Like most Gulf nations, the United Arab Emirates (UAE) has little agricultural resources, forcing it to import the majority of its food supply. The oil-rich country brings in roughly 80% of its supply; Dubai, its most famous Emirate, imported over 4 million tons of food in the first half of this year alone.
Its neighbors are similarly active in the food market. In September, Iran became the biggest buyer of Brazilian beef for the first time in its history. Such dependence is projected to only rise with time. According to the World Bank, the Arab region’s need for food imports is expected to increase by almost 64% over the next 20 years.
As a result, these Gulf economies and the region as a whole have found themselves particularly vulnerable to rapid global food price increases. The United Nations reported in September that its world food price index climbed 19% from last year.
The increases have translated into higher costs at grocery store across the region. In the UAE, a survey by Gulf research group YouGov Siraj of more than 1,500 residents found that over a quarter had been paying more for meat and fresh vegetables in the past six months. A summer survey by Middle East job site Bayt.com reported that after housing, 40% of respondents said their biggest monthly expense was grocery bills.
Even in Qatar, which the International Monetary Fund recently named the world’s richest country in terms of per capita wealth, there is local concern about the price of food going up — prompted partially by the Qatari government’s recent announcement that it would hike salaries for nationals working in the government sector by 60%.
The World Bank study notes that the Middle East and North Africa consume 30% of the world’s wheat. Any rise in the cost of bread, cereal and rice falls hardest on the largely South Asian expatriates in the region’s laborer class, where a worker’s monthly wages often do not exceed $200 a month.
In response, Gulf governments have taken two different actions. Some are applying economic controls, mandating grocery stores in their countries to freeze prices of certain foodstuffs. In the UAE, hundreds of goods are price fixed until the end of the year. A number of international food companies have questioned the measure, including Unilever and Kraft.
Additionally, some Gulf nations are buying foreign land for food production. The UAE, Saudi Arabia and Qatar have made investments or have purchased freehold farms across the world. According to a study by Washington, D.C.-based International Food Policy Research Institute, the UAE is behind only China and South Korea as one of the top purchasers of global farmland.
There is added incentive for Middle Eastern governments to ensure that food prices remain at a low cost. A number of academic reports suggest that rapid food price increases in the region had a role to play in the popular discontent that led to the Arab Spring — unrest that Gulf countries such as Saudi Arabia have allocated billions in social spending to prevent from happening within their own borders.
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