Beyond the Arab Spring

Improving Food Security and Resilience to Conflict

28th International Conference of Agricultural Economists

Rafain Convention Center, Foz do Iguaçu, Brazil

August 18-24, 2012

The ‘Arab Spring’ and After Dec. 2010: Self-immolation of a young

vegetable vendor in Tunisia Spring 2011: Protests in the quest for

more freedom, dignity and justice in several Arab countries

2012: Four longstanding autocratic leaders (Egypt, Libya, Tunisia, Yemen) have been ousted after varying degrees of violent turmoil.

Causes of the unrests run deep and have accumulated over time.A combination of political, sociological and economic factors triggered the uprisings.

Key economic factors include growing unemployment (especially among the population aged 25-39), rising inequality and high food insecurity.

Outline of the SessionObjective:Initiate and inform the debate on key challenges and opportunities for achieving food security and preventing conflict across the Arab World.

Presentations:1. Policies and Investments for Poverty Reduction and Food Security

—by Perrihan Al-Riffai2. Does Food Security Matter for Transition in Arab Countries?—by

Jean-Francois Maystadt3. Growth and Food Security Impacts of Yemen’s Uprising and

Scenarios for Transition—by Olivier Ecker

Policies and Investments for Poverty Reduction and Food Security in the Arab World

C. Breisinger, O. Ecker, P. Al-Riffai and B. Yu

Growth, Poverty and Food Security

Economic growth does not trickle down to the poor in Arab countries as much as it does in the rest of the world

Government spending as a share of GDP is the highest in the region among all world regions, but, does not translate into spending effectiveness and efficiency

Poverty–food security nexus one of the key development challenges facing Arab countries

Macro and micro food security present a serious challenge for the region

GDP Growth, Incidence of Poverty and Child Undernutrition

Source: Breisinger C., O. Ecker, P. Al-Riffai and B. Yu. 2012. Beyond the Arab Awakening: Policies and Investments for Poverty Reduction and Food Security. IFPRI Food Policy Report. Washington, DC: International Food Policy Research Institute.

Macro and Micro Level Food Security

Source: Breisinger C., O. Ecker, P. Al-Riffai and B. Yu. 2012. Beyond the Arab Awakening: Policies and Investments for Poverty Reduction and Food Security. IFPRI Food Policy Report. Washington, DC: International Food Policy Research Institute.

Macro Food Insecurity

Source: Breisinger C., O. Ecker, P. Al-Riffai and B. Yu. 2012. Beyond the Arab Awakening: Policies and Investments for Poverty Reduction and Food Security. IFPRI Food Policy Report. Washington, DC: International Food Policy Research Institute.

Micro Food Insecurity

Source: Breisinger C., O. Ecker, P. Al-Riffai and B. Yu. 2012. Beyond the Arab Awakening: Policies and Investments for Poverty Reduction and Food Security. IFPRI Food Policy Report. Washington, DC: International Food Policy Research Institute.

Selected Policies for a Food Secure Arab World

For countries with micro level food insecurity, focus on supporting job creating growth for the poor and improving social servicesGrowth led by the manufacturing rather than the agricultural sector is pro-poor and is associated with reducing child undernutrition

For countries with macro-level food insecurity, encourage exports to finance food imports and the agricultural sector in countries with potentialAgriculture to play important role in poverty reduction in countries with large agricultural potential as agriculture continues to serve as a social safety net sector especially in times of crisis

While these selected policies apply for many Arab countries, strategies and investments have

to be country-owned and adopted to country and sub-national levels.

Does Food Security Matterfor Transition in Arab Countries?

J.-F. Maystadt, J.-F. Trinh Tan and C. Breisinger

“How is it that countries in the Middle East and North Africa could face explosions of popular grievances despite, in some cases,

sustained high growth and improvement in social indicators?” (World Development Report 2011 on Conflict, Security and Development)

Conflicts in the Arab World

The Arab World at a Crossroad

• “Power vacuum” : Particularly at risk• But no determinism … also opportunities

Major causes of conflicts and which preventive measures?How best to accompany such

political transition?

Arab Exceptionalism?Collier and Hoeffler 2004 (CH04) • ‘Opportunity’ (per capita income, economic growth) matters, not

‘Motivation’ (‘grievance’)

Sorli et al. (2005) : 1960-2000• No MENA specific effect : “Conflict is quite well explained by a

general model of civil war” (p.160)

Shortcomings:• Reduced sample of countries (excl. e.g. Mauritania, Djibouti, Somalia,

Sudan) • No Fixed Effect (Djankov and Reynal-Querol, forthcoming REStat)• Predictive power 30% lower compared to SSA• Replication with updated data points to “Arab Exceptionalism”

Main Empirical Model𝑃 (𝑐𝑜𝑛𝑓𝑙𝑖𝑐𝑡 𝑖 ,𝑡)=𝑐+𝛼𝑖+𝜙𝑡+𝜂 𝑋 𝑖 ,𝑡− 1+𝜑 𝑋 𝑖𝑡 −1∗ 𝐴𝑟𝑎𝑏+𝜀𝑖 ,𝑡

Economic growth is the only robust finding in CH(04) Arab exceptionalism is confirmed!

Where the growth is coming from? (‘Opportunity’) Sectoral growth, Youth bulges Better proxy for natural resource dependency (e.g. oil)

Where the growth is going to? (‘Motivation’) Inequality Micro and Macro Food Security Indicators, given high

food import dependency Political dimension? (‘Polity’)

Beyond Collier-Hoeffler FrameworkRegressions (1) (2) (3) (4) (5)

Dependent variable

Model

GDP growth (t-1) -3.757*** -6.259*** -3.539* -4.644*** -8.644***

[0.980] [1.429] [1.877] [1.85] [1.850]

GDP growth (t-1)*Arab+ 5.919*** 4.409 3.056 3.056

[1.978] [2.784] [4.091] [4.091]

Child stunting (t-1) 0.0522**

[0.0233]

Child stunting (t-1)* Arab+ 0.307***

[0.0992]

Child mortality (t-1) -0.001

[0.003]

Child mortality (t-1)* Arab+ 0.001

[0.006]

Food Insecurity Index (t-1) -0.0107*

[0.00566]

Food Insecurity index (t-1)* Arab+ 0.0294**

[0.0125]

Time dummies incl. incl. incl. incl. incl.

Country Fixed Effects incl. incl. incl. incl. incl.

Observations 1,474 1,474 630 412 1,219

Incidence of major intrastate conflict

Logit fixed effect

Other Correlates ‘Motivation’ : Gini coefficient is uncorrelated to conflicts but

known to poorly capture time-varying sources of grievances ‘Opportunity’

Sectoral growth does not matter Youth bulges (share of urban male aged 15-24 over the

urban (or male) population aged > 15) : Positive relationship Oil, gas, ores and minerals exports to GDP or dependency

(>40%) . Oil dependency increases conflict at a global level but has the opposite effect in the Arab world

‘Polity’ Economic and political discrimination against minorities

increase conflicts but not specifically for Arab countries Past transitions to full democracy and autocracy reduce the

risk of conflicts but not in a stronger way in the Arab world

The Arab Food Security Channel

For the sample restricted to the Arab world, 2SLS-FE model points to the vulnerability of food net importers to changes in food international prices or food insecurity and in turn, to the risk of conflict

Where = Macro or Micro Food Security Indicators (beef, maize, rice and wheat)et food imports = Past economic growth and peace duration

The high dependence on food imports, combined with high and volatile world market prices, argued to be one factor contributing to the Arab Awakening (Zurayk 2011; Harrigan 2012, The Economist 2012)

The Arab Food Security ChannelRegression (2) (4) (6) (8)

Dependent variable

Model

Peace duration 0.003 -0.0099*** -0.005*** -0.005***[0.006] [0.003] [0.002] [0.002]

GDP growth (t-1) 0.196 -0.312 -0.178 -0.184[0.213] [0.283] [0.163] [0.195]

Child stunting 0.0420***[0.016]

Child mortality 0.011***[0.004]

Macro Food 0.011***Insecurity [0.004]Macro Food 0.013**Insecurity [0.006] incl. remittances

Country Fixed Effects incl. incl. incl. incl.Time dummies incl. incl. incl. incl.Observations 433 246 685 685Number of countries 22 22 22 22F-test 2.731** 4.603*** 5.335*** 4.484***Underid test 15.23*** 13.76*** 17.14*** 8.819**P-value Hansen test 0.52 0.24 0.66 0.46F-test on excl. IV 10.83*** 6.85*** 7.74*** 3.99**Root MSE 0.25 0.26 0.24 0.26

Incidence of major intra-state conflicts

FE2SLS

Conclusions1) Transition to democracy is welcomed but the transition

period is risky2) Food insecurity matters for conflicts in the Arab world

Limitations:1. Not a paper on the Arab Awakening : only valid for major

conflict events• Need to understand the dynamics of public protests and

violence in the Arab countries, with a special focus on food security and food policies

2. Cross-country analysis misses the heterogeneity• Country case studies

Growth and Food Security Impacts of Yemen’s Uprising and Scenarios for Transition

C. Breisinger and O. Ecker

Food Insecurity – Conflict Relationship Conflict aggravates household food insecurity. Urban households are particularly vulnerable. For food security of the individual household, the presence of

conflict in the neighborhood seems to matter more than the direct experience of conflict.

Coef. Std. Err.Exposure to conflict Household 1.100 0.233 Neighborhood 3.399 0.484Round -0.081 0.020Log likelihood -392.2Observations 1,303No. of HHs 95

Food insecurity—conflict fixed-effects logit model

Source: Based on data from the UNICEF Social Protection Monitoring Survey (14-round panel) from Sana’a (urban), Al-Hodeidah (urban) and Amran (rural)

26 30 34 38 42 46 500

10

20

30

40

50

60HH exposed to conflict (%)

Food insecurity and conflict, July - Dec. 2011

The Economic Shock of the Uprising Even before the 2011 uprising, economic growth was sluggish, and

food insecurity and malnutrition widespread. Collier (2007) estimates that one year of civil war reduces a

country’s growth rate by 2.2% globally. For Arab countries, the average GDP per capita loss may be even higher, estimated at 3.5% (ESCWA 2010).

Source: Based on data from the Gallup World Poll.

2007 2009 20110

10

20

30

40

50

60

Confidence in national government (%)

Perceptions on political and economic conditions Yemen’s economy was hit hard

in 2011:* • GDP contracted by about 11%.• Gov. spending fell by 12%, and

transfers to households by 23%.• Remittances declined by 10%.

→ Impact on food security?

* Source: IMF World Economic Outlook Database.

Macro-Micro Modeling Framework

Factor markets

Commodity markets

Foreign markets/ countries

Public sector/government

Human/physical capital

Productivity/technology

Urban/ Rural

Farm/Nonfarm

Agriculture

Industry

Services

Economic production HH incomes

Production Consumption

Wages, rents, profits

Foreign trade

Foreign aid

TaxesSpending

and market policies

Foreign investment

Taxes and social policies

Public investment and macro policies

Private investment

IFPRI Dynamic CGE Model Nutrition Models*Parametric estimation:

N = f(Y, P, Z)

Response (coefficient estimates)

Prediction

Expenditurechange

(‘shock’)

Nutrition outcomes

* Reduced-form model for HH calorie consumption and child nutritional status

Estimation Results The recession in 2011 strongly

affects growth and food security in the medium term.

Even if the economy bounces back to pre-crisis growth rates in 2013 onwards, it takes five years to catch up development losses.

Chronic child malnutrition increased, too (although it is less responsive than calorie deficiency).

2010

2015

2020

25

30

35

40

Slow transitionAccelerated transi-tionStagnation

Prevalence of calorie deficiency (%)

Source: Based on data from national statistics, the 2005/06 Household Budget Survey, and others.

2010 2015 2020

-10

-5

0

5

10

Slow transitionAccelerated transitionStagnation

Non-hydrocarbon growth (%)

Calorie deficiency

Child stunting

Slow transition -0.078 -0.011Accelerated transition -0.175 -0.032Stagnation 0.040 0.011

Growth semi-elasticities (2013-2020)

Conclusions

If no action is taken and political turmoil continues, Yemen is likely to suffer for years to come from low growth.

To make up for the lost half-decade, policies and investments for growth acceleration is urgently needed.

This will require additional public spending of between USD 5.4 and 11.3 billion over the next eight years, depending on the spending efficiency.

In addition, direct nutrition and health interventions are necessary to bring down child malnutrition rates and prevent further losses in productivity and growth potential of the next generation.

Yemen has a comprehensive food security strategy in place, but its implementation is still outstanding.

Summary of the Session and Ways Forward

IFPRI MENA Team

Key Messages

1. Food insecurity is a major challenge in the Arab World at both the macro and micro level.

2. Food insecurity and the risk of conflict have been related in the recent past and throughout the Arab Spring.

3. Country-specific food security strategies are key for development and peace.

Work in Progress Arab Spatial – Mapping Food Security and Development Papers:

The Double Burden of Malnutrition and the Role of Food Subsidies in Egypt

Extreme Weather and Civil War in Somalia: Does Drought Fuel Conflict through Livestock Price Shocks?

Improving Resilience to Conflict among pastoralist population in Sudan: Understanding the climate-conflict nexus

Analyzing the Nutritional Impacts of Economic Policies in Yemen: A Macro-Micro Modeling Framework

Research Dissemination

IFPRI MENA Website:http://www.ifpri.org/book-6959/ourwork/researcharea/middle-east-and-north-africa

We acknowledge financial support from IFAD, EU, World Bank, and GIZ.