The era of cheap food is over. This is bad news for food-importing countries, and few are as dependent on imports as those of the Gulf Cooperation Council (GCC). Imports typically account for 80 to 90 per cent of food needs. Should GCC governments be worried? The short answer is yes, though not for the reasons you might expect.
The 2008 global food crisis saw prices for key agricultural commodities more than double and protests break out in over 60 countries. The World Bank estimates that more than 100 million people fell into poverty. Though international food prices receded, they remained higher than the long-term average and were soon on the rise again. Prices spiked once more in 2011 following a heatwave in the major cereal-producing Black Sea region, and again last year as the worst drought to hit the US Midwest in half a century laid waste to maize and soybean crops.
The outlook is for more of the same. Prices are expected to remain high and volatile as global demand increasingly outstrips supply and food stocks struggle to recover.
Biofuel policies make a bad situation worse. And as climate change gathers pace, bad harvests will become more likely.
Despite the GCC’s import dependence, high and volatile food prices do not pose an immediate threat to food security. Wealthy populations can afford the price rises. The problem for governments is not that people cannot pay more for their food, but the risk that they will refuse to.
Gulf populations are extremely reluctant to accept higher prices. On top of this is the risk that the spike in food prices may trigger instability in neighbouring countries with consequences on the GCC. For example, the 2011 price spike – and its economic impact on the major wheat-importing countries of North Africa such as Egypt, Tunisia and Morocco – has been identified as a precursor to the wider social, political and economic grievances that became the Arab Spring.
For GCC countries, higher food prices are therefore a problem of political security rather than food security, and governments have responded with a range of ad hoc measures to placate potentially restive populations. These include food subsidies, price controls and wage increases; these have worked, but have not been cheap.
Social spending among GCC countries rose sharply after the 2008 price crisis and again after the 2011 price rise and the Arab Spring. In consequence, governments need higher oil revenues to cover their spending. The government of Saudi Arabia now requires an international oil price above $85 per barrel (Dh312) to break even, compared to $37 in 2008. Bahrain needs over $100 per barrel.
GCC states are, for the most part, still in the black, but they are vulnerable to a fall in oil prices. They cannot pursue higher oil prices indefinitely without choking off demand. The long-term food security of the GCC requires governments to contain ballooning social expenditures, diversify their economies and broaden their revenue base.
In the short-term, the most significant threat to GCC food security relates not to food prices, but to food supply. The Gulf countries are surrounded by a series of maritime “choke points” – busy, narrow passages vulnerable to disruption or closure. Nearly all food imports must pass through at least one.
Most vital is the Suez Canal in Egypt, which militants recently tried to block by firing rocket propelled grenades at a container ship. More than 80 per cent of wheat and coarse-grain imports pass through the canal en route from North America, South America, Europe or the Black Sea. Nearly half of this must then pass through the Strait of Hormuz on its way to ports within the Arabian Gulf. This critical waterway also receives 80 per cent of rice imports from India and Pakistan. It is periodically threatened with closure by Iran, most recently last year in response to sanctions from the international community.
The worst case scenario for the GCC is some form of regional conflict that closes multiple choke points for a sustained period. Preparedness for such a contingency probably explains government decisions to build strategic cereal reserves approaching or exceeding a year’s supply. Maintaining stocks of this size is expensive, but is far cheaper and more sustainable than growing cereals in the desert. And while the risk of instability in the Middle East remains, it looks like money well spent.
Rob Bailey is an expert on food security at the London think tank, Chatham House
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
UAE currency: the story behind the money in your pockets
Results
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Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
What you as a drone operator need to know
A permit and licence is required to fly a drone legally in Dubai.
Sanad Academy is the United Arab Emirate’s first RPA (Remotely Piloted Aircraft) training and certification specialists endorsed by the Dubai Civil Aviation authority.
It is responsible to train, test and certify drone operators and drones in UAE with DCAA Endorsement.
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“Pilots have to be mature. They are given a map of where they can and can’t fly in the UAE and we make these points clear in the lectures we give.
“You cannot fly a drone without registration under any circumstances.”
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The Sanad Academy has a designated area to fly off the Al Ain Road near Skydive Dubai to show pilots how to fly responsibly.
“As UAS technology becomes mainstream, it is important to build wider awareness on how to integrate it into commerce and our personal lives,” said Major General Abdulla Khalifa Al Marri, Commander-in-Chief, Dubai Police.
“Operators must undergo proper training and certification to ensure safety and compliance.
“Dubai’s airspace will undoubtedly experience increased traffic as UAS innovations become commonplace, the Forum allows commercial users to learn of best practice applications to implement UAS safely and legally, while benefitting a whole range of industries.”
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