Experts have been pointing out for years that the North African region is a “hotspot”, and that the risks associated with temperatures already above the global average, would be higher (1.5 degrees by 2035, with the possibility, without a radical policy change, of reaching 2.2 degrees in 2050).
Rainfall is expected to decrease and temperature to rise, which will have a direct impact on water resource capacities. Climate models show that these trends will strengthen over the future years.
As the agricultural sector is the main consumer of this resource, agricultural production – and therefore the supply to consumers – will be directly affected.
Agricultural lands are largely located in the arid and semi-arid area, representing 85% of the total land area (excluding the Sahara), and will now be increasingly subject to frequent droughts and climatic accidents.
This diagnosis, widely shared by the National Climate Plan (PNC) adopted by the authorities in 2018, has not been followed up, and the climate change adaptation measures adopted by the PNC are far from being implemented.
A major challenge, therefore, arises in a country where the orientation given to policies is aimed at a further intensification of the modes of exploitation of natural resources: how in these conditions to increase agricultural production while preserving natural resources strongly threatened in the future by ongoing climate change?
Secondly, there is the economic shock caused by the rise in world prices for basic agricultural products, which are very heavily consumed by the population (cereals, milk, edible oils, and sugar).
The market crisis and the rises in commodity prices in the spring of 2020 were accentuated by the Russia-Ukraine conflict that began on 24 February 2022.
Soft wheat prices, which hovered around $200 per tonne in the years 2011-2012, reached amounts that are around $290 per tonne in the last quarter of 2021.
The health crisis was a trigger for this market crisis and this with, on the one hand, the consequence and the weight exerted by imports from China – which became the world’s leading importer of agricultural and agri-food products during 2020/2021 season – and on the other hand, the rise in transport prices combined with temporary export restrictions implemented in several exporting countries (Russia, Poland, Romania, Bulgaria, Argentina, India…).
Since the beginning of the war, soft wheat has increased by 50% to $450 per tonne. World prices for vegetable oils increased by 23%, sugar by 7%, and meat by 5%.
Algeria will thus buy at the end of February 2022, 600,000 tons of milling wheat, of French origin at $ 485 per ton (cost and fees) to load March-April 2022.
Egypt, the world’s largest importer of soft wheat, will acquire 240,000 tons of French soft wheat for loading at the end of May, at $492.25 per tonne.
The featured image is of Workers harvesting wheat in a field on the outskirts of Berouaguia, southwest of Algiers. (Reuters)
Climate change affects all countries, especially those with high agricultural production and equally those with lower production. The ingenuity of the producers of the first countries could not oppose any remedy to this phenomenon. Without wanting to be disillusioned because of this, everyone knows that only a global movement of all the world’s populations could turn this upside down or the other way around.
So, the question would be how to proceed to ensure that the people of the world act the same and at the same time, for a fairly long period. For many specialists, this period would be forever.
The United Nations has already been working on this with its sustainable development agenda with a program based on 17 clearly defined goals.
These goals would be to transform our world from sustainable development through the action of all countries – poor, rich, and middle-income – to protect the planet while promoting prosperity.
They recognize that ending poverty must go hand in hand with strategies that develop economic growth and address a range of social needs, including education, health, social protection, and employment opportunities while addressing climate change and environmental protection.
The problem is that the planet does not expect its inhabitants to start from a common agreement to push in the same direction.
More virulent phenomena such as desertification, and scarcity of groundwater that mainly due to reductions in precipitation in all climatic areas of the globe. Paradoxically, there is the fact that seawater levels tend to rise above their normal level as known in recent centuries.
Apart from what is said above, there is a much greater impact. This is kept away from direct attention.
It is the one that affects those important agricultural producing countries that with this global warming would tend to lose their level of production at the expense of those other countries whose lands froze for centuries and who would see them suddenly turn into arable land. Conversely, countries whose subsistence production enabled these to go through millennia might be likely to face up to survival of the fittest span of time.
Are we being on the verge of yet another phenomenon consequent from climate change? It would be that of a new swing in the hierarchy of food producers of the world? The question that has not been asked so far still deserves attention. That of each and every one.
As the pandemic-fuelled liquidity begins to wane and the reality of inflation and higher interest rates sets in, many economies will face considerable challenges. Middle East and North Africa (MENA) countries are vying to attract global investors and increase Foreign Direct Investment (FDI). Yet, capital flows are reversing from emerging to developed markets—specifically in the United States, where interest rates are rising to levels not seen since 2018. The year 2018 is illustrative: during that time, emerging markets experienced substantial capital outflows as international investors reduced their exposure and consolidated their risk into emerging economies with fewer perceived risks, given their proactive and progressive economic policies.
Attracting foreign investors into emerging market economies has always been difficult. Nevertheless, thanks to the extended period of near-zero interest rates, emerging markets were blessed with investors hungry for higher returns. The plentiful supply of money coupled with historically low yields in rich countries led investors to explore higher yields in riskier markets across various assets, including public equities, public debt, private equity, and venture capital. The lower cost of capital allowed investors to finance opportunities that otherwise would have been unfeasible.
Unfortunately, the party is over, and the pain is just beginning. The US Federal Reserve has started an aggressive interest rate hiking campaign, which will likely be the sharpest rise in interest rates since former chair of the Federal Reserve Paul Volcker’s war on inflation from 1979 to 1982. Many economists believe this will likely lead to a recession in the world’s biggest economy.
A US economic slowdown or a recession couldn’t come at a worse time for emerging markets, particularly those in MENA, where most are fighting chronic unemployment, especially among youth and women, slowing growth, and higher debt levels. Large oil-exporting countries in the Gulf Cooperation Council (GCC) — such as Qatar, Saudi Arabia, and the United Arab Emirates (UAE) — are better positioned given heightened commodity prices. However, their lack of interest rate autonomy given the dollar peg limits their ability to deviate their monetary policy from that of the United States.
Additionally, the global demand destruction cannot be ignored as the post-pandemic surge in demand levels off, with consumers beginning to feel the pinch from inflation and rising interest rates. This may put a damper on global energy demand and tourism. Inflation also impacts global emerging markets, causing a perfect storm for the arrival of tough economic times. Currency depreciation against the dollar is increasing the cost of imports and repaying foreign currency debts for banks, companies, and governments, many of which racked up significant debt during the pandemic.
Research suggests that the impact of US monetary tightening on emerging markets will vary depending on the factors for the change. Interest rate hikes driven by US economic expansion will likely lead to positive spillover effects that benefit more than hurt emerging markets and, therefore, are neutral on capital flows. On the other hand, interest rate hikes to fend off inflation will likely lead to emerging markets disruption. Here, there are two key points to mention. First, there is a more significant effect on emerging markets from rising interest rates due to inflation than those due to growth. Second, emerging economies with stable domestic conditions and policies tend to fare better and experience less volatility. In a global economic environment with slower growth, higher cost of capital, and a shrinking capital pool for riskier assets, discerning international investors will consolidate their investments in the highest-quality emerging markets.
The Goldilocks moment experienced in markets over the past couple of years is subsiding. Geopolitical risk, inflation, and US interest rates are all rising. In addition, two crucial macroeconomic trends will impact the future capital flows to emerging markets. First, globalization policies that have focused overwhelmingly on cost efficiency and rationalization will now focus on resiliency and values-based investments. At an Atlantic Council event on April 13, US Treasury Secretary Janet Yellen articulated a blueprint for US trade policy, stating, “The US would now favor the friend-shoring of supply chains to a large number of trusted countries that share a set of norms and values about how to operate in the global economy.”
Second, Environmental, Social, and Governance (ESG) issues are gaining more attention with countries and companies putting them on the agenda. For an indication of what’s to come, consider Total, the French oil and gas giant, marking its shift to renewable energy and rebranding to TotalEnergies, as well as Engine No. 1, a US impact hedge fund, hijacking ExxonMobil’s board to drive a green strategy at the company. As a result of the confluence of these complex issues on top of challenging macro-economic concerns, investor appetite for emerging market assets is weakening. It will become more discerning in the coming years.
But all isn’t lost. There will be divergent outcomes and risks depending on the domestic conditions of each emerging market. Thoughtful investors will continue to seek opportunities in emerging markets, especially in private markets, where the predominant share of opportunities exists. However, as financial conditions tighten, differentiation between emerging markets will increase. MENA countries can better position themselves amongst others competing for capital by:
Attracting and empowering strong policymakers to make dynamic and bold decisions that complex changes in the global economy require. Deepening the bench of talented policymakers should be another priority.
Driving policies supportive of private sector development and investment. Reducing government-owned enterprises and providing ample space for private companies to grow and prosper on an even playing field is critical to building a dynamic economy.
Continuing to nurture the nascent entrepreneurial ecosystem. Entrepreneurial economies are consistently more resilient and lead to better outcomes over the long term.
Enhancing regional and international economic integration through bilateral and multilateral agreements with more robust economies. Proactive engagement with multilateral financial institutions will also increase financial stability and resilience.
Standardizing policies according to global norms for greater regional and international integration. Investor appetite is greatly improved in emerging markets that adopt regulations and standards from developed countries.
Increasing transparency and reducing uncertainty around laws and regulations. Investors and companies need more clarity on the game’s rules in order to play it confidently and competently.
Several MENA countries continue to take bold steps to improve their global competitiveness. One such example is the privatization programs of government-owned enterprises in Egypt, Saudi Arabia, and the UAE to increase liquidity in local capital markets, improve transparency, and expand private sector participation. Those countries that maintain their momentum will be clear winners in the coming years. History is rich with evidence that economic challenges are followed by periods of historic gains.
Amjad Ahmad is Director and Senior Fellow at the Atlantic Council’s empower ME Initiative at the Rafik Hariri Center for the Middle East.
Announced at the 2022 Arabian Travel Market, the Tourism Authority shares vision to become the region’s most sustainable destination by 2025 with ambitious new approach at the heart of the Emirate’s tourism strategy.
New Delhi, India – Ras Al Khaimah Tourism Development Authority (RAKTDA) announces its bold new approach to sustainability – Balanced Tourism, a key milestone in its strategy to drive overall sector growth and become the regional leader in sustainable tourism by 2025.
Unveiled at the Arabian Travel Market 2022, the region’s leading travel and tourism event, the vision underscores the Emirate’s leadership in conscious tourism and aligns with its identity as a nature destination with a desire to progress, grow and evolve.
Under the all-encompassing banner of Balanced Tourism, the Authority is shaping tourism in the UAE by placing all aspects of sustainability (environment, culture, conservation and livability) at the center of its investment and development strategy. By ensuring issues surrounding ‘over tourism’ – such as over development, crowding of heritage sites, and the spoiling of its unique natural environment – are avoided, it is creating a destination that will resonate with today’s responsible traveller.
Balanced Tourism follows the Authority’s announcement in September 2021 of its Sustainable Tourism Destination Strategy to secure the Emirate’s long-term sustainability and drive overall growth through four key pillars: Sustainable Development; Cultural Conservation; Attractions Built with Purpose; and Community and Liveability.
Raki Phillips, Chief Executive Officer at Ras Al Khaimah Tourism Development Authority, said: “The need for good stewardship of our cultural heritage, environment, people and infrastructure has never been stronger, especially in post pandemic times. Balanced Tourism does exactly that as we become ever mindful of the economic, social and environmental impacts on tourism. Simply put, it’s time to move beyond just using less plastic to adopting an all-inclusive approach – from ensuring new projects such as hotels are developed at an organic pace to building new attractions with sustainability at their core.”
Known as the ‘nature Emirate’, Ras Al Khaimah boasts 64km of pristine beaches, mangroves abundant with wildlife, rolling terracotta deserts, impressive wadis and stunning mountains. These natural assets form the backbone of the destination’s key values, and their protection is a key focus. With this in mind, the tourism board has applied a mindful approach to new hotel developments, consulting with hospitality partners to ensure spacious venues, with thoughtful, sustainable landscaping, and maintaining a measured pipeline, limiting new properties to just two per year, to avoid rapid, less well-planned expansion and overcrowding.
As the licensing authority for all new hotel developments, Ras Al Khaimah Tourism Development Authority is able to set guidelines and protocols to regulate sustainability standards and work closely with hotels to ensure sustainable practices. This includes the recently announced integrated Wynn Resort, scheduled to open in 2026, that will be developed as per the Barjeel Green Building Regulations. There is also Earth Hotels Altitude, an eco-based pop-up hotel concept set to open on Jebel Jais in Q4 2022 featuring 15 fully fitted accommodation units, an activation center and swimming pool, and Saij Mountain Lodge, opening on Jebel Jais in 2023, a protected and sustainably managed mountain resort featuring sustainable lodges made from natural and sustainable materials.
The integrated approach also includes cultural conservation. In addition to being the most fortified Emirate, with over 65 forts due to its importance as a trade route, Ras Al Khaimah is home to four archaeological sites which are tentatively on the UNESCO World Heritage site list, more than any other Emirate. The Authority has established a long-term investment plan to protect and enhance these and other key cultural projects. This includes Suwaidi Pearls Farm, the only site in the UAE which still cultivates local pearls, all done by hand to preserve the Emirate’s culture and traditions. It has also embarked on a three phased restoration program at Jazirah Al Hamra, one of the last surviving pearl diving and seafaring towns of the Arabian Gulf. Scheduled to complete in 2025, experts are working in line with UNESCO guidelines to restore the village, using traditional and sustainable materials, to potentially make it accessible to the public as an attractive tourist destination.
Attractions with Purpose
Under the Balanced Tourism platform, all upcoming attractions will be purpose built with sustainability standards and processes. Visitors can expect environmentally conscious development around Jebel Jais as well as across the more than 20 new sustainable tourism initiatives being developed across the Emirate. One example is the planned Scallop Ranch at Al Hamra Marine, a first of its kind attraction in the UAE that will support and enhance understanding of the marine ecosystem, with seagrass and sea cucumber species within the farm.
Community and Liveability
In addition, Ras Al Khaimah Tourism Authority is also embracing the concept of liveability as part of its Balanced Tourism ethos. This includes several progressive policies in place to promote employee well-being, leading to the Authority to be named the sixth best workplace in the UAE by Great Place to Work® for 2022 in the Small & Medium Organisations category, the highest placed government entity. It was also named one of the Best Workplaces for Women and a Great Place to Work in 2021, the first and only organization in Ras Al Khaimah to be awarded this certification. The Authority has also introduced RAKFAM, a series of initiatives aimed at enriching connectivity, community life and facilities for tourism sector employees in the Emirate.
Sustainability as a driver of growth
Led by the Authority in December last year, government entities, hotels and private sector industries came together at the 2021 Global Citizen Forum in Ras Al Khaimah to pledge collectively to deliver the Emirate’s Sustainable Tourism Destination Strategy that will see it become the regional leader in environmentally conscious tourism by 2025. Led by the Authority
Providing a framework for action across a diverse program of activity, the guiding principles include:
Protecting and enhancing the Emirate’s cultural and natural heritage
Delivering new sustainable tourism developments
Working with business, government and community partners to ensure economic returns from tourism investment and the development of human capital
Regular measurement and benchmarking
Minimizing energy, water usage and waste generation across the destination
Respecting and safeguarding local culture and communities
The desire to minimize dependency on fossil fuels, improve energy security, and decrease greenhouse gas emissions has prompted governments in the MENA (the Middle East and North Africa) area to commit to meeting aggressive renewable energy objectives. By 2030, MENA countries want to produce between 15% to 50% of their power from renewable sources. A favorable climate for the uptake of renewables, notably solar & wind power, is being created by falling technology costs and an increasing focus on green regulations. However, the MENA region has been reluctant to adopt renewable energy, with a total developed renewable energy capacity of only 10.6 gigawatts (GW) relative to a worldwide total of 2,799 GW by 2020.
ESS (Energy storage systems) will be critical in integrating variable renewable energy (VRE) technologies into power grids. Through capacity firming as well as other ancillary services like frequency and voltage management, ESS will improve the flexibility and stability of the power systems.
ESS offers a variety of services that can be combined to maximize value based on the demands and requirements of the power system and grid. Depending on market needs, these services are rewarded differently. Moreover, to the storage capacity payment, service stacking offers revenue stacking, making ESS’s business case more appealing. Traditionally, power system design has concentrated on increasing power-producing capacity to satisfy rising electrical demand. This has sparked a competition throughout the MENA region to increase power generation, which is primarily based on thermal energy and is growing at a rate of 7% per year. Population growth, subsidies, and the ever-increasing need for cooling and water are all driving up demand. The trend in power system design is toward lower peak loads, which is crucial for MENA nations to minimize the pace and rate of power output capacity addition.
Nations in the region are undertaking steps to increase their energy storage capability, with 30 projects expected to be completed by 2025. Pumped hydro storage (PHS) accounts for 55 percent of the region’s ESS installed capacity, relative to 90 percent globally, while batteries, especially lithium-ion and sodium-sulfur batteries, are predicted to rise from 7% to 45 percent of MENA’s ESS by 2025.
The reasons for ESS deployment differ per area. Ambitious renewable energy objectives encourage Jordan, Egypt, Morocco, and the majority of Gulf republics. This applies mostly to utility-scale FTM (front-of-meter) applications — grid-scale energy storage linked to generation sources or even transmission and distribution (T&D) networks — mainly through renewable energy-plus-storage auctions or even the co-location of solar and wind power plus storage. Currently, FTM applications account for 89 percent of the region’s ESS installed capacity. Significant power supply shortages, on the other hand, provide another push for ESS in countries that experience frequent power outages, such as Iraq and Lebanon. This is largely in terms of behind-the-meter (BTM) solutions, which mitigate the socioeconomic losses linked with blackouts by storing electricity on-premises behind the consumer’s meter.
Despite these factors, ESS deployment in the Middle East and North Africa is currently around 1.46 GW, relative to a worldwide capacity of around 10 GW, or simply below 15% of overall capacity – roughly equivalent to battery storage in the United Kingdom. To expedite ESS and VRE implementation in the region, governments, power utilities, and financial institutions will require to address a number of legislative, financial, and market impediments.
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