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Wednesday 23 Aug 2017 | 18:12 | SYDNEY

Middle East: Get thee to a bakery

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30 June 2008 10:39

An announcement last week by the Lebanese economy ministry that it would increase state subsidies on flour to maintain the price of Arabic bread highlights what is a real problem in the Arab world – the increasing cost of government food subsidies. While flour subsidies cost the Lebanese Government about $60 million annually, this is dwarfed by the Egyptian annual flour subsidy bill of $3.5 billion, a system which brings with it its own problems over and above the drain on the state coffers, as this article illustrates. 

While much attention in the West has been paid to the unrealistic efforts of Islamists to bring down autocratic regimes in the Middle East, there is much less attention on the threat posed to these same regimes from popular unrest caused by price hikes of food staples like bread. In 1988, the Jordanian Government faced widespread rioting in the south following an IMF-inspired reduction in flour subsidies that sent the price of bread soaring. Dozens were killed in Egypt in riots in 1977 over the same issue, and bread riots continue at regular intervals over the issue of subsidies, including one this month. North Africa and other Arab countries have faced the similar problems.

In light of growing populations in the Arab world and a greater reliance on increasingly expensive imported flour, food shortages rather than radical Islamists are likely to be the biggest threats to regime survival in the future.

In an interesting corollary to the issue of Arab flour subsidies, the Saudi Government earlier this year announced the end of its ambitious 30-year old plan to grow wheat in the desert. The scheme was using too much of the kingdom’s scarce water resources, and all wheat will be imported once the scheme has ceased.

Photo by Flickr user Julien Harneis, used under a Creative Commons license.

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