Article by David Steven published in World Politics Review on scarcity of resources in Pakistan and what it means for the country. Available from World Politics Review here (subscription should not be required)  (May 2011)

I have spent much of my time in Pakistan over the past few months and have been deeply concerned by signs that an unheralded food emergency is under way. Evidence of rising prices is easier to find, of course (see my previous posts), but what is less clear is exactly what impact the resource crunch is having on the diets of the poor.

Back in  November, at the Pakistan Development Forum, the redoubtable Shahnaz Wazir Ali, Special Adviser to the Prime Minister on the Social Sectors (a Cabinet post), presented alarming figures suggesting that per capita caloric intake had dropped to 1650 cal/d, with a quarter of the population malnourished. I haven’t yet managed to track down the source of her data or the basis on which it is calculated, but FAO figures put the average in 2007  for least developed countries at 2157 cal/d.

In the media this morning, there are reports confirming that – in rural Sindh at least – a growing number of people are now starving:

Pakistan’s Sindh province, hit hard by last year’s floods, is suffering levels of malnutrition almost as critical as Chad and Niger, with hundreds of thousands of children at risk, Unicef said on Wednesday.

A survey conducted by the provincial government and the UN Children’s Fund revealed malnutrition rates of 23.1 per cent in northern Sindh and 21.2 per cent in the south.

Those rates are above the 15 per cent emergency threshold set by the World Health Organisation and are on a par with some of the poorest parts of sub-Saharan Africa.

Northern Sindh also had a 6.1 per cent severe acute malnutrition rate and southern Sindh had 2.9 per cent, both far above the WHO thresholds.

“We are looking at hundreds of thousands of children at risk,” Unicef chief of communication Kristen Elsby told Reuters

It’s good to hear Unicef ringing the alarm – and Ms Wazir Ali is a powerful advocate in government for the plight of the poor – but this silent emergency provides yet more evidence of how poorly equipped national governments and the international system are even to understand what is happening as the pressure of resource scarcity ratchets up.

Time for someone to join up the dots, I think.

Recently, I wrote about the devastating – and largely unreported – impact that resource scarcity is having on Pakistan’s fragile economy and society. Barely a day goes by without a new data point that illustrates the size of the problem.

Today, for example, the papers report that the two main political parties (the ruling PPP, and its arch opponents, PML-N) have come together to try and fix an economic crisis that they admit has its main roots back in the 2008 resource price spike:

Sources said the government had told almost all parties that most of the economic pressure had built up because of carryover of huge fiscal deficit from the previous government which did not pass on energy prices to consumers even when international oil prices increased from $90 to $147 a barrel and the current government was facing a similar situation. Most public sector corporations have since been bleeding mainly because of this single factor.

Power companies are getting so desperate for fuel oil (which they are using to replace gas, whose shortage has led to an electricity crisis), that they’re signing sovereign-backed contracts for imports on deferred payments, going against the express wishes of the state-run Pakistan Oil Company, and, seemingly, without explicit permission from the government.

In Punjab, meanwhile, grain markets are grinding to a halt, as the government attempts to tax agricultural production in order to plug its yawning fiscal hole and – I suspect – to make it politically easier to raises taxes on urban consumption. Traders are on strike, accusing the government of destroying the ‘backbone’ of the economy.

The impact on ordinary people is marked. The gas shortage is pushing urban residents back towards a reliance on biofuel. “I am purchasing stove to use firewood in the 21^st century thanks to the government,” complains one resident of Rawalpindi.

Fortunately, food shortages are yet to hit one of the citizens of nearby Islamabad: President Zardari. He has his own camel in the Presidential Palace, because he thinks the milk is healthier.

The President House also has a herd of black goats. One goat is slaughtered everyday when Mr Zardari is there.

Earlier, his trusted personal servant, Bai Khan, used to buy a goat from Saidpur village every day, but now a herd has been kept in the presidency to avoid frequent visits to the animal market. The animal is touched by Mr Zardari before it is sent to his private house in F-8/2 for slaughtering.

Good to see one man, at least, taking resilience seriously.

A propos of Richard’s post on how the French used to behave in Cote d’Ivoire, let’s not forget how another member of the Security Council P5 – Russia – is behaving right now. Why, you might wonder, should Russia be blocking moves in the Security Council to step up the international community’s level of intervention in Cote d’Ivoire?  

Concerned about implications for its own restive regions, such as Chechnya, Russia has traditionally sought to thwart Security Council actions regarding nations’ sovereignty. But one western diplomat said Russian considerations over Ivory Coast were “90 per cent about oil, 10 per cent about sovereignty”.

Lukoil, Russia’s second biggest oil producer, has stakes in three deep-water blocks off the Ivorian coast, part of a largely untapped 1,000km oil frontier. Lukoil acquired its interests during Mr Gbagbo’s rule and changes of power in Africa have often been followed by reviews of oil and mineral rights.

On the face of it Pakistan may have bigger things to worry about, but recent weeks have seen it fall out with India over the humble onion:

The pungent vegetable is now at the centre of a mini diplomatic storm that has further soured relations between both countries over the past few days. The Pakistani commerce ministry banned the export of onions across the border by road and rail due to high prices and shortages at home.

Food inflation is running high across South Asia and onion prices are soaring in both Pakistan and India, as the two have had bad harvests of the crop. Reported hoarding and speculation in India have added to the crisis.

Onions are a touchy subject in India and past price hikes have brought down governments. In retaliation, farmers in Indian Punjab have stopped exporting vegetables to Pakistan.

A sideshow, surely, to the really big issues like Kashmir or religious extremism? Maybe not. You can’t spend anytime in Pakistan without noticing the powerful role played by resource scarcity in the country’s politics.

It all goes back to the global food and energy price spike of 2008. According to the IMF, growth had been robust up until that point and government finances were in reasonably good shape.

Conditions deteriorated in mid-2008 with the sharp increase in international food and fuel prices and worsening of the domestic security situation. The fiscal deficit widened, due in large part to rising energy subsidies, financed by credit from the central bank.

As a result, the rupee depreciated and foreign currency reserves fell sharply. Inflation reached 25 percent in mid-2008 [mostly food], causing harm to vulnerable social groups.

The country has never really made it back onto an even keel. The global economic crisis gave Pakistan a little relief, pushing commodity prices sharply lower, but the public finances never recovered.

And as food and energy prices have risen again, Pakistan has been hit by a succession of mini-commodity shocks (the sugar crisis of 2009 and 2010, the flour crisis of 2010). Some estimates suggest that higher food prices have led to a precipitous decline in caloric intake (though robust data is hard to track down).

Gas and electricity are in critically short supply, leading to frequent load shedding, for consumers, business, and industry in winter. Around the major cities, one sees trees being stripped bare by people desperate for heat for their houses and businesses:

Shopkeepers operating in the streets and mohallahs are using pieces of wooden and cardboard crates and other packing material to brace the chill in the air.

Many Lahorites are having ‘bonfires’ even during day time. An empty tin of cooking oil is usually converted into a hearth by making holes in it. Old newspapers, textbooks and copies besides parts of broken furniture are used to make fire as it is hard for many to afford Rs1,200 per 40 kilo fire wood or Rs40-50 per kilo coal.

There are no easy solutions. Pakistan has also been under intense pressure from the IMF and the United States to reduce fuel subsidies, in order to cut its deficit and meet the conditions of its IMF loan.

But its attempts to comply simply fuelled political instability. The PPP-led government came close to falling when it attempted to push up the cost of petrol at the end of 2010. Backing down was the price of getting its junior partner, MQM, back into the coalition late last week.

The result, though, has been unwelcome speculation that Pakistan may on the road to default – a worry that is likely to intensify as oil prices head ever higher.

Inflation is now up to 16%, with food prices expected to rise 20% in December 2010 (year-on-year). In November last year, onions jumped in price by 67% in just one month alone.

As in 2008, many of the drivers of the crisis are regional and global. While the attention of the world is fixated on Pakistan’s struggle with religious extremism. In the background, the struggle for resources seems to be doing as much to push this country towards ruin.

Center on International Cooperation report by Alex Evans on what forms of multilateral cooperation are needed to manage scarcity of resources like land, food, energy and water (November 2010)

Download Report

Next time you meet a Transition Towner who wants to tell you that everyone should localise food production, ask him / her about what happens to the following countries:

Singapore, Djibouti, Bahrain, Kuwait, Guam, Brunei, US Virgin Islands, French Polynesia, Seychelles, Northern Mariana Islands, Andorra, Maldives, Bermuda, Puerto Rico, Qatar, UAE, St Lucia, Cayman Islands, Trinidad and Tobago, Aruba, Grenada, Malta, Kiribati, Oman, Iceland, Micronesia, Bahamas, Jordan, West Bank & Gaza, American Samoa, Solomon Islands, San Marino, Korea (Rep. of), Japan, Marshall Islands, Lebanon, New Caledonia, Mayotte, Egypt, Papua New Guinea, Netherlands Antilles, Israel, Costa Rica, Colombia, Sri Lanka, Palau

…all of which have 0.0 hectares of arable land per person, when rounded to one decimal place, according to World Bank data. (In fairness, any self-respecting Transitioner will probably argue back that with the latest permaculture techniques, they can feed a family of four on a parcel of land the size of a postage stamp – although see this post for some questions about those claims.)

More data from the same source: in 1960, the world had 0.39 hectares of arable land per capita. In 2007, the figure was 0.21 hectares – this even after the effects of massive deforestation to bring more cropland into production. Only four countries have more than 1 hectare of arable land per person: Niger (1.0), Canada (1.4), Kazakhstan (1.5) and Australia (2.1).

And so to a veritable treasure chest for scarcity nerds everywhere: the Atlas of International Freshwater Agreements, brought to you by Oregon State University’s Program in Water Conflict Management and Transformation.

Here’s what you need to know. First, there are currently 263 rivers that either cross, or demarcate, international boundaries. Europe has most of them (69), followed by Africa (59), Asia (57), North America (40) and South America (38).  Here they are on a handy map (larger version at the link above):

Second, you should know that these international river basins account, according to OSU, for nearly one-half of the earth’s land surface; generate roughly 60% of global freshwater flow; and are home to approximately 40% of the world’s population. A taste of the vulnerabilities that come with this:

A total of 145 countries contribute territory to international basins. 33 nations, including such sizeable countries as Bolivia, Chad, the Democratic Republic of the Congo, Niger, and Zambia, have more than 95% of their territory within the hydrologic boundaries of one or more international basins. Perhaps even more significant is the number of countries that share certain individual basins … The Congo, Niger, Nile, Rhine, and Zambezi are each shared by more than 9 countries while the Amazon, Aral Sea, Ganges-Brahmaputra-Meghna, Jordan, Kura-Araks, La Plata, Lake Chad, Mekong, Neman, Tarim, Tigris-Euphrates-Shatt al Arab, Vistula, and Volga basins each contain territory of at least 5 sovereign nations.

Third, the good news. You might think that the quote above suggests that we’re in for a century of water wars. But it’s worth remembering this: “in the largest quantitative study of water conflict and cooperation, researchers at Oregon State University found that cooperative interactions between riparian states over the past fifty years have outnumbered conflictive interactions by more than two-to-one”.  Shared water has to date much more often been a stimulus for cooperation than for competition – a point our buddy Geoff Dabelko also makes consistently. This isn’t a new story, either: “the history of international water treaties dates as far back as 2500 bc, when the two Sumerian city-states of Lagash and Umma crafted an agreement ending a water dispute along the Tigris River”.

But… ah yes, there’s a but. And it is this:

158 of the world’s 263 international basins lack any type of cooperative management framework. Furthermore, of the 106 basins with water institutions, approximately two-thirds have three or more riparian states, yet less than 20 percent of the accompanying agreements are multilateral. Moreover, despite the recent progress noted above, treaties with substantive references to water quality management, monitoring and evaluation, conflict resolution, public participation, and flexible allocation methods, remain in the minority. As a result, most existing international water agreements continue to lack the tools necessary to promote long-term, holistic water management

On top of this, there’s the small matter of climate change to consider – and especially, Cleo Paskal’s observation that “water-sharing agreements, especially those based on a set amount of water, rather than percentage of actual flow, will become problematic as water levels alter dramatically” (Cleo has a new book out, btw). So, lots done – but lots to do.

Duncan Green has been perusing ALNAP‘s report on lessons from past experiences of the aftermath of earthquakes, and has summarised some of the key findings.  This one was especially interesting:

Land disputes will rise: Land-ownership emerges as a critical issue in all earthquake disasters. First, there are property disputes even before the disaster. Will opportunists seize land in the chaos? Will squatters be able to return and rebuild their shacks (even if that is a good idea)? The loss of documentation, the destruction of landmarks, the deaths of property owners, and the need to formalise previously informal arrangements all add a new layer of complexity to existing land-ownership issues.

But there are positive opportunities too. Some disaster interventions have been effective in changing the pattern of formal house ownership, with new houses registered in the names of both husband and wife. A follow up on the 2001 El Salvador earthquake response, in which the World Bank implemented a joint-ownership policy for new houses, found some communities where 50% of respondents reported that a woman was one of the legal home-owners and that, overall, 37% of the homes were wholly owned by women.

There’s a load of other interesting material on Haiti in other recent posts on Duncan’s blog – e.g. this piece on why humanitarian work is so hard in cities.

World Food Programme report on the state of the science on what climate change means for hunger, plus policy recommendations. Authored by IPCC Impacts Chair Martin Parry with Mark Rosengrant, Tim Wheeler and Global Dashboard’s Alex Evans (December 2009)

Download Report

I’ve said before that the easing of oil and food prices that followed the credit crunch and the global downturn gave policymakers a window of opportunity to take preventive action on scarcity issues. Now, alas, I think that window is starting to close – without their having done much about it.

To see why, first take a look at what the oil price has been doing over the last year (Brent crude futures, $/barrel; h/t BBC):

Then, put that against the longer term background of what’s been happening since 2000 (slightly older data here, via Mongabay, but usefully puts the BBC graph above in context):

As the second graph shows, today’s level of just under $80 per barrel already brings us back to where we were in around July 2007 – and that’s during a still shaky recovery from what’s generally agreed to have been the worst global recession since the early 1930s.

This is a striking rebound in such weak economic conditions – and calls to mind the consistent warnings from the IEA over the past 18 months that the collapse in investment in new supply during the financial crisis and subsequent downturn has set the stage for a new oil price crunch as soon as recovery gets underway (not to mention the fact that IEA’s chief economist thinks we’re looking at peak oil as soon as 2020).

With the oil price headed upwards, food prices can be expected to follow – because higher oil prices make biofuels more attractive, and raise the prices of on-farm energy use, fertilisers, transportation, distribution and various other elements of our energy-intensive food supply chains.

Sure enough, if we take a look at the latest FAO food price index, we find that it too has been quietly heading upwards over the last few months – and is now likewise back at where it was in July 2007. At that point, of course, the food spike was already well underway, with the tortilla riots in Mexico City that served as a wake-up call for many policymakers having come almost six months earlier.

On top of this, remember the really key point that the fall in food prices that took place during the global downturn gave minimal respite to the world’s poorest people – precisely because even as prices fell, they were also getting hammered themselves by the downturn.

The starkest indication of that is in the global total of undernourished people (shown here in a graph from the FT); when you realise that we haven’t just lost the progress of the last few years, but are in far worse shape that at any time since the last 60s, you start to see just what a catastrophe the combination of  food / fuel price spike followed by global downturn has been for development:

As I’ve argued in numerous previous posts, we were never out of the woods on the food / fuel pincer movement; it was the collapse in prices following the credit crunch that was the blip, not the price spike that preceded it. And what’s most frustrating now is the extent to which policymakers have frittered away the chance we had to get onto a more secure footing.

(more…)

So what should we all be watching out for at next week’s G20 summit?  Let’s start with the obvious stuff.

- Expect to hear lots about bankers’ bonuses, in particular from Brown, Merkel and Sarkozy. I can’t find it in me to give a crap about this issue, but doubtless it will command saturation media coverage all week.  More substantive on the banking front will be the question of whether concrete proposals are advanced for hedge fund rules or financial supervision regulation - lots of noise here, but not much specificity so far.

- We’ll also hear lots of debate about when to wind down stimulus programs – which was a big issue at the EU’s preparatory summit (continentals more hawkish, but Brown edgier about turning the taps off). Goldman Sachs’s Jim O’Neill has an op-ed in the FT this morning arguing that while co-ordination was needed for starting the stimulus off, it’s less necessary to have co-ordinated exit strategies.

- The IMF and the World Bank have been doing good advocacy about the need not to forget about low income countries. Zoellick and Strauss-Kahn are both arguing that LICs have an external financing deficit of around $59bn this year (for comparison, that’s exactly half the 2008 global aid total). On the plus side, G20 members have actually delivered the $500bn they promised the IMF – which means the Fund can front up around a third of the total needed. Strauss-Kahn is also talking about a breakthrough on IMF governance reform.  (Believe it when I see it.)

- We’ll hear a lot about climate, but it’s hard to see what deal the G20 is supposed to cut (especially with Ban Ki-moon’s heads-level climate summit in New York the same week). The story the media runs with will be all about pressure on the US to do more, following Japan’s announcement of a tougher 2020 emissions target, and the EU’s long-awaited finance package. (Still, Obama ain’t the problem – the real issue here, of course, is that things don’t look great in the US Senate.)

The issue on the agenda that I’m most interested in for next week, though, is trade. First, what – if anything – will the G20 say on protectionism? For all the warm words at the London Summit in April, it’s increasingly clear that most G20 countries are in breach of their commitments – right now most notably in the case of the US, whose new tire tariffs are disastrous.  Dan Drezner’s take on this is worth reading (things are “very, very scary”) – but on the other hand, Alan Beattie thinks White House chief of staff Rahm Emanuel may have a crafty and ultimately beneficial political calculus in mind.

On a related note, how intriguing to see US sherpa Mike Froman talking up Pittsburgh’s chances of tackling global economic imbalances (“we hope to reach agreement on a framework for balanced growth, for agreeing on how to address the imbalances that led to this crisis and on some process for holding each other accountable”). Not what I expected – but great, if he can pull it off.  That said, I found myself wondering last night: is it conceivable that this is part of a messaging strategy to defend the tire tariffs? Hollow laughs all round if so.

Finally, the issue no-one’s talking about but everyone should be: the impending return of the food / fuel price spike. All these stories about oil companies finding new giant fields are so much straw in the wind. (So the new Jubilee field off Sierra Leone has 1.8bn barrels? Great: a whole twenty-one days’ global demand. Colour me thrilled.) The more fundamental point is about demand, which is picking up again in the non-OECD economies – and let’s remember that it’s in these countries that all the demand growth for oil will come between now and 2030.

The stage remains firmly set for a renewed oil supply (and hence price) crunch in the short term – and when that happens, food prices will go straight up too, as costs for transport, fertiliser and on-farm energy use race upwards and biofuels become even more competitive as a source of demand for crops. We’re already at a baseline of 1.04bn undernourished people (compared to 850m before the last food price spike) – do the maths. So my wish list for the G20?

1. $6bn funding for WFP – now.
2. Leave the trade round on hold, but agree emergency WTO rules against food export restrictions (like the ones that already exist in NAFTA).
3. Build up a multilaterally managed emergency food stock – maybe part real, part virtual (see Feeding of the 9 Billion for full details).
4. Commit to universal access to social protection systems by (say) 2015 – and lock the funding in place, now (only 20% of the world’s people currently have access to them – but these are the best-defence resilience mechanism for poor people facing price spikes, way better than price controls or economy-wide subsidies)
5. Bring China and India into full IEA membership, so that they’re part of its emergency supply management mechanism.
6. Start driving real inter-agency coherence by commissioning the most important multilateral agencies for scarcity issues – UN, Bank, Fund, OCHA, WFP, FAO, IEA – to produce a joint World Resources Outlook. We need the integrated analysis; we need the political momentum it will create.
7. Ask Ban Ki-moon to set up a High Level Panel to look at the international institutional dimensions of climate, scarcity and development – covering not just the UN, but the entire international system. This is the bit of international system reform that both the 2004 and 2006 High Level Panels left for another day. Today is that day.

Ten years of freedom for East Timor today, and a notably graceful editorial in the Jakarta Post:

Indonesia would have learned a great deal from the fatal mistakes of its 24-year occupation of the then East Timor, now Timor Leste, so it hardly needs more lessons. Well perhaps one more: a lesson on statesmanship from President José Ramos-Horta.

On the 10th anniversary of the UN-sponsored independence referendum that ended Indonesian rule, Ramos-Horta’s speech Saturday was worthy of his standing as a Nobel Peace Prize laureate, part of which read “My stated preference, as a human being, victim and head of state, is that we once and for all close the 1975-1999 chapters of our tragic experience [and] forgive those who did us harm.”

 It concludes:

Timor Leste is fortunate to have truly great statesmen like Ramos-Horta and Gusmao. Statesmanship will remain in short supply among Indonesian leaders for as long as we continue to let human rights violations go unpunished. While our leaders are busy talking the talk at international forums, we are certainly not walking the human rights walk.

But in an FT interview, Ramos-Horta’s own preoccupations are focused on the future:

José Ramos Horta, the president, who shared the 1996 Nobel Peace Prize for his efforts to end the Indonesian rule that left more than 150,000 Timorese dead, says that when a shortage of water and dependence on subsistence agriculture is added, the scale of the problems the country faces cannot be overstated.

“With this population growth and poverty, [and] increasing pressure on water and land, 20 years from now we will start killing each other over water and land,” he told the Financial Times. He has no doubt that, unless more attention is paid to rural areas, urban migration – particularly among the rapidly escalating ranks of disillusioned and unemployed youth – will be so great that it will create a “time bomb”.

I spent yesterday morning presenting on scarcity issues - water, food, energy, land and climate security – to staff from the UN Department of Political Affairs, as part of a three day session on non-traditional security threats organised by the Geneva Centre for Security Policy. 

Here’s a copy of my presentation on the kinds of institutional change we need in order to manage scarcity, which focuses particularly on reducing the vulnerability of poor people and fragile states.  This draws heavily on a new report on Multilateralism and Scarcity that I’ll be publishing through the Brookings Institution later in the year.

Also presenting were Geoff Dabelko from the Woodrow Wilson Center (if you don’t subscribe to The New Security Beat, the Center’s superb blog on scarcity-security links, then you should); and Mike Hutton from the US Department of Energy’s Office for Intelligence and Counter-Intelligence (as previously documented here, one of a handful of hotspots of radical forward thinking in the US government – you can get involved, too).

- With the news that President Obama has nominated Ben Bernanke for a second term, over at the New Republic Noam Scheiber assesses the merits of continuity at the Fed. Stephen Roach, meanwhile, examines the case against the incumbent chairman, arguing that Obama’s decision should open a “broader debate over the conduct and role of US monetary policy”.

- Taking us back to the depths of last September’s financial meltdown, Faisal Islam has some interesting insights into the collapse of Lehman Brothers as viewed from British shores.

- Elsewhere, debate continues apace about the rights and wrongs of releasing the Lockerbie bomber. Suggesting that “cock-up offers as convincing an explanation as conspiracy for the handling of Mr Megrahi’s release”, Philip Stephens argues that the decision highlights the “price of realism” in foreign policy.

- Speaking of which, in the latest edition of FP Magazine none other than Paul Wolfowitz assesses the realist credentials of President Obama; providing at once a telling insight into the mindset of a man at the heart of foreign policy making during the Bush years.

- Mark Easton’s BBC blog, meanwhile, takes a look at how the British government is looking to influence public behaviour in light of the Chief Scientist’s warning of a “perfect storm” of energy, food and water scarcity by 2030.

- Finally, as President Obama holidays on Martha’s Vineyard, the White House announces what he’ll be reading on the beach. Slate offers its take here.