Paul Rivlin, “The Ukraine War, Rising Prices and Food Insecurity in the Middle East,” Moshe Dayan Center, Tel Aviv University
The war in Ukraine is causing severe food price inflation in the Middle East and elsewhere. This is affecting nutrition and damaging children’s health, possibly permanently. In July, President Sisi of Egypt told a conference in St Petersburg that the rise in grain prices means that: “We are facing a huge number of challenges that threaten the determinants of the security of the continent and the rights of future generations.”
During 2022 global economic growth slowed and inflation accelerated. Prices soared because of supply and demand factors—including food and energy market disruptions that occurred after the war in Ukraine broke out in February 2022. Developed economies and many emerging markets tightened monetary policy to stabilize prices by dampening demand and growth. Countries in the Middle East and North Africa (MENA) were affected by higher interest rates in advanced economies which led to currency depreciation that resulting in a further acceleration inflation.
Oil importing countries in MENA grew very slowly because of high oil and high food prices.
After the start of the war in Ukraine, inflation in MENA accelerated due to rises in the international prices of oil, gas, fertilizers and food. GCC economies kept their inflation well below global averages, as did Jordan and Iraq. All these countries maintained a stable peg between their currency and the U.S. dollar, fuel subsidies and other measures. Egypt, Morocco, and Tunisia experienced higher levels of inflation—with exchange rate depreciations against the dollar playing an important role.
International wheat prices doubled between 2018 and 2022. Despite this between March and December 2022, food prices in Lebanon rose by over 250% and in Iran by over 50%. In the first six months of 2023 they fell and were 13% lower than in 2022. Now they are increasing again: in April in Egypt, food prices were 55% above their level a year earlier. Inflation was not only experienced differently across MENA countries, but it was also within countries. The influence of the increase in food prices in the overall inflation rate means that poor households, that spend a larger share of their income on food, were hurt most.
Despite efforts by governments to control inflation in MENA, the rise in food prices pushes many towards food insecurity—when people are forced to eat less, because of lack of money or other resources. MENA is a large a food importer, and has limited ability to increase supply to counteract rising prices. In addition, drought increases the region’s susceptibility The COVID-19 pandemic disrupted supply chains and food distribution, the effects of which were largely felt by the poor. During the last decade, severe food insecurity has been rising, and this is expected to deteriorate further over the next five years. There will be chronic food insecurity in most countries and acute food insecurity in Syria and Yemen.
The prevalence of severely food insecure people in the region has risen from about 11.8 percent in 2006 to a forecast of 17.6 percent in 2023. The rate of food insecurity in Egypt (6.4 percent), Iran (7.7 percent), and Morocco (6.4 percent) mean that a total of 16 million people suffering food insecurity. The upper-middle-income and low-income countries in the region largely have food insecurity prevalence rates that are higher than their income peers. The lower-middle-income countries perform marginally better than their peers. In the low-income economies, severe food insecurity prevalence is extremely high—at 50.8 percent in Syria and 99 percent in Yemen. These figures do not allow for the effects of the February 2023 earthquake in Syria.
Food price inflation intensifies food insecurity, which is not only an immediate concern, but has long-term implications. The lack of proper nutrition—before birth and/or in early childhood—increases the risk of stunting and worsens schooling outcomes. An estimated 200,000–285,000 newborns may have been at risk of stunting in the developing countries in MENA due to rising food prices since the war in Ukraine began. In 2023, some eight million children in MENA are forecast to be in food insecurity situations. According to UNICEF the total number of children in the region is over 191 million, of whom 6.4 million are refugees and more than 6.9 are displaced. The total number of children in need is close to 53 million. The prevalence of food insecurity in MENA is high and is projected to increase. Syria and Yemen have been classified as hunger hotspots.
Child nutrition and health in large parts of MENA were inadequate before the war in Ukraine and the COVID-19 pandemic. Stressed health systems and inadequate child nutrition and health may exacerbate the harmful effects of food insecurity.
Paul Rivlin is an economist and senior fellow at the Moshe Dayan Center for Middle East and African Studies, Tel Aviv University. He studied at Cambridge, London and Harvard Universities and is the author of two books on the Israeli economy and three others on Arab economies.