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U.S. should act to curb the food and fuel crises in Europe, Mideast

By David Rundell and Michael Gfoeller - InsideSources.com | Jul 28, 2022

The foremost result of President Biden’s meeting with Saudi Arabia’s Crown Prince Mohammad bin Salman is that it happened. No one should have expected much more than the hesitant restart of a valuable, but damaged, relationship.

Nobody should have expected Saudi Arabia to break the OPEC production quotas unilaterally. No one should have expected a breakthrough in the Arab-Israeli conflict when Israel has no government. No one should have expected an end to the war in Yemen while Iran still encourages and arms the Houthis.

But we could have hoped for a clear plan to avoid the approaching food and energy catastrophe in the Middle East and the migration tsunami that is likely to follow.

Russia and Ukraine exported 50 million tons of wheat in 2021, about 25 percent of global wheat exports. Many nations — including Egypt, Pakistan, Saudi Arabia, Libya, Lebanon, Oman, Eritrea and Somalia — receive more than half their wheat imports from these two producers. In the case of Egypt, these imports amount to 60 percent of total wheat consumption. According to the U.N. Food and Agriculture Organization, a 20 percent reduction in wheat shipments from Russia and Ukraine will lead to an increase of between 500,000 and 1 million significantly undernourished people in the Near East and far more in sub-Saharan Africa.

This human tragedy is unfolding before our eyes. Ukraine sea mines and the Russian navy hamper shipments of last year’s wheat crop. Combat in the Donbas is disrupting this year’s harvest. Western economic sanctions will likely limit the import of crucial seeds and pesticides for next year’s crop.

Total Ukraine grain exports — wheat, barley, corn and sunflower oil — have fallen from last year’s monthly average of 5 million tons to only 2 million tons last month. Russia is re-orienting its wheat exports toward Iran. As sanctions on Russian fertilizer exports raise production costs around the globe, the specter of hunger is stalking many Arab states.

Russia’s invasion of Ukraine did not disrupt energy markets. The Western response has driven oil prices to more than $100 per barrel. From Morocco to Egypt to Lebanon, economic sanctions on Russia have led to massive price increases for cooking oil, natural gas, gasoline and diesel fuel.

Egypt’s oil import bill alone has risen by $700 million a month since February. As inflation soars, government budgets across the Middle East are being stretched to breaking point to maintain food and fuel subsidies. For example, in Egypt, where inflation is running at 13 percent, the annual budget deficit increased by almost $25 billion overnight.

The inevitable result of collapsing economies and political unrest in the Middle East and Africa will be massive, and illegal migration into Europe will be far greater than the previous war-related emigration from Syria and Libya.

Preventing that outcome will require immediate, large-scale, well-coordinated, multinational action. It will require far more than a token increase in foreign aid that will merely bid up the price of existing wheat supplies. It will require efforts to increase the Middle East’s grain production, diversify the region’s grain suppliers, open international food stocks, and provide concessional import financing for fuel and food.

It will also require some creative thinking. Saudi Arabia was once a major wheat producer, and while that is not a sustainable practice in the long run, it could help solve a temporary crisis. The United States produces 380 million tons of corn annually and converts 40 percent of it into ethanol for gasoline blending. That corn could be exported to feed hungry people and could be replaced by Brazilian ethanol, which comes from sugar cane and is, in fact, cheaper than the American corn-based version. All President Biden needs to do is to reduce the tariff keeping cheap Brazilian ethanol out of the American market.

The United States can play a central role in resolving the Middle East’s food and fuel crisis, and it is in America’s own interest to do so. Nothing is more important than maintaining regional stability. Nothing could re-establish American influence in the region more quickly. Nothing could do more to alleviate imminent human suffering. Seriously addressing food security would have been a significant achievement. It should have featured very prominently on the president’s agenda in Jeddah. Unfortunately, it did not. But it’s not too late to make the necessary changes.

David H. Rundell is the author of “Vision or Mirage, Saudi Arabia at the Crossroads” and former chief of mission at the U.S. Embassy in Saudi Arabia. Michael Gfoeller is a former political adviser to the U.S. Central Command. They wrote this for InsideSources.com.

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