrop, it is not surprising that MENA witnessed the second-smallest improvement (behind Central & South America) in its food security score in 2014 compared with 2013, putting it further behind North America and Europe, although it continues to rank third-highest overall.

Regional highlightsMENA has, on the whole, seen a strengthening of its position over the past year, with eight countries experiencing an improvement in their score, compared with just four that witnessed a deterioration. Broad trends are difficult to discern given the widely differing economic and political situations of the countries in the region, but the biggest net gains were evident in the Affordability category. This change primarily reflected a decline in food consumption as a share of household expenditure—a key measure of vulnerability—as lower food prices globally, assisted by the trend of reduced agricultural tariffs across the region, helped to bring down food costs. However, the improvement was restrained to a degree by lower levels of real GDP per head compared with a year earlier—only Israel and Saudi Arabia saw an increase—as war, revolution and continued weakness in the euro zone (a key market for North African and Turkish exporters) continued to hinder the overall economic performance.

The region had a more mixed performance in the Availability category, with only Saudi Arabia, and to a lesser extent Kuwait and Israel, strengthening markedly. In the case of Saudi Arabia and Kuwait, however, this largely reflected less volatility in their agricultural output stemming from their smaller agricultural sectors (in recent years both have focused more on investing in agricultural businesses overseas, at the expense of domestic production). In contrast, Tunisia saw a steep deterioration in its agricultural volatility score, as poor rainfall led to a 30% decline in its grain harvest.

The most consistent declines were, however,

confined to the Quality & Safety category, where seven countries saw a worsening of their score. Although Yemen was an exception—its score improved markedly as the easing of the country’s political crisis allowed food safety nets to be rebuilt and nutritional standards to improve—in general the Gulf peninsula states continue to suffer from undiversified diets and low protein quality.

Regional strengths: Oil and the welfare stateMENA generally outperforms in a number of areas, with especially widespread social safety nets owing to the extensive (and expensive) subsidy and welfare systems governments often make available for their populations. This process has only been encouraged by the Arab Spring, which led many governments in the region to boost fiscal spending in an attempt to forestall unrest (although some countries are now beginning to reverse these policies given the unsustainable impact on their finances). The deep social safety nets also contribute to relatively low poverty levels, although Yemen, the poorest country in the region, remains an outlier in this regard, with some 46.6% of its population below the global poverty line.

Although generally lower this year, per-capita GDP levels are also above all the other regions bar Europe and North America. This largely stems from the high oil price of recent years, which boosted the incomes of the region’s large oil exporters. The strong performance of many of the region’s oil exporters also had a positive knock-on effect on their near neighbours, with Turkish and Jordanian exporters, for example, benefiting.

The prevalence of vegetable-based dishes, such as tabouleh, hummus and falafel, means that the region scores better in terms of dietary availability of vegetal iron than any other region with the exception of Sub-Saharan African. However, it is important to note that a strong score in this regard can be counterintuitive: vegetable-based diets tend to be prevalent in poorer countries, while richer, more food-secure populations consume far greater quantities of meat.



Regional weaknesses: Poor irrigation and political irritationThe region continues to lag on a variety of sometimes interconnected measures. For example, expenditure on agricultural research and development (R&D) is typically low across the region (with the exception of Israel and to a lesser extent Turkey), which in turn contributes to the fact that the region scores worse than any other region in the volatility of agricultural production indicator. The paucity of sophisticated irrigation techniques means that harvests tend to fluctuate in line with the ever unreliable rainfall (a particular problem for Tunisia, for which 2013 was

an especially dry year). Similarly, the war in Syria has continued to depress this score, as agricultural output has been seriously disrupted amid the violence.

Syria’s civil war also highlights the region’s weakness in the political risk category more generally—a direct outcome of the Arab Spring. The revolutions that swept MENA in 2011 were largely a consequence of the inherent failings of some of the region’s anachronistic tribal monarchies and military-style dictatorships. The associated lack of accountability has contributed to the region’s poor score for corruption, although, aware of popular discontent, there are now concerted efforts under way to tackle the issue.

Volatility of agricultural production, Middle East & North AfricaStandard deviation

Source: Economist Intelligence Unit

Morocco Tunisia United Arab

Emirates

Algeria Kuwait Regional average

Jordan Syria Yemen Saudi Arabia

Israel Turkey Egypt0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35Average volatility of agricultural production for all countries in GFSI



The countries of the Middle East & North Africa

Despite being a broad and varied region, the Middle East & North Africa can roughly be split into three distinct geographical areas: the Gulf Arab peninsula (with the exception of Yemen), the Levant and its environs, and North Africa.

l Unsurprisingly, the wealthy states of the Gulf Co-operation Council (GCC, which in the GFSI includes Kuwait, Saudi Arabia and the UAE) of the Gulf Arab peninsula score especially well, reflecting extensive social safety nets, high levels of GDP per head, low agricultural tariffs and better agricultural infrastructure. Nutritional standards, however, are less impressive, albeit improving, and unsurprisingly, agricultural R&D spending is among the lowest in the region owing to the

minimal agricultural sectors of these countries outside of dairy (owing to the GCC states’ climates and oversized oil sectors).

l Israel generally matches many of the GCC’s stronger scores in GDP per head levels and infrastructure and actually outperforms them in several areas, including sufficiency of supply (agriculture has been viewed as a priority sector since Israel’s inception), agricultural R&D, diet diversification and political stability risk.

l The Levant states, meanwhile—which include Jordan, Syria and Turkey—share several trends, including higher spending on agricultural R&D, slightly lower GDP per head and less extensive food safety networks than in the GCC. However,

Political stability risk, Middle East & North Africa2014 score, 0-100 where 100=best

*Syria had a score of 0 in 2014. Source: Economist Intelligence Unit, Risk Briefing

Israel United Arab

Emirates

Saudi Arabia

Turkey Algeria Kuwait Morocco Tunisia Egypt Jordan Yemen Syria*0

10

20

30

40

50

60



Syria is something of an outlier, given that food security in what was once one of the region’s major agricultural exporters has been severely undermined by the country’s three-year civil war.

l The North African states tend to score most poorly among the MENA states included in the index. They generally have lower levels of GDP per head than the Levant and GCC states, inferior agricultural infrastructures, restricted access to potable water and very high agricultural tariffs (a consequence of their larger domestic agricultural sectors and a trait that they share with the Levant states, notably Turkey). Several of the North African states have also been directly affected by the Arab Spring and its fallout, which has especially undermined Egypt’s score over the past year.

l Finally, Yemen arguably stands on its own in the index. Coming at the bottom in the regional rankings, the country suffers from a combination of shortcomings, including high levels of poverty, serious political instability, insufficient food supplies (the UN classifies some 45% of its population as being food insecure) and low micronutrient availability. Country highlights.

There is a broad correlation in the model between GDP per head (at PPP rates) and food security. Notably, the top five countries in the region (Israel, Kuwait, the UAE, Saudi Arabia and Turkey) all have the highest incomes per head. However, the link is not uniform: for example, Israel is ranked ahead of Kuwait and the UAE, despite the fact that its GDP per head is lower. This discrepancy stems from a host of other factors that are in Israel’s favour, such as more diversified diets, a higher micronutrient intake and better protein quality. Nevertheless, given their undersized agricultural sectors, the wealthy Gulf Arab states have clearly managed to cope well with the challenges posed by their rapidly growing and increasingly urbanised populations. (Indeed, Saudi

Arabia is viewed as having a better urban absorption capacity than Israel.) In this regard, the enormous investments the Gulf states have made in recent years in crop storage facilities—a programme begun in earnest after the dramatic global food price spike in 2008—have buttressed their agricultural infrastructure scores. The UAE, for example, claims that its grain storage expansion currently under way will allow it to house sufficient grain to meet domestic demand for a year.

Food security successesIt is Saudi Arabia that has seen the greatest improvement in its score this year. This predominately reflects a steep increase in its nutritional standards score, after the government launched a series of initiatives aimed at improving the population’s diets in response to the country’s diabetes epidemic. Concurrently, the deepening role of the Saudi National Anti-Corruption Commission, which was set up in 2011, has helped to drive the overall improvement in score.

Although it has continued to lag in the rankings, Yemen also saw a significant strengthening in its overall score, reflecting an easing of its political and security crisis in 2013. These better security conditions allowed businesses to revive and poverty rates to decline, in addition to enabling the rebuilding of social safety nets. This improvement was assisted by the growing role of non-governmental agencies in providing welfare support (a factor that also drove an improvement in Syria’s score in this category). Although less significant, the growing presence of food safety nets also contributed to the relatively hefty score increase in Algeria, which additionally benefited from a good harvest in 2013.

Food security challengesDespite year-on-year score improvements, Yemen remains firmly rooted to the bottom of the regional table, reflecting the problems it confronts in feeding its rapidly growing population amid worsening water shortages, the depletion of its oil reserves (which provide the bulk of its export and



fiscal earnings), and the unstable political and security climate. Similarly, three years of crisis and war in Syria have unsurprisingly taken their toll: at one time Syria was a major food exporter (it exported some US$1bn of foodstuffs at its peak in 2007), yet the World Food Programme now estimates that it will need to supply 6.4m Syrians with emergency food aid during 2014. The country’s problems are also affecting its neighbours, with Jordan struggling to cope with the influx of almost 600,000 Syrian refugees and the loss of one of its major food suppliers—both factors that explain the drop in its overall score this year.

In terms of those countries that witnessed the largest deterioration in score over the past year, the fallout from the Arab Spring continued to take

its toll on Tunisia and especially Egypt—both of which witnessed rising instability in 2013. Although a new political transition deal in Tunisia signed in January 2014 offers room for optimism, the situation in Egypt, which saw the biggest decline in score across the region, remains highly volatile. In particular, continued economic stagnation and a weakening Egyptian pound contributed to sharply higher food prices during the year (despite lower food costs globally), which in turn hit its score for food consumption as a share of household expenditure. In Tunisia, meanwhile, notwithstanding its political machinations, the country also experienced a poor harvest, with grain production down by 30% (a factor that contributed to its lower score in the volatility of agricultural production sub-category).

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Appendix

Asia & Pacific Central & South America

Europe Middle East & North Africa

North America Sub-Saharan Africa

Australia Argentina Austria Algeria Canada Angola

Azerbaijan Bolivia Belarus Egypt Mexico Benin

Bangladesh Brazil Belgium Israel United States Botswana

Cambodia Chile Bulgaria Jordan Burkina Faso

China Colombia Czech Republic Kuwait Burundi

India Costa Rica Denmark Morocco Cameroon

Indonesia Dominican Republic Finland Saudi Arabia Chad

Japan Ecuador France Syria Congo (Dem. Rep.)

Kazakhstan El Salvador Germany Tunisia Côte d’Ivoire

Malaysia Guatemala Greece Turkey Ethiopia

Myanmar Haiti Hungary United Arab Emirates Ghana

Nepal Honduras Ireland Yemen Guinea

New Zealand Nicaragua Italy Kenya

Pakistan Panama Netherlands Madagascar

Philippines Paraguay Norway Malawi

Singapore Peru Poland Mali

South Korea Uruguay Portugal Mozambique

Sri Lanka Venezuela Romania Niger

Tajikistan Russia Nigeria

Thailand Serbia Rwanda

Uzbekistan Slovakia Senegal

Vietnam Spain Sierra Leone

Sweden South Africa

Switzerland Sudan

Ukraine Tanzania

United Kingdom Togo

Uganda

Zambia

Country selection table



Appendix These tables list the rankings and scores for the Middle East & North Africa in the overall index and across the three categories (Affordability, Availability and Quality & Safety).

Overall Ranking Affordability

Overall Rank Country Score Rank Country Score

1 Israel 80.6 1 United Arab Emirates 87.2

2 Kuwait 72.2 2 Israel 83.3

3 United Arab Emirates 70.9 3 Kuwait 83.1

4 Saudi Arabia 69.6 4 Saudi Arabia 76.1

5 Turkey 63.8 5 Turkey 62.5

6 Tunisia 55.7 6 Tunisia 56.1

7 Jordan 53.0 7 Jordan 53.8

8 Morocco 50.1 8 Morocco 49.5

9 Egypt 49.3 9 Algeria 46.6

10 Algeria 47.5 10 Syria 39.6

11 Syria 40.3 11 Egypt 35.7

12 Yemen 35.2 12 Yemen 35.5

Availability Quality & Safety

Rank Country Score Rank Country Score

1 Israel 75.4 1 Israel 88.5

2 Saudi Arabia 65.7 2 Kuwait 75.3

3 Turkey 63.9 3 United Arab Emirates 73.2

4 Kuwait 61.2 4 Turkey 67.1

5 Egypt 59.6 5 Saudi Arabia 64.4

6 United Arab Emirates 55.2 6 Tunisia 62.0

7 Tunisia 53.1 7 Egypt 55.1

8 Jordan 52.8 8 Jordan 51.3

9 Morocco 50.4 9 Morocco 51.1

10 Algeria 48.3 10 Algeria 47.7

11 Syria 39.0 11 Syria 45.5

12 Yemen 35.7 12 Yemen 32.7



Appendix These tables list the year-on-year score changes, 2014 v 2013, for the Middle East & North Africa in the overall index and across the three categories (Affordability, Availability and Quality & Safety).

Overall Ranking Affordability

Country Y-o-Y change Country Y-o-Y change

Saudi Arabia 2.5 Algeria 4.2

Yemen 2.4 Yemen 3.8

Algeria 1.6 Tunisia 3.6

Turkey 1.5 Syria 3.5

Syria 1.3 Turkey 3.2

Israel 1.2 Israel 0.8

Kuwait 0.8 Saudi Arabia 0.0

United Arab Emirates 0.2 Jordan -0.1

Jordan -0.2 Kuwait -0.2

Morocco -0.4 United Arab Emirates -0.3

Tunisia -2.9 Morocco -0.5

Egypt -2.9 Egypt -5.3

Availability Quality & Safety

Country Y-o-Y change Country Y-o-Y change

Saudi Arabia 4.8 Yemen 8.4

Israel 2.1 Saudi Arabia 2.8

Kuwait 2.1 Algeria 0.5

United Arab Emirates 0.8 Turkey 0.1

Turkey 0.7 Israel 0.0

Syria 0.0 United Arab Emirates -0.1

Morocco -0.1 Kuwait -0.2

Jordan -0.3 Jordan -0.7

Algeria -0.3 Syria -0.7

Yemen -1.2 Tunisia -0.9

Egypt -1.3 Egypt -0.9

Tunisia -9.6 Morocco -1.1



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