Dear Minister Al-Jadaan, Managing Director Georgieva, honorable guests and participants,
Despite the recent stabilization of agriculture prices and the resumption of grain exports from the Black Sea, food inflation and insecurity remain critical problems. We recently released our Food Security Update and the outlook is grim.
Food prices are continuing to increase in the Middle East and North Africa (or MENA) due to global supply chain disruptions and water stress. For example, Morocco’s cereal production this year was one third of last year’s due to serious drought. In Lebanon and Tunisia, some imported and regulated food items such as rice, sugar, and vegetable oil are unavailable in the market because of high costs and supply chain disruptions. This is hurting vulnerable households and causing social tensions.
We see this problem persisting into the future, because fertilizer prices and other input costs are still high. The war in Ukraine has altered global patterns of trade, production, and consumption in ways that will keep prices at historically high levels through 2024. Many countries also continue to use trade policy, including export restrictions, in the face of rising inflation. These policies will aggravate an already alarming situation.
We issued a joint statement together with the IMF, FAO, WFP, and WTO last week on food security, highlighting the importance of open trade, transparency, innovation and joint planning, and investing in food systems transformation. Through the Global Alliance for Food Security that we convened with the G7 Presidency, we are also working together to see where the needs and gaps are, so we can help with effectiveness and speed wherever possible.
The world needs more sustainable food production and resilient supply chains. One aspect of this is for countries with scarce water resources such as those in MENA to use resources more efficiently and allocate them based on true value, such as modernizing irrigation, reducing water losses, and calibrating tariffs. Another aspect of this is for advanced economies to commit to reducing distortive subsidies and trade restrictions, so that they don’t engender systemic inefficiencies. This two-pronged approach can improve the efficiency of both production and consumption in food and energy value chains.
As the World Bank Group, we are implementing a $30 billion food insecurity response comprised of new and ongoing projects to support vulnerable households cope with the shock, support farmers to increase production, improve nutrition outcomes and build resilient food systems. There is considerable demand for these projects. We have recently approved several, including in the MENA region in close coordination with other partners, including a $150 million emergency operation in Lebanon last spring. I will also mention the $500 million Emergency Food Security and Resilience Support.
Project to bolster Egypt's efforts to ensure that poor and vulnerable households have uninterrupted access to bread, help strengthen the country's resilience to food crises, and support reforms that will help improve nutritional outcomes. I will also note the $130 million loan for Tunisia, seeking to lessen the impact of the Ukraine war by financing vital imports, including for dairy production, and seeds for smallholder farmers for the upcoming planting season.
We will continue our efforts and look forward to addressing the challenges together. Thank you.
Watch here: https://youtu.be/GTQKnYojdgg?t=2212