World Bank: Ukraine War Threatens MENA Food Security, Welfare

Rabat – The Ukraine war will potentially have a “compounding” negative effect on food security and social peace across the Middle East and North Africa (MENA) region, according to the World Bank.

Coupled with lingering COVID-induced supply chain disruptions, the Ukraine crisis will likely worsen the trend of rising food prices, especially wheat and energy prices, specifies the World Bank report.

Adding to the direct effect on food and energy prices, the report explains that the Ukraine crisis will equally affect the flow of capital into emerging markets, including the MENA region, as people and investors run to safety, amid reductions in the flow of remittances and tourists in the region.

Hydrocarbon exporting in the region including Saudi Arabia, Qatar, Kuwait, Libya, and Algeria, will witness improvement in fiscal and external trade as Europe moves to diversify energy suppliers, the report points out.

While oil-exporting MENA countries are set to reap the benefits of rising demand on non-Russian oil, non-oil exporting countries such as Egypt and Jordan will likely brace under the strain of rising oil prices.

Remittances from the GCC are projected to only partially offset the loss within the tourism industry, as Ukrainian and Russian tourists average a third of the tourists in Egypt, leading to potential job loss in the domestic tourism sector.

MENA countries relying on Ukraine and Russia for food imports are set to suffer the most, as the crisis will disrupt the grain and oilseeds supply chain, sending food prices even higher. With global restraints on importing grain, pressure on domestic production will likely increase, increasing the production cost, and reducing income for vulnerable agriculture-reliant farmers, explains the report.

The Ukraine crisis will directly threaten food security in the already-fragile MENA countries including Syria, Lebanon, and Yemen, as Syria (with only a one-month wheat reserve) imports around two-thirds of food and oil from Ukraine and Russia.

With 40% of wheat imports coming from Ukraine and Russia, the Ukraine war will cause a severe lack of food in Yemen amid an ongoing famine in the war-torn country.