Thursday, May 15, 2008

Food price crisis bites in Egypt


The last month has been witness to an increasingly disturbing phenomenon in the Middle East and North Africa: civilian riots over the rising cost of food. Riots have occurred in Egypt, The UAE, Yemen, Lebanon and Saudi Arabia in what appears to be a region-wide problem. It is Egypt that so far has been most affected.

http://news.bbc.co.uk/2/hi/middle_east/7381766.stm

What’s occurring in Egypt is the result of population pressure on a land with few natural resources. Like the rest of the Middle East, Egypt had little or no modern medicine until its colonization by European powers after World War I. With the colonizers came vaccines for small pox and other diseases, as well as investments in basic infrastructure that increased dramatically the probability of Egyptians living past childhood.
At the same time, Arab and Muslim countries have some of the highest birth rates in the world. Much of the reason for this is religious and cultural, but there’s also a practical reason. In countries with little or no social security, the only way one can be sure of being taken care of in old age is to have as many children as possible to increase the probability that some will prosper and take care of mom and pop.
The result in Egypt and the rest of the Middle East is a sort of population time bomb. Looking at a graph of Egypt’s population, one can see the steady rise that took it from 20,000,000 in 1950 to 80,000,000 currently. Now the Nile Valley peasants can no longer feed the 12,000,000 people who live in Cairo. Exacerbating the situation, most of the cities that house this ballooning population have sprawled unchecked over the most productive farmland. Egypt, which once grew enough grain to literally feed the entire ancient world, is now a food importer, with much of the grain that feeds its citizens coming from the United States.

Of course they’re not alone:

“The FAO estimates the region’s cereals import bill will hit $22.6bn this year (£11.4bn, €14.5bn), a 40 per cent increase on 2007. Since 2000, it has jumped almost 170 per cent. The rising bill is the latest signal of the looming food crisis hanging over the Middle East and North Africa, the region of the world most dependent on imports of food staples.” ( http://www.ft.com/cms/s/0/d69a26e2-1bc2-11dd-9e58-0000779fd2ac.html)

Worldwide, the poor are bearing the brunt of the suffering. If a family spends 75% of its income on food and the cost of food rises 25%, it is immediately thrust into destitution. With destitution comes instability. The hungry, ignorant of the macroeconomics that led to their plight, start to point fingers at the ruling powers. Accusations fly, conspiracy theories run rife and the masses, unable to place the blame on their over-productive wombs, demand change. All of the sudden, ideologies like Islamism and communism appear attractive and the whole country erupts like a powder keg into civil war.
My fear is that the alternatives are few. Higher prices will eventually bring more investment in agriculture in places like India and Russia which will boost output and keep prices in check. Egypt has less to gain from investment, however, because it has no more land on which to farm. The income it receives from petroleum exports, tourism and the Suez Canal is not enough to subsidize the whole country. With no manufacturing base to speak of and few other natural resources, it seems that Egypt will be forced to survive as a charity, relying on handouts because it has nothing to trade in return.
The thought of an unstable Egypt, teetering on the brink of civil war, with only UN food shipments to keep it afloat, is enough to scare the wits out of anyone. Birth control is the only solution I see, but I can guarantee that a China-like solution where the powers-that-be can mandate how many kids you can have will not take hold there as easily as it did in China. It’s un-Islamic, and I doubt any regime could enforce it.

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