A GLOBAL VALUE CHAIN ANALYSIS OF FOOD SECURITY AND FOOD STAPLES FOR

MAJOR ENERGY-EXPORTING NATIONS IN THE MIDDLE EAST AND NORTH AFRICA

Drew Haerer and Lincoln Pratson –Nicholas School of the Environment, Earth & Ocean Sciences Division, Duke University

Gary Gereffi, Ghada Ahmed and Ajmal Abdulsamad – Social Science Research Institute, Center on Globalization, Governance & Competitiveness, Duke University

INTRO

INTRO

INTRO

DATABASE INTRO EXAMPLE: SYRIA

REFERENCES: Breisinger, Clemens, Teunis van Rheenen, Claudia Ringler, Alejandro Nin Pratt, Nicolas Minot, Catherine Aragon, Bingxin Yu, Olivier Ecker, and Tingju Zhu. (2010). Food Security and Economic Development in the Middle East and North Africa: Current State and Future Perspective. Washington, DC International Food Policy Research Institute (IFPRI); Bora, Saswati, Iride Ceccacci, Christopher Delgado, and Robert Townsend. (2010). Food Security and Conflict. Washington, D.C.: The World Bank; CIA Overview – Syria. (June 2012). CIA World Factbook; Trade Performance of Syrian Arab Republic. (2012). International Trade Centre; Country Level Data – Syria. (2012). Diva-GIS. http://www.diva-gis.org/gdata; UN Comtrade Database. (2012); Syria. (2010). Energy Information Administration; World Development Indicators and Global; Development Finance. (2012). World DataBank. World Bank; Syria: Numbers and Locations of People Fleeing Internal Violence. (July 2012). US Department of State, Humanitarian Information Unit; Syria: Joint Rapid Food Security Needs Assessment. (June 2012). UN Food and Agricultural Organization. ACKNOWLEDGMENTS: We would like to thank the Department of Defense MINERVA Initiative for providing funding for this project

INTRO

Declining agricultural production and rising food prices in a number of developing countries could affect the food security, socioeconomic development and societal stability of MENA countries (Figure 1). MENA is the most food-import dependent part of the world with future net food imports projected to rise significantly. The population of MENA countries tripled over the past 50 years to over 300 million and is projected to continue to increase at 1.7% per year. This increase in food demand coupled with rising food prices has created significant instability in the region. Another factor creating volatility is competition for food and water. Arable and agricultural lands are limited in most of the MENA nations as is fresh water access Threats to MENA may potentially be far reaching, including multi-national wars, establishment of terrorist strongholds, massive numbers of refugees, shortages in world humanitarian aid and shortages of energy supplies. Therefore, we will identify the energy-exporting MENA countries whose food staples are at most risk to insecurity. We will then identify and quantify the supply chains for these staples . Our approach will also provide a framework for conducting similar security analyses involving food and other types of supply chains elsewhere in the world. At this stage of the project we are conducting an extensive literature review, compiling data, analyzing the database and loading data into GIS for geographic analysis and mapping.

BACKGROUND

INTRO All data being used for this project is within the public domain. Health data was drawn from the World Health Organization and the United Nations. Socioeconomic and international trade data was drawn from the UN-Comtrade database, the World Bank, the US Central Intelligence Agency’s World Fact Book, and the International Trade Centre. Environmental data was drawn from such sources the US Geological Survey, the Diva-GIS.org database (http://www.diva-gis.org/Data), the World Bank and ESRI.

DATA SOURCES

INTRO

UPCOMING WORK

0

2E+09

4E+09

6E+09

8E+09

1E+10

1.2E+10

1.4E+10

1.6E+10

1.8E+10

2E+10

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

VA

LUE

(U

S$

)

YEARS

SYRIAN NET TRADING TRENDS

TOTAL FOOD IMPORTS

TOTAL FOOD EXPORTS

TOTAL ENERGY IMPORTS

TOTAL ENERGY EXPORTS

TOTAL IMPORTS

TOTAL EXPORTS

0

2E+09

4E+09

6E+09

8E+09

1E+10

1.2E+10

1.4E+10

1.6E+10

1.8E+10

2E+10

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

VA

LUE

(U

S$

)

YEAR

SYRIAN IMPORT TRENDS

TOTAL FOOD IMPORTS

TOTAL ENERGY IMPORTS

TOTAL IMPORTS

0

2E+09

4E+09

6E+09

8E+09

1E+10

1.2E+10

1.4E+10

1.6E+10

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

VA

LUE

(U

S$

)

YEAR

SYRIAN EXPORT TRENDS

TOTAL FOOD EXPORTS

TOTAL ENERGY EXPORTS

TOTAL EXPORTS

0

20

40

60

80

100

120

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

CR

OP

IN

DE

X V

ALU

E

AR

EA

(S

Q.

KM

)

YEAR

AGRICULTURAL TRENDS IN SYRIA

ARABLE LAND

AGRICULTURAL LAND

LAND AREA

CROP PRODUCTION INDEX

0

20

40

60

80

100

120

0

500

1000

1500

2000

2500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

VA

LU

E -

PO

PU

LA

TIO

ND

ES

NIT

Y &

UN

EM

PLO

YM

EN

T

VA

LU

E -

GD

P P

ER

CA

PIT

A &

PO

LU

AT

ION

YEAR

POPULATION AND ECONOMIC TRENDS IN SYRIA

GDP PER CAPITA (CONSTANT 2000 US$)

POPULATION (TENS OF THOUSANDS

POPULATION DENSITY (PEOPLE PER SQ. KM OFLAND)

UNEMPLOYMENT (% OF LABOR FORCE)

Recent civil unrest in the Middle East and North Africa (MENA) has threatened oil and gas production and exports in specific countries, raising concerns about a broader regional conflict that could affect energy exports from other MENA nations. This has helped drive a global surge in fuel prices, and in turn food prices, prompting worry at the International Monetary Fund that if the spike in food prices continues, hundreds of thousands of people could be at risk of starvation and malnutrition. Such an outcome would not only undermine development gains made over the past decade in MENA, but could further fuel social unrest in the region and potentially lead to war. This project seeks to identify the energy-exporting MENA countries whose food staples are at most risk to insecurity. We will then identify and quantify the supply chains for these staples to determine their structure, size and scope, the players involved in them, and the drivers governing their operation. With this understanding, specific risks to the supply chains can be determined and explored in scenario analyses, allowing for the development and prioritization of defensive and/or proactive strategies to deal with problems arising from food shortages in these countries.

Data collection and database creation is the building block of this project. By assembling a database of health, energy, socioeconomic, environmental, trade and supply chain metrics, we can evaluate the trends and potential issues in the value chain. The data will be based in a database management tool and integrated into a GIS database allowing for additional geographic analysis beyond what is possible with typical data management software as well dynamic linking and updating. Through a literature review, we determined the most important metrics in determining and encompassing the MENA food security value chain (Figure 2). These metrics will be used to determine an effective ranking scheme for food security. We will also conduct extensive statistical analyses of the combined data to identify and, where possible, develop empirical relationships between metrics. Based on this ranking, approximately three countries will be chosen to focus on whose food insecurity poses a significant international risk. These countries will be studied further and detailed global value chain models will be created for each.

Syria is a current example of a MENA country undergoing tremendous turmoil (Figure 5). In the midst of civil war, food security has become a major issue. The WFP has estimated that 1.5 million civilians are in urgent need of food. In addition to the domestic fighting, heavy rains and flooding caused wheat crops to be significantly lower than average. Cost inflation has become a detrimental factor in securing food in part because the Syrian dollar has lost value and also because the country has been forced to decrease oil exports, which account for roughly 50% of all exports from Syria.

In particular, the European Union has placed a ban on oil imports from Syria due to the current political regime’s violent repressions to opposition. Trading and shipping are also suffering as many nations refuse to trade with Syria due to the complex socioeconomic situation. And even if ships do make port, many of the food shipments never reach consumers.

Many civilians were forced out of less secure parts of the country – creating hundreds of thousands of refugees (Figure 6). This left farms with a shortage of labor to harvest and tend crops. Combined with high fuel prices that affect irrigation pumps and machinery, many farms have been forced to shut down. This food and energy crisis is a prime example of what may become increasingly more common in MENA – affecting countries worldwide (Figure 7).

Database and GIS development will continue for MENA countries, allowing for spatial analysis of data and effective ranking schemes. Global value chain models will be created for each country, focusing on the organizations involved, domestic infrastructure, global relations, trading and potential “leverage points” and/or bottlenecks in the chain. The bottlenecks will be studied further and a strategic risk analysis will be completed.

The risk analysis will include development of both qualitative and quantitative metrics and will emphasize food imports, energy, and security (Figure 8). These risks will be modeled in the context of the global value chain, indicating the most vulnerable and dynamic parts of the chains and the organizations/countries most influenced. The modeling framework created will be applicable to other countries and regions around the globe that may be facing similar food and energy security issues in the future.

A focus was placed on obtaining the most accurate and recent data for each country in the MENA region. Additionally, time series data was explored for trend analysis to aid development of a ranking scheme. An example of socioeconomic trends in Syria can be seen here (Figure 3). Use of Diva-GIS, ESRI, WAGDA, and WRI to explore GIS data aids in the spatial analysis of global value chains for the region as well commodity flow diagrams, such as those pictured below (Figure 4).

FIGURE 1

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FIGURE 8