Rising food prices may spur Arab unrest, warns World Bank

Millions in poverty worldwide as prices of basic food items soar, seen as trigger factor in Arab protests
Price hikes could push thousands across the Arab world into extreme poverty, the World Bank said
By Claire Ferris-Lay
Thu 17 Feb 2011 05:16 PM

Rising
food prices have pushed an estimated 44 million people into extreme poverty
since June and could spur fresh political unrest in the Middle East, the World
Bank has warned.

The
bank’s food price index, which measures a basket of food commodities, increased
15 percent from October to January. Prices are now just three percent below
their 2008-peak, which sparked food riots across many poor nations including
Egypt and Yemen.

“Global food prices are rising to dangerous levels and threaten
tens of millions of poor people around the world,” said Robert B. Zoellick, group
president of the World Bank.

“The price hike is already pushing millions of people into
poverty, and putting stress on the most vulnerable, who spend more than half of
their income on food.”

The soaring cost of basic food items was seen as a trigger factor
in the political unrest sweeping the Arab world, toppling leaders in Tunisia
and Egypt. Zoellick said the rising prices may aggravate the situation.

“I'm
concerned that higher food prices add to stress points and could add to the
fragility that is already there anytime you have revolutions and transitions,”
he told reporters at a press conference in Washington.

Wheat prices have almost doubled while the cost of maize increased
73 percent between June and January, said the bank. Sugar and edible oils have also gone up
sharply. 

In 2008, the bank warned 100 million people would be pushed into
extreme poverty - which it defines as living on less than $1.25 a day – if food
prices continued to rise.

Following
the 2008 food crisis many Gulf states, which import vast amounts of food for
their growing populations, looked to acquire agricultural land abroad in a bid
to increase food security and damp inflation.

In
May 2008, the UAE private equity firm, Abraaj Capital, said it was working with
the government to secure agricultural investments in Pakistan. Other large
deals include Saudi’s acquisition of 500,000 hectares of land in Tanzania, and
the UAE’s purchase of 400,000 hectares in Sudan.

According
to the International Food Policy Research Institute, up to 20 million hectares
of farmland has been offered up to foreign buyers since 2006, at a value of up
to $30bn.

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