Hunger Stalks Central Asia
Rising Food Prices and Financial Turbulence as Ukraine War Rages On
On March 16, President Kassym-Jomart Tokayev delivered his State of the Nation address in Nur-Sultan, the capital of Kazakhstan. Most of Tokayev’s speech was about the political reforms he had either accomplished or planned to advance after he had promised them as redress to January’s political unrest and protests against the Kazakh government.
He also addressed the impact of the Russia-Ukraine war on Kazakhstan and pointed to the spikes in food prices and currency volatility as some of the worrying economic consequences being faced by the country as a fallout of this conflict.
The address by Tokayev was made four days before the Nauryz holiday, which fell on March 20 and is a new-year festival celebrated by people in the belt that runs from the Kurdish lands to the Kyrgyz lands.
Households across Kazakhstan were preparing for this celebration, although inflation of food prices—which predated the Russian intervention in Ukraine and the resulting Western sanctions imposed on the Kremlin—had already dampened the mood of the festivities in the country.
By mid-March, the National Bank of Kazakhstan had reported that prices of food products such as baked goods, cereals, vegetables and dairy—the important components of a Nauryz meal—had increased by 10%.
“Kazakhstan is facing unprecedented financial and economic difficulties in our modern history due to the escalation of the geopolitical situation,” President Tokayev said. The “harsh sanctions” imposed on Russia by the West are already impacting the global economy, he said, adding, “Uncertainty and turbulence in the world markets are growing, and production and trade chains are collapsing.”
Rising food prices and financial turbulence, the result of both the Western sanctions on Russia and the integration of national economies, have set the alarm bells ringing and seem to have heightened the urgency to resolve these issues in Central Asian countries like Kazakhstan.
Famine and hunger
Tokayev spent part of his State of the Nation address speaking about the inflation of energy and food prices. He spoke about the need for the government to oversee the production of agricultural equipment, fertilizers, fuel and stocks of seeds.
Tokayev’s remarks are not novel. Other heads of governments in Central Asia have similarly expressed the need for their governments to enter the food-production arena, since both the attempts to contain Covid-19 and the current Russian war in Ukraine have demonstrated the enormous vulnerabilities in the global food chain, exacerbated by the privatisation of food production.
Food prices in the Eurasian Economic Union (EAEU)—comprising Armenia, Belarus, Kazakhstan, the Kyrgyz Republic and Russia—continue to rise as a result of the Russia-Ukraine conflict, outpacing world food prices. While these countries are “strongly dependent on imports from Russia,” they are now facing a temporary ban on exports of wheat and sugar from Russia owing to the conflict.
On March 11, the United Nations World Food Program released a report on the “Food Security Implications of the Ukraine Conflict.” The conflict, says the WFP, “comes at a time of unprecedented humanitarian needs, as a ring of fire circles the Earth with climate shocks, conflict, Covid-19 and rising costs driving millions closer to starvation.”
Russia and Ukraine produce and “supply 30% of wheat and 20% of maize to global markets,” according to the WFP report, and these two countries also account for three-quarters of the world’s sunflower-oil supply and one-third of the world’s barley.
Meanwhile, the Black Sea ports have largely been dormant since Russia has blocked any exports from these ports because of the ongoing war. This has led to “an estimate of 13.5 million tons of wheat and 16 million tons of maize” being “frozen in these two countries,” since these grains cannot be transported out of the region.
The UN Food and Agriculture Organization’s Food Price Index reached “a new all-time high in February.”
The president of the International Fund for Agricultural Development, Gilbert Houngbo, warned that the continuation of the Russia-Ukraine war “will be catastrophic for the entire world, particularly for people already struggling to feed their families,” according to a UN report. “This area of the Black Sea plays a major role in the global food system, exporting at least 12% of the food calories traded in the world,” Houngbo said.
One of the great problems of globalisation has been that the vulnerabilities in one part of the world almost immediately impact other parts of the world.
In 2010, droughts in China, Russia and Ukraine raised the prices of food grains, which then “heightened” the Arab Spring.
Ideas of “food security,” a phrase used by Tokayev during his State of the Nation speech, have been around since the first World Food Conference in 1974; at that meeting in Rome, the member states of the United Nations reflected on the famine situation in Bangladesh and called for measures to ensure international stability of food prices and to make governments responsible for the abolition of hunger in their respective countries.
The current situation of food inflation and food instability in the global commodity chain has refocused attention on the need for ensuring enhanced domestic and regional production rather than placing reliance on distant producers and unstable international markets.
Domestic food production
Last October, the Central Asian Bureau for Analytical Reporting (CABAR) held an experts’ meeting on the problem of food production in the region.
Nurlan Atakanov of the Food Security and Nutrition Program of the Kyrgyz Republic said local farmers were unable to grow sufficiently high-quality wheat “due to limited cultivation areas and climatic conditions.” His country imports a third of its wheat from neighbouring Kazakhstan.
Daulet Assylbekov, an expert from Kazakhstan who is a senior analyst with the BLM Group, meanwhile, said wheat harvests in Kazakhstan decreased by 30% because of the pandemic restrictions. This had an impact on food prices within Central Asia.
Tajikistan’s wheat yield is currently 2,700-3,000 kilograms per hectare, far short of the yield in Russia’s Rostov region of 6,700-7,000kg per hectare, according to CABAR.
Economist Khojimahmad Umarov said during the meeting that if Tajikistan had access to mineral and organic fertilizers and if it improved its agricultural knowledge, yields could rise to 9,000kg per hectare.
But agriculture has been neglected, and countries like Tajikistan have been encouraged by the International Monetary Fund (IMF) to import food and export cotton and aluminium.
Uzbekistan’s Ministry of Agriculture has now urged its farmers to increase the production of wheat from 6.6 million metric tons of grain in 2021 to 7.6 million tons this year as well as to enhance the domestic production of sugar to meet the country’s internal demand despite the temporary ban on exports by Russia; Uzbekistan has traditionally relied on Russian wheat and Brazilian sugar.
Meanwhile, like Uzbekistan, the government of the Kyrgyz Republic imports sugar, vegetable oil and wheat from other countries, and the current Russia-Ukraine war could result in a bleak situation in terms of ensuring food security and curbing inflation of food prices in the Kyrgyz Republic.
At the start of the war in Ukraine, the poorest households in the Kyrgyz Republic—the second-poorest country in Central Asia after Tajikistan—spent 65% of their income on food; the current inflation will be catastrophic for them.
The Kyrgyz Republic’s Cabinet of Ministers, led by Akylbek Japarov, held an emergency meeting with food-processing companies in Bishkek to discuss how to increase food production and prevent increased levels of starvation in the country.
At the Antalya Diplomacy Forum this month, leaders of the Central Asian countries called not only for a cessation of hostilities in Ukraine but also for regional integration of their countries with South Asia.
Uzbek Foreign Minister Abdulaziz Kamilov said his country is eager to play the role of a bridge to unite these areas. The general verdict among countries in Central Asia is that greater self-sufficiency is important, particularly in food production, but also that regionalism needs to be emphasized.
One of the problems with regional integration in Central Asia is that there are very poor options for the transportation of goods from one country to the other. Kazakh wheat travels by train to the Kyrgyz Republic and then is transferred onto trucks to traverse tough mountain roads. Regionalism is not simply a concept. It has to be realized through the creation of food-processing plants, better transport systems and easier cross-border trade rules.
The Covid-19 pandemic and Russia’s war on Ukraine have alerted the governments of Central Asia to pay much more attention to the question of food security. What the IMF says about the liberalisation of food chains makes little sense these days.
Worries of starvation and bread riots resulting from the Russia-Ukraine conflict and the ongoing pandemic are a good wake-up call for countries to focus on finding more sustainable local and regional solutions and to solve problems that have been part of the economic, social, and political fabric of Central Asia for decades.
This article was produced by Globetrotter.
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