A traditional market in the old city of Sana'a, Yemen, on March 12, 2022. EPA
A traditional market in the old city of Sana'a, Yemen, on March 12, 2022. EPA
A traditional market in the old city of Sana'a, Yemen, on March 12, 2022. EPA
A traditional market in the old city of Sana'a, Yemen, on March 12, 2022. EPA


The Arab region must improve agrifood systems to deliver food security


Abdulhakim Elwaer
Abdulhakim Elwaer
  • English
  • Arabic

March 30, 2023

The majority of the Arab region is facing unprecedented challenges in its efforts to end hunger, malnutrition and ensure that everyone has access to adequate and affordable healthy diets. This is due to multiple challenges and factors beyond the actions and controls of Arab countries. The consequences, however, of these challenges and factors have burdened the population widely and burdened some governments to ensure the minimum food security by providing subsidies and other forms of support; which are becoming challenging in itself as a policy tool, due to the tight fiscal space.

In the near future, it does not seem that there will be a significant improvement in the current situation. The recent crises such as the war in Ukraine, the fallout of Covid-19 and the affects of climate change have stressed the agrifood systems and disrupted food supply chains around the world, including in the Arab region. In fact, it was one of the most affected world regions, mainly due to its heavy reliance on food imports from global markets and the Black Sea region.

According to the joint UN Report "2022 Near East and North Africa Regional Overview of Food Security and Nutrition" recently published by the UN's Food and Agriculture Organisation, the Arab region accounted for 7.6 per cent of the world's total agricultural imports in 2020. The countries of the Near East and North Africa are among the world's largest importers of grains, and more than 50 per cent of the caloric requirements are met through the food imports. In the UAE, Kuwait, Saudi Arabia, Jordan and Yemen, more than 80 per cent of the total local availability of calories comes from imports.

The report highlights the significant challenges the region is facing due to this situation, with the number of people suffering from malnutrition in the region reaching 54.3 million in 2021, or 12.2 per cent of the total population. This represents a 55 per cent increase over the figures of 2010; that is, before the region was hit by major shocks resulting from a wave of conflicts and popular uprisings. Globally, the number of people suffering from severe food insecurity in 2021 is estimated at 53.9 million, an increase of 5 million from the previous year.

Moderate or severe food insecurity rates also continued to rise, negatively affecting an estimated 154.3 million people in 2021, and an increase of 11.6 million people compared to 2020. The number of people suffering from food insecurity has been steadily increasing since 2014, with 34.7 per cent of the total population suffering from moderate or severe food insecurity in 2021 when more than half of the Arab population could not afford a healthy diet. There are of course several stable countries in the region do have a much better prognosis when assessed individually.

At first glance, these indicators and figures suggest that the Arab region is unlikely to achieve Sustainable Development Goal 2 of eliminating hunger by 2030, in addition to many other challenges including climate change, conflicts, disasters and structural problems such as poverty and inequality.

However, despite these alarming figures, there is still a chance to reverse this situation, overcome these crises and challenges, and achieve food and nutrition goals. This can be done by bringing about a transformation in the agrifood systems of the region's countries to make them more inclusive, sustainable and resilient. Some countries in the region have begun to realise this and are striving to prepare their food and agricultural systems for this transformation through various strategies in sustainable agriculture and rural development.

The first step is to enhance and disseminate the necessary knowledge and technology and enable frameworks such as the financing. Moreover, enhancing integration between the countries and intra-regional trade would help in reducing the food import bill, while optimally utilising local resources in the Arab countries. This requires strategic investment in all these areas, along with a high-level political will and the development of clear and tested policies.

Our attempt to reduce the food import bill should not neglect the importance of trade in ensuring the achievement of the four dimensions of food and nutrition security – availability, access, utilisation and stability. Trade can increase the quantity and diversity of food and reduce its prices in food-importing countries. International trade, therefore, is essential for diverse and healthy food systems in the region.

The report also calls on Arab countries to leverage intra-regional trade and rely more on each other’s capacities as regional trade helps reduce food shortages during normal agricultural production cycles and provides an important mechanism to address production shortfalls or supply chain disruptions caused by adverse and unforeseeable global events.

A worthwhile starting point might be to complete the ambitious development agenda that requires accelerated action to end hunger and eliminate malnutrition by ensuring that sufficient quantities of safe, nutritious and affordable foods are available to all. Therefore, the Arab region should improve agrifood systems to deliver food security and better nutrition for all, to be economically sustainable, to be inclusive, and to have a positive impact on the climate and environment.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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