The UAE is the best placed in the Middle East and Africa region in terms of food security and its ability to navigate supply chain disruptions, according to a new report.
The Emirates had the lowest risk among 56 countries in the Middle East and Africa region from issues such as supply chain disruption, inflation, food insecurity and rising debt in the fourth quarter of 2022, followed by Israel, Saudi Arabia, Qatar and Kuwait, the report by data and analytics company GlobalData found.
The GlobalData Country Risk Index (GCRI) incorporates the latest available macroeconomics, political, social, technological, environmental and legal data.
Switzerland topped the index, followed by Denmark and Singapore, while the Middle East and Africa region’s risk score increased from 54 to 54.3 out of 100 in the fourth quarter owing to the geopolitical situation and rising inflation, according to the report.
"Many countries in the MEA region are heavily dependent on food imports, and disruptions to food supply chains due to factors such as conflict in Ukraine and Syria, drought in Horn of African nations and Kenya continue to create significant challenges for food security,” said Bindi Patel, economic research analyst at GlobalData.
Streamlining food supply chains is crucial to ensuring food security, a growing priority across the world, especially after the Russia-Ukraine conflict and supply chain disruption.
The UAE is promoting the use of technology to boost the AgriTech sector, and has also pledged to take action on the global food crisis.
Behind the UAE’s success in developing a global-scale food production and distribution capacity is the country’s National Food Strategy 2051, first announced in November 2018 by Mariam Al Mheiri, Minister of State for Food Security, and Minister of Climate Change and Environment. The plan has informed the UAE’s acquisition of agricultural and food production assets from South America to South Asia.
As part of the strategy, the UAE aims to achieve zero hunger by ensuring access to safe, nutritious and sufficient food all year round throughout the world. It aims to introduce resilient agricultural practices that increase productivity and production, thereby helping to maintain ecosystems.
The Middle East and Africa region has been severely affected by supply chain disruption and the consequent rise in prices of essential commodities such as food and fuel, the GCRI report said.
This is due to the region’s heavy reliance on Russia and Ukraine for imports of staple food items. The region is also grappling with persistent challenges such as social unrest, food insecurity and mounting debt, according to the research.
“Despite the implementation of tighter monetary policies, the inflation level in the MEA region is expected to remain alarmingly high, with only a marginal decrease projected,” Ms Patel said.
“The inflation rate in the region is estimated to be 18.7 per cent in 2023, with particularly high rates anticipated in Egypt (23.3 per cent), Iran (40.7 per cent), Turkey (43.7 per cent) and Nigeria (19.3 per cent).”
The overall risk for countries in the Middle East and Africa region is still moving upwards, as further slowdown in the global economy, increasing tighter monetary conditions, overall geopolitical tensions and rise in poverty and food insecurity continue to negatively weigh on the region's economies, she added.
Out of 153 nations considered by the index globally, Ethiopia, Madagascar, Mali, Guinea-Bissau, Angola, Mauritania, Liberia, Sierra Leone, Democratic Republic of the Congo, Burundi, Chad, Libya, Mozambique, Yemen and Syria from the Middle East and Africa region were in the list of 15 highest risk countries.
The global risk score increased to 45 out of 100 in the fourth quarter of 2022 from 44.9 in the prior quarter as high borrowing costs, external sector risks and elevated inflation continued to weigh on growth prospects.
The global risk score remained much higher than the pre-Covid-19 level of 41.1 in the fourth quarter of 2019, the report found.
Europe continued to be the region with the least risk in the world. The risk score decreased to 33 in the three months to the end of December, from 33.4 in the third quarter, due to prudent government measures to tackle the energy and cost-of-living crisis, GlobalData said.
The risk score of the Americas decreased marginally to 47.5 in the fourth quarter from 47.7 due to a vulnerability in Latin American countries, such as Venezuela.
In Asia-Pacific, the risk score increased to 42.4, with China’s zero-Covid policy leading to a slowdown in the economy, the economic crisis in Sri Lanka, and a devastating flood in Pakistan posing major risks for the region, the report said.
