Middle East instability ‘poses greatest threat’ to GCC’s food security
Instability in the Middle East is the biggest threat to the Arabian Gulf’s fragile food security, according to a report by Chatham House.
The region is vulnerable because imports account for between 80 and 90 per cent of food consumption in the GCC, where food self-sufficiency is unattainable due to high temperatures, low rainfall and scarce renewable freshwater sources.
However, events such as the 2011 uprisings, political instability in Egypt and Syria, food-price spikes, and Iran’s threats to close the Strait of Hormuz have “sharpened” the risks.
“The worst-case scenario is conflict in the wider Middle East and North Africa region that disrupts multiple import routes for a sustained period,” said the report titled Edible Oil: Food Security in the Gulf.
Almost all of the food imported into the region moves through the Suez Canal, Bab Al Mandab or the Strait of Hormuz, according to Chatham House.
More than 12 million tonnes of wheat and coarse grains shipped from North America, South America, Europe and the Black Sea first pass through the Suez Canal in Egypt. They represent 81 per cent of total commodities imports to the GCC.
A further 5.8 million tonnes commodities imports then transit through Bab Al Mandab between Africa and Arabia, and 5.2 million tonnes are subsequently shipped onto Kuwait, the UAE, Qatar, Bahrain and the eastern ports of Saudi Arabia via the Strait of Hormuz.
About 2.5 tonnes of rice from South Asia and South East Asia, and 0.7 million tonnes of wheat from Australia also pass through the Strait.
Iran has threatened to close the Strait several times, most recently last year in response to sanctions imposed over its nuclear programme. However, Iran has since entered into negotiations with six world powers, including the United States, about rolling back its nuclear programme.
If conflicts were to result in the closure of the Strait, governments in the Arabian Gulf would struggle to export oil, said the report.
“But a secondary effect would be to limit food imports, particularly for states that are entirely reliant on ports within the Persian Gulf: Bahrain, Kuwait, Qatar and the UAE,” it said.
The chances of Iran actually carrying out the threat to close the Strait are slim at best, according to the author of a book on food security in the region.
“I don’t think that Iran has the military capacities to close the strait sustainably and I don’t think they have any interest whatsoever,” said Eckart Woertz, a senior research fellow associate at the Barcelona Centre for International Affairs and the author of Oil for Food: The Global Food Crisis and the Middle East.
“They [Iran] need to export oil via the Strait of Hormuz. They do not have any alternative export outlets like the UAE or Saudi Arabia. That would bring the art of shooting one’s foot to a new level,” said Mr Woertz.
“And by the way they are also a major food importer. In good years, they are self-sufficient in wheat, but other years they import large quantities of other foodstuffs, and even during drought years they have to import wheat.”
Furthermore, Iran could potentially help to improve food security if the talks go well and the sanctions are eased.
Bessma Momani, an expert on the Arab world and an associate professor of international affairs at the University of Waterloo in Canada, said Iran had large amounts of arable land and fresh water.
“It makes no sense for the Gulf to be flying in meat from Europe or elsewhere if Iran can supply it from next door,” she said.
But perhaps the solution, according to Mr Woertz, lies in investing in brownfield agricultural sites overseas, such as farms that are already operational.
Many GCC countries are already investing in this option.
“Investors are increasingly seeking existing farming operations rather than undeveloped land,” said the Chatham House report. “For example, the UAE’s Al Dahra [a firm specialising in agriculture] recently announced plans to invest US$400 million in eight Serbian farming companies, with an additional $400m in loans from the Abu Dhabi Development Fund to help to develop the agricultural sector.
“This approach minimises the risk of conflict with local communities and reduces start-up times, problems encountered with earlier land-based investments.”
Strategic stockpiling of commodities could also provide Arabian Gulf governments with a “degree of insurance against price and supply risks,” said the report, as could a regional network of deep-sea ports on the Gulf coast, linked through a regional railway.
“[This] would provide governments with more routing options and hedge against the risk of maritime choke points being disrupted or closed. Realising this opportunity requires enhanced cooperation between governments,” the report said.
* with additional reporting by Tom Arnold
Updated: November 11, 2013 04:00 AM