Beyond the Arab Awakening:Policies and Investments for Poverty Reduction

and Food SecurityClemens Breisinger, Olivier Ecker, Perrihan Al-Riffai, Bingxin Yu

Development Strategy and Governance DivisionInternational Food Policy Research Institute

USAID

Washington D.C., November 22, 2011

Causes of the Arab Awakening

• Political Lack of democracy and justice

• Sociological Lack of dignity and freedom

• Economics Official numbers looked promising in many

countries…

Perception-based data suggests that economics did play a role

Yemen

Iraq

Sudan

Djibouti

Morocco

Jordan Algeria

Syria

Tunisia Egypt

Mauritania Lebanon

Libya Bahrain

Saudi Arabia

UAE

Kuwait

Qatar

GDP per capita (PPP, current international $)

Source: Based on Gallup World Poll (2011) and WEO (2011) data.Note: Bubble size: Number of dissatisfied people. Color scale: Change in level of dissatisfaction (time period between first and last surveys undertaken in the country; last survey: 2010, first survey: 2005-2009): green: decrease; orange and red: increase, with red: increase at an annual growth rate of at least 2 percentage points.

Percentage of people dissatisfied with their standard of living

Official data may have underestimated poverty: The Arab growth-nutrition puzzle

…and underestimated income inequality (GINIs) too

Country HCE 1990s

HCE 2000s

HCE* 1990s

HCE* 2000s

HCE/HCE* 1990s

HCE/HCE* 2000s

Djibouti 150.5 93.5 90.6 119.5 1.66 0.78

Mauritania 78.7 88.3 98.8 97.3 0.80 0.91

Yemen 82.6 84.0 128.5 110.1 0.64 0.76

Morocco 155.4 161.4 150.1 181.1 1.04 0.89

Tunisia 151.3 182.4 213.6 278.0 0.71 0.66

Egypt 100.9 121.1 219.2 312.8 0.46 0.39

Jordan 151.6 210.1 231.3 315.2 0.66 0.67

Syria 129.8 125.5 200.3 212.3 0.65 0.59 Source: UNDP 2011 Note: Per capita Household Consumption Expenditure (HCE) derived from household surveys and national income accounts (HCE*) (in 2005 PPP) and their annual percentage change for Arab Countries, 1990-2000 and 2000-2009

Lack of data may also have contributed to the neglect of policy research in the region

• On RePEc, a keyword search for “MENA” and “Arab” yields 1,150 and 1,550 research papers, respectively, a search for “Africa”, “Asia,” and “Latin America” shows 21,760, 16,400, and 11,720

• Lack of demand from policy makers and incentives for analysts

• Policy research can help identifying pros and cons of alternative options

• And, “rationalize” the debate

Source: Wagstaff & Adam (2011). The (gradual) democratization of development economics. http://blogs.worldbank.org/developmenttalk/

Macro- and micro dimensions of food securityMACRO : Economy & state

Infrastructure & trade

Public health & education

Agriculture & water

MICRO: Household & household members

Food Income Prices Production

for own consumption

Assets & services Water Shelter &

sanitation Health care Information &

knowledge

Access

Food & nutrient intake

Health status

Nutritional status

Human capacity & productivity

ECONOMIC & SOCIAL DEVELOPMENT

Interventions External shocks

Economic policy & investments

Social protection

Nutrition & health programs

International economic crises & climate change

Natural disasters & conflicts

Diseases & Epidemics

Resource allocation

& care

Quality of institutions & governance

Economic growth & structure

Key sectors

Poverty

Macroeconomic stability

Macro-level food insecurity risk in Arab-TI

Source: Breisinger et al. 2011, forthcoming

Micro-level food insecurity risk in Arab-TI

Source: Breisinger et al. 2011, forthcoming

A new Arab food insecurity risk map

Source: Breisinger et al. 2011, forthcoming

What has been the policy response to the food crisis and Arab awakening?

How to improve food security sustainably?

• For countries with macro-challenges– Export-led economic growth to generate foreign

exchange? – What is the role of agriculture?

• For countries with micro-challenges– Pro-poor and job-creating growth, in which

sectors?– Public spending, for example targeted transfers to

households?

Cross-country econometrics to answer some of these questions

1. ‘Child health production function’: )H = health status, I = health inputs, E = health environment factors, ψ = genetic health endowment of child k

2. Reduced-form child nutrition model: )N = nutritional status, Y = household income

=> Income elasticity wrt. nutritional status: , approx.: 3. Cross-country nutrition model (in first differences):

N = child nutrition situation, Y = national income of country i

4. Decomposition of growth by sectors: η = sector participation component, s = sector share component of sector x (Ag, non-Ag; Ag, Ma, In, Se value added)

5. Regression model (based on time series data):

N = prevalence of child undernutrition, Y = GDP per capita, t = time period, Z = trend effects

***, **, * statistically significant at the 1%, 5%, and 10% level, respectively.

Large scope for making growth more pro-poor in Arab-TI, especially in agriculture

1 2 3 4 5 6Growth (per capita)

GDP 100.0 -0.07 100.0 -0.12 ***AgVA 15.3 0.70 ** 1.06 *** 19.8 -0.46 *** -0.34 ***Non-AgVA 84.7 -0.07 80.2 -0.08 ***

MaVA 13.3 -0.39 * 20.5 -0.54 ***InVA 25.5 0.03 13.3 0.11 †SeVA 45.8 -0.27 ** 46.4 0.00

Stunting level, lagged (t-1) -0.16 † -0.12 -0.09 -0.25 *** -0.27 *** -0.28 ***F-value 2.2 2.8 3.4 2.2 2.3 2.5R-squared 0.50 0.59 0.66 0.47 0.48 0.51R-squared adjusted 0.27 0.38 0.47 0.25 0.27 0.30Observations 66 66 66 340 336 336Countries 20 20 20 97 96 96

Ag. & non-ag. growth

Sector growth

Arab-TI region ROWOverall growth

Ag. & non-ag. growth

Sector growth

Sector VA share (% of GDP)

Overall growth

Sector VA share (% of GDP)

One reason why agriculture is not as pro-poor in Arab countries is because it’s no longer the

major source of income for the poor

0% 20% 40% 60% 80% 100%

1234

Rural quintile 51234

National quintile 5

AgricultureNon-agricultural labor incomeOther income

0% 20% 40% 60% 80% 100%

1234

Rural quintile 51234

National quintile 5

AgricultureNon-agricultural labor incomeOther income

Syria: Sources of household incomes Egypt: Sources of household incomes

Source: Based on Syria Central Bureau of Statistics 2007 (FIES 2006/07) and CAPMAS HIECS 2008/09 for Egypt.

Public spending in Arab countries is high compared to other regions

But, there is scope for improving the efficiency of public spending, especially in social sectors

***, **, * statistically significant at the 1%, 5%, and 10% level, respectively.

Solutions have to be country-specific: Yemen National Food Security

Strategy

IFPRI has supported Yemen to develop a National Food Security Strategy

Assessment of the current food security level 32 percent of the Yemeni population is food

insecure Food insecurity is more concentrated in rural

areas

7-Point Action Plan for achieving Food Security Targets Decisive policies for subsidy reform, agriculture,

water Targeted investments to support pro-food secure

growth and food insecure households Smart programs for child nutrition, women

education and qat reduction

Digital Food Security Atlas

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

-20-18-16-14-12-10

-8-6-4-20

Reduction of food insecurity under NFSS

NationalRural farmRural nonfarmUrban

Other country examples of IFPRI’s work in MENA

• Egypt - Nile river water allocation• Syria and Yemen - Impacts of climate change• Morocco - Impacts of global food crisis• Somalia – Effect of droughts on conflict

• Improving resilience to conflict in MENA, with examples from Somalia, Sudan, Yemen and Egypt

Discussion of next steps for IFPRI and partners

• Conference “Priority setting for food security and poverty reduction in the Arab World” in Alexandria

• Support data collection and analysis to foster evidence-based decision making (example: ReSAKSS)

• Research on key issues, such as food security, growth-nutrition puzzle, role of agriculture, public spending efficiency, pro-poor growth strategies etc.(example: Country Strategy Support Programs)

• Food Policy Partnerships(example: CAADP)