{"id":26379,"date":"2017-11-15T22:16:53","date_gmt":"2017-11-16T03:16:53","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/can-egypt-weather-the-next-round-of-high-wheat-prices\/"},"modified":"2017-11-15T22:16:53","modified_gmt":"2017-11-16T03:16:53","slug":"can-egypt-weather-the-next-round-of-high-wheat-prices","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/can-egypt-weather-the-next-round-of-high-wheat-prices\/","title":{"rendered":"Can Egypt Weather the Next Round of High Wheat Prices?"},"content":{"rendered":"

 <\/p>\n

Beginning in 2010, a wave of protests across the Arab World toppled governments that had previously appeared impenetrable. The causes of these protests would be too numerous to list and elevating a single cause as the <\/em>cause would be impossible. However, social scientists have demonstrated that climate change played a significant role in stirring social demonstrations through producing high wheat prices caused by volatile weather patterns in Russia and the Ukraine.[1]<\/a> Despite this recent history, the Egyptian government today is avoiding the challenges posed by climate change, including the threat of more unreliable global wheat supplies.<\/p>\n

With nearly 100 million people and 4% arable land, Egypt is one of the most densely populated countries in the developing world for its population size.[2]<\/a> Due in part to these variables, Egypt imports more wheat than any other country in the world, and its domestic production only meets half of the country\u2019s demand for wheat. According to an Egyptian 2011 government report, the productivity of most agricultural products, including wheat, is expected to decline by 9-20% due to higher salinity (62) and higher risk of droughts.[3]<\/a> Therefore, climate change will likely cause Egypt to become even more dependent on foreign wheat imports.<\/p>\n

Due to population demands and a domestic industry crushed by corruption and state incompetence,[4]<\/a> Egypt is turning even more to imports to meet its citizens\u2019 demands for wheat. The Egyptian Ministry of Supply recently announced imports of 7 million tons of wheat in 2017-2018, compared to 5.6 million tons in 2016-17 and 4.4 million tons in 2015-2016.[5]<\/a><\/p>\n

Egypt\u2019s recent political turmoil has exacerbated economic challenges and the last few years have witnessed a growing unemployment rate coupled with a significant devaluing of the Egyptian pound. Egypt\u2019s current administration has been blessed with low wheat prices (see Exhibit 1 below), but even with these low prices they nearly had a shortage in 2016.[6]<\/a> The cost of the government\u2019s wheat subsidy prior in 2010\/2011 was 0.8% of Egypt\u2019s GDP, and if prices returned to the highs of that period then they will be facing an even greater cost than at that time.[7]<\/a><\/p>\n

Exhibit 1<\/p>\n

\"\"<\/a>[8]<\/a><\/a><\/p>\n

<\/a><\/p>\n

Egypt\u2019s imports of wheat are managed by the Ministry of Supply. The current government do not seem to have planned effectively for the likelihood of higher and more volatile wheat prices. In 2011, Egypt published a detailed \u201cNational Strategy for Adaptation to Climate Change,\u201d[9]<\/a> however the recommendations made in that document do not seem to have been adopted by the government that rose to power in 2013. The ambivalent attitude of the current administration to climate change mitigation is perhaps best demonstrated in their vague and generic contribution to the United Nation Framework Convention on Climate Change.[10]<\/a><\/p>\n

I recommend that Egypt\u2019s Ministry of Supply adopt the following steps:<\/p>\n