The war in Ukraine, which pits two of the world’s leading wheat producers against each other, could cause serious headaches for the leaders of many developing countries where food insecurity is already a major problem.
Posted at 12:00 a.m.
Ongoing fighting and sanctions against Russian President Vladimir Putin’s regime are holding back exports of this staple, limiting overall supply to the point of inflaming prices.
Several regimes in the Middle East and North Africa that depend on international markets for their wheat supply must deal in this context with the possibility that a rise in the price of bread will fuel popular discontent and lead to excesses.
“All the countries in the region will be severely affected,” warns Patrick Cortbaoui, who heads a research center on global food security attached to McGill University.
History is full of examples of uprisings following changes in the price of bread and other staples, whether as a result of higher world prices or a reduction in public subsidies allowing normal time to ensure its stability.
Michaël Tanchum, an analyst from the Middle East Institute (MEI), noted a few days ago in a study on Egypt that keeping the price of bread at an affordable level has been for 60 years “the foundation ensuring the stability of all government” in the country.
Ex-president Anouar el-Sadat had notably tried in 1977, under pressure from the World Bank and the International Monetary Fund, to reduce the subsidies granted for flour, cooking oil and other basic foodstuffs. Riots followed, which led the regime to send in the army.
A spike in bread prices in 2011 following another attempt to cut subsidies and a smaller-than-expected harvest in Russia also contributed to the uprising that led to the downfall of Hosni Mubarak, Tanchum noted.
PHOTO YVES HERMAN, ARCHIVES REUTERS
Abdel Fattah al-Sisi, President of Egypt
The problem is again acute for the country’s current leader, Abdel Fattah al-Sissi, since 85% of the country’s wheat imports come from Russia and Ukraine.
According to the MEI, the regime had planned to spend nearly $4 billion over one year to subsidize bread. If its price for Egyptians is maintained without modification, the evolution of the world price of wheat ensures that the aid program will cost much more and will weigh heavily on public finances, warns the organization.
Egypt, no exception
Patrick Cortbaoui notes that the dilemmas faced by the Egyptian regime are far from unique.
He cites the example of Lebanon, his country of origin, which has been grappling with a serious economic and political crisis for two years. It resulted in a sharp drop in the national currency and galloping inflation, particularly in the food sector.
[Le Liban] hadn’t even come out of two years of pandemic yet and prices had already started to skyrocket before the invasion in Ukraine happened.
Patrick Cortbaoui, researcher on global food security
Lebanon, he said, is particularly affected by the conflict since almost 80% of its wheat imports normally come from Ukraine and Russia.
The double explosion at the port of Beirut last year also complicated the situation, notes Mr. Cortbaoui, since it destroyed the grain silos, limiting the storage capacities of the country, which today has a month reserve.
Nearly 70% of the population finds itself living below the poverty line and therefore risks welcoming with great discontent any new rise in the cost of basic foodstuffs, in particular bread.
“We are certainly going to see more and more demonstrations,” notes the researcher, who is alarmed by the fact that the current government does not have a “credible strategy” to try to revive the country’s economy.
The MEI notes that the countries affected by the surge in wheat prices could partially resolve the crisis in the short term by seeking assistance from other exporting countries, such as Canada.
The member countries of the G7 are to meet this Friday to take stock of the impact of the war in Ukraine on food security.