Arab Government’s Response to Food Price Crisis Cannot Be Sustained
Arab governments tempered public anger at rising food prices by increasing wages and subsidies, but their approach is not sustainable without raising taxes. Instead they should revise agricultural policies, expand social safety nets, and curb excessive energy consumption, argues Carnegie Middle East Center economist Ibrahim Saif.
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Published on Jun 25, 2008
BEIRUT, June 23—Arab governments tempered public anger at rising food prices by increasing wages and subsidies, but their approach is not sustainable without raising taxes. Instead they should revise agricultural policies, expand social safety nets, and curb excessive energy consumption, argues Carnegie Middle East Center economist Ibrahim Saif.
The ability of governments to raise the salaries of large numbers of public sector employees prevented food protests from worsening but fueled significant inflation, which governments can do little to curb.
Arab governments should introduce efficient farming techniques and provide incentives such as tax breaks and easy loans to increase domestic production and create jobs in rural areas.
Developed nations should share agricultural techniques and best practices for public food procurement rather than cash assistance.
He concludes:
“In the short run, there is no quick fix for the crisis created by rising food prices. Particularly in non-oil producing countries, there remains a real danger that people will take to the streets in increasing numbers when they see their livelihoods threatened. And in the Arab countries, the consequences of discontent and anger can easily acquire a geopolitical angle.”
Ibrahim Saif is a resident scholar in economic policy at the Carnegie Middle East Center in Beirut, Lebanon. He specializes in the political economy of the Middle East. He has served as a consultant to international organizations such as the World Bank, the International Monetary Fund, and the International Labor Organization. He is a fellow with the Economic Research Forum and a member of the Global Development Network. Before joining Carnegie, Saif was the director of the Center for Strategic Studies at the University of Jordan.
The Carnegie Middle East Center is a public policy think tank and research center based in Beirut, Lebanon. Bringing together senior researchers from the region, the Carnegie Middle East Center aims to better inform the process of political change in the Middle East and deepen understanding of the issues the region and its people face.
The Carnegie Middle East Program combines in-depth local knowledge with incisive comparative analysis to examine economic, socio-political, and strategic interests in the Arab world. Through detailed country studies and the exploration of key cross-cutting themes, the Carnegie Middle East Program, in coordination with the Carnegie Middle East Center, provides analysis and recommendations in both English and Arabic that are deeply informed by knowledge and views from the region. The Carnegie Middle East Program has special expertise in political reform and Islamist participation in pluralistic politics throughout the region.
The Arab Reform Bulletin addresses political reform in the Middle East. Sent monthly, it offers analysis from U.S.-based and Middle Eastern political experts in English and Arabic, as well as news synopses and resource guides.
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
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