The Middle East is the world’s most water-stressed region in the world. The average availability of water is 1200 cubic meters per person per year, projected to be halved by 2050 (this compares to a global average of 8900 cubic meters per year today and about 6,000 per person per year in 2050.) Studies indicate that the Middle East has the highest rate of total renewable water resource withdrawal (about 75 percent) compared with Latin American and the Caribbean with about 2 percent. The decline in water resources is further aggravated by population growth which has quadrupled since 1950 to reach 364 million at the present and projected to reach 600 million in 2050. Recent drought in the Middle East coupled with desertification has meant that the underground water tables will not be replenished. An official in the Iranian ministry of agriculture told Agence France-Presse last week “We are dying of hunger.”[1] In fact, according to a recent US Department of Agriculture report, Tehran has bought 1.8 million tons of American hard wheat, commonly used in breads and pasta, since the 2008-2009 crop season began in June. Iran is likely to purchase an additional 1.5 million tons of wheat from other countries. [2] Calls for prayers for rainfall [salat al-istisqaa] are heard from Saudi Arabia to Iran.

Shortage of water is reducing agricultural yields, and countries cover demand for food by importing grains, particularly wheat and rice, the main food staples in many countries in the Middle East. The Arab Organization for Agricultural Development estimates Arab import of food products at $35-$40 billion annually.[3] Some Gulf countries import as much as 90 percent of their food products Egypt, one of the largest importers of wheat in the world, imports 6.5 million tons of wheat annually, primarily from Russia, the European Union and the United States. Egypt has announced late in August that it has purchased one million tons of wheat from Kazakhstan.[4] Syria, until recently a net exporter of wheat, is forced to buy wheat from Bulgaria.[5] Not long ago, Iraq was self-sufficient in feeding itself. However, Iraq has a long-term supply contract with Australia, the United States and France. [6]

In the case of Egypt, but elsewhere in the Middle East as well, most of the imported wheat goes for bread which is sold at subsidized prices. As the price differential between the subsidized flour and that which was available at the commercial market widened as a result of grain price escalation, millers channeled government-subsidized flour to private bakeries for bigger profits, causing shortage of bread for millions of poor Egyptian people. Rising political and social tensions over the shortage of bread has prompted President Hosni Mubarak to mobilize the army in the production of bread.

“Food May Break the Middle East’s Back”[7]

Writing in Beirut “Daily Star” under the above title, Rami G. Khouri suggests that, in the Middle East, “the crisis of food prices and availability may be the straw [that] breaks the back of many camels.” Khouri underscores the reality that “The Arab world lacks credible, equitable, efficient safety nets to cushion the vulnerable and the poor.” Data from the United Nations Food and Agriculture Organization indicate that around 13 percent of Arabs are undernourished although this is slightly below the global average of 14 percent. The agricultural sector in the Arab countries contributes a mere 6.2% to GDP.[8] The capacity of Arab governments to address the looming threat, Koura points out, “is miniscule, because much of the region’s current weakness reflects policy incompetence at high levels over many years.”

The stark reality is that the Middle East cannot feed itself.

A Novel Approach by Gulf Oil Countries

The member states of the Gulf Cooperation Council (Saudi Arabia, United Arab Emirates, Kuwait, Bahrain, Qatar and Oman) rely heavily on food imports [they have little water and not much arable land.] Concerned about food security some of these countries, particularly Saudi Arabia, UAE, Kuwait and Qatar are embarking on a novel idea. They are engaged in serious discussions with a number of countries with surplus land and water such as Sudan, Uganda, Viet Nam, Pakistan, Thailand and others, to buy farmland to produce their food requirements, primarily rice and wheat. No deal has so far been finalized but there is good reason to believe that such deals are in the offing. Only last week have we learned of a deal of natural gas for land between Qatar and Vietnam Saudi Arabia has decided to set up a new investment fund to buy agricultural land overseas in an effort to meet rising food demand. The fund’s first investment is planned in Sudan.[9] The strategy is to guarantee the supply of food regularly and at prices that would not be subject to sharp fluctuations. The main advantage of the partner countries that offer their farm land for cultivation by the Gulf countries is that they are guaranteed a steady supply of oil and gas, and/or cash. This land for energy deals will also provide employment for the local population.

FAO Sounds Warning

Jacques Diouf, the Director General of the United Nations Food and Agriculture Organization (FAO) is advising the Gulf countries against outright land purchases which could trigger political backlash in countries that are struggling to feed their own populations. Diouf said: “I have no problem in Arabs doing the investment. Where I start getting worried is [a situation in which investors] rush and buy land all over the place. Land is a political hot potato.”[10]

In fact, in the Gulf countries themselves, voices are being heard recently calling on their governments to invest in agricultural land in Europe and Latin America. The Gulf Research Center in Dubai called for investments in alternate destinations such as Europe and Latin America which could yield higher results. It said that besides more land and water resources, Latin America and Europe would offer established markets - with better rule of law and safety of foreign direct investments -as well as existing know-how and infrastructure.[11]

Higher Prices Provide Incentives to Farmers

Paradoxically, higher food prices could provide the incentives to farmers to produce more and revitalize the rural economies. According to a report released by the World Bank, higher prices can “help trigger increases in productivity and domestic production in agriculture.” Keeping in mind the scarcity of water, the World Bank has called on the governments of the region to increase the efficiency of water use by producing “more crops per unit of water.” Realistically, the countries in the region, says the Bank, “need to continue to rely on imports and on world markets to ensure their food supply.”[12]

Similar views were expressed by the United Nations Development Programme (UNDP) in its Human Development Report 2006 which dealt with water scarcity. The UNDP report indicates that countries can reduce water stress by importing cereals and grains and, hence, water imbedded in them. Stated differently, by importing cereals countries save the water, often in shrinking quantities, they would otherwise use to produce their own cereals. To produce their own with the use of scarce water resources, would drive many countries in the equivalency of water bankruptcy. Putting to best practice the principle of comparative advantage, water-poor countries must rely on water rich countries to supply them with their grains.[13]

Conclusion

There is a new strategic balance emerging: oil-producing countries need to import grains to feed their populations; grain-producing countries need oil to generate their electricity, run their industrial machinery and heat their homes. The one cannot exist without the other. A mutual dependency is important to enhance the prospects of peace.

[1] The Jordan Times, September 11, 2008

[2] Gulf news, July 25, 2008

[3] Al-Thwart, Syria, August 4, 2008

[4] Al-Shaq, Qatar, August 31, 2008

[5] Al-Vefagh, Iran, August 27, 2008

[6] Al-Sharq, Qatar, August 23, 2008

[7] The Daily Star, August 30, 2008

[8] Al-Sharq, Qatar, September 14, 2008

[9] Gulf Times, Qatar, August 26, 2008

[10] The Wall Street Journal, September 10, 2008

[11] Gulf News, August 30, 2008

[12] The World Bank, “Mena Food Crisis: Questions and Answers,” web.worldbank.org/WEBSITE/EXTERNAL/COUNTRIES/ME May 2008

[13] United Nations Development Programme, Human Development Report 2006. Beyond Scarcity: Power, poverty and the global water crisis. New York, N.Y. 2006, pp.149-150.