In North Africa, Ukraine War Strains Economies Weakened by Pandemic

CAIRO — On the way to the bakery, Mona Mohammed realized Russia’s war on Ukraine might have something to do with her.

Ms. Mohammed, 43 years old, stated that she doesn’t pay much attention to the news. However, as she walked through Sayyida Zeinab, a working-class neighborhood in Cairo, on Friday morning, she heard a few people complaining about the fact Egypt imports the majority of its wheat from Russia or Ukraine.

War meant less wheat, war meant more wheat. War meant that Egyptians who were already struggling to make ends meet due to rising prices might soon have more to pay for round loaves aish balancedi, which are country breads that provide more calories and protein to their diet.

“How much more expensive can things get?” Ms. Mohammed said as she waited to collect her government-subsidized loaves from the bakery

Russia’s invasion of Ukraine this week threatens to further strain economies across the Middle East already burdened by the pandemic, drought and conflict. As usual, the poorest have had it the worst, reckoning with inflated food costs and scarcer jobs — a state of affairs that recalled the lead-up to 2011, when soaring bread prices helped propel anti-government protesters into the streets in what came to be known as the Arab Spring.

Anxiety at the bakeries can spell trouble in a region where bread is a staple food that feeds hundreds of millions of people.

In Egypt, the world’s top importer of wheat, the government was moving in the wake of the Russian invasion to find alternative grain suppliers. The Ukraine crisis was set up to increase inflation in Morocco, which was already suffering from the worst drought in 30 years. This has prompted protests to break out. Tunisia was already struggling to pay for grain shipments before the conflict broke out; the war seemed likely to complicate the cash-strapped government’s efforts to avert a looming economic collapse.

According to data from International Monetary Fund, the price for wheat rose 80 percent between April 2020 and December 2021. According to Sara Menker (chief executive of Gro Intelligence), an artificial intelligence platform that analyses global climate and crops, North Africa and Middle East are the largest buyers of Russian wheat.

“This has the potential to upend global trade flows, further fuel inflation, and create even more geopolitical tensions around the world,” she said.

After years of mismanaging their water supplies and agricultural industries, countries like Egypt, Algeria, Tunisia and Morocco cannot afford to feed their own populations without importing food — and heavily subsidizing it. The Arab world’s undernourished population has increased in recent years due to an increase in food imports and a shortage of arable land.

The war will not only affect the price of bread but also raise interest rates and make it more difficult to access credit. This would force governments to quickly spend more to service their high-debts and reduce spending on essential services such as health care and education. Ishac diwan, an economist who specializes in the Arab world at Paris Sciences et Lettres university, said that this would be a significant impact on the price of bread.

He predicted an increase in economic pressure on Egypt. Jordan, Tunisia, Jordan, and Morocco. He warned that Egypt’s banking sector could be in danger, especially Tunisia, which holds a large amount of the public debt.

Egypt is also heavily dependent upon tourism from Russia, which has helped it recover from the Covid-19 pandemic. This gives the country additional cause for concern.

Over the past month, Egypt’s pasta prices have risen by a third due to global inflation and supply chain issues resulting from the pandemic. Oil for cooking was up. Meat was up. Nearly everything was up.

The most important thing is bread. Bread has risen in cost at non-subsidized bakeries by around 50 percent over the past four month. A five-pound note (30 cents) now only buys seven loaves of bread.

According to the Food and Agriculture Organization (a United Nations agency), Egyptians rely on bread for a third their calories and 45 per cent of their protein.

Officials from Egypt claimed that the country had enough grain reserves and domestically grown wheat to last it until November. A rising cost of imports led President Abdel Fatteh el-Sisi to announce that Egypt would increase its subsidized bread prices for the year ahead, causing public fury.

“Of course I’m worried,” said Karim Khalaf, 23, who was collecting and stacking baladi loaves as they slipped out of the oven, steaming slightly, in a bakery in Sayyida Zeinab on Friday morning. “My salary hasn’t changed, but now I’m spending more than I’m making.”

Morocco, where the important agricultural sector employs approximately 45 percent of the workforce, is currently facing an economic crisis. This has been caused by global inflation, an increase in food and oil prices, as well as the worst drought in 30 years.

The anti-government protests that broke out on Sunday indicated that many Moroccans are losing patience with their six-month old government, as they struggle to make ends meets two years after a pandemic that decimated once-lucrative tourism.

“I hustled for a long time and I was patient, but I am left with nothing,” said Mina Idrissi, 48, who attended a protest in the capital, Rabat, and who works several jobs, including as a housekeeper, in the nearby city of Sale. “For two weeks, I couldn’t even afford to buy cooking oil. Does this government not realize that we are suffering?”

A series of videos that circulated on Moroccan social networks in the weeks preceding the protests only served to intensify the sense of despair. One video showed people rioting at the prices of food in a market near Rabat.

Morocco’s was a foreseeable crisis, experts said. Located in a climate change hot spot, the country’s rainfall has dwindled dramatically in recent years, and may decline by 20 to 30 percent by the end of the century, according to the World Resources Institute.

“It’s a simple reality that has been ignored for decades,” said Najib Akesbi, an economist in Rabat.

The government has responded with Band-Aids.

Last week, the royal court announced a $1Billion plan to ease the drought’s effects on farmers through financial aid, water management, as well as livestock food supply.

But analysts said such measures would not compensate for decades of misguided economic management that prioritized water-intensive industries and produced food for export while leaving the rest of the country dependent on imported wheat — some of it from Russia and Ukraine — and other food.

No Middle Eastern nation wants Lebanon to collapse like it did. The country’s currency and economy have been in a state of disarray since late 2019. Lebanon imports more than half of its wheat from Ukraine, and is already talking to other countries like India and the United States about wheat purchases, the country’s economy minister, Amin Salam, told Reuters on Friday.

The bread price has risen already due to the recent turmoil in the country. The government has reduced subsidies for a range goods to help offset the effects of the economic crash. Bread, for example, now costs five to nine times more in summer 2019 than it did in summer 2019.

Analysts have warned that the Arab Spring’s economic turmoil could make it more vulnerable to social unrest.

In Tunisia, where food prices have climbed as public finances wobble, President Kais Saied is struggling to maintain his popularity after seizing power last summer with promises to fix Tunisia’s economy. The government is desperate to receive an International Monetary Fund rescue, but such a deal could force it to take unpopular steps like cutting public wages or subsidizing.

Egyptians, who were beaten down by the economy, attempted to rebuke Mr. el Sisi in a series anti-government demonstrations that took place in September 2019, but were quickly stopped. Despite the difficulties, many people have made peace with what is happening over the years thanks to government repression.

“We’ll have to resort to welfare, which is basically begging,” said Osama Ezzat, 60, a day laborer who was pushing cardboard boxes in a hand cart past the Sayyida Zeinab bakery on Friday. “It’s tough, but when you compare us to countries around us, at least we’re stable.”

Vivian YeeReport from Cairo Aida AlamiMorocco, Rabat Nada Rashwan contributed reporting in Cairo. Ben HubbardAnd Hwaida SaadFrom Beirut, Lebanon Ana SwansonWashington