Managing National

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Managing National Global ScaleEconomic-Environ
mental Risks
Policy implications for drought proofing
African development strategies

• Eric Patrick
• UNDP Drylands Development Centre
• eric.patrick_at_undp.org
• www.undp.org./drylands

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• Australian Prime Minister said the drought
  described as one of the worst on record in
  Australia, would "affect our GDP growth".
• Global wheat prices surged to 10-year highs
  after Australian officials warned the country's
  harvest could be cut in half.
• "It depends on the extent to which our booming
  economy in other areas can offset it," he said.
• Extreme drought, in which agriculture is in
  effect impossible, will affect about a third of
  the planet by the end of the century, according
  to a new study from the Hadley Centre for Climate
  Prediction and Research.

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Objectives of Presentation

• Suggest some foundational concepts for this Forum
• Emphasize the degree of weather but also market
  dependence of African societies
• Examine other types of vulnerabilities which
  exacerbate weather dependence
• Highlight medium term global grain market and
  climate change dynamics and their implications
  for food security in Africa
• Suggest the policy implications to think about
  over the Forum in order to identify key policy
  recommendations on how to drought-proof African
  development

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Weather Hunger in Africa

• Africa is the 2nd driest continent 2/3 of
  potentially useable land can be classified as
  drylands
• But even in years of good rains, even in a non
  crisis country such as Kenya, food aid in various
  forms to approx. 1 million people
• Even in years of good rains seasonal hunger
  due to selling of surplus just after harvest, due
  to cash needs or lack of storage

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Drought Vulnerability Africa

• Africa is not the most drought EXPOSED continent,
  in terms of numbers of persons (Asia)
• but has by far the highest relative VULNERABILITY
  to drought, in terms of
• IMPACT (mortality of livestock and humans,
  proportional effect on economy)

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Socio-economic/political factors
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Drought complex food crises

• Drought risk mediated through dysfunctional
  socio-economic systems, which may even amplify
  the natural impacts of drought socio-economic
  droughts
• Kenya grow maize in semi-arid areas, as market
  risk of growing non maize gt weather risk of
  growing maize policy drought
• Food as a weapon policy famines
• HIV new variant famines most productive out

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Populations caught between failed self-insurance
failed collective insurance

• Traditional drought risk management systems,
  based on mobility, often no longer feasible
  livelihood systems
• Nation-state, normal mediator of an insurance
  pool, often a convenient fiction state capture
  for resource capture by elite
• Lack of investment in drylands due to
• a) perception that of little economic value
• b) populations often politically marginalized

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Populations caught between state capture
market failure

• Narrow (ethnic?) power base leads to rent seeking
  to finance patron-client system
• Low savings / investment, urban bias low
  agricultural productivity
• Land ownership patterns and drought drive
  highland populations (Kenya, Ethiopia) into
  lowlands, increasing vulnerability of both
  agricultural and pastoral livelihoods conflict
• Conflict makes investment unattractive!

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Drought proofing African development

• Need to recognize that drought risk is not just a
  drylands or even agricultural issue
• 2005/6 greatest economic impacts East Africa due
  to power loss, not livestock
• Economic diversification is not good enough also
  need diversification away from weather dependence
  of value added need analytical support to find
  best net risk return investment options
• Allow view DRM as a national priority gt charity
  for some backward nomads

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Drought Vulnerability Economic Development
Example Economic impacts Zimbabwe
1991/2 Agriculture 45 Power 15
Manufacturing 9 Stock market 62 GDP 11
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The nature of drought impacts, as a function of
the degree of economic development
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Number of People at Risk of Hungerprojected for
different IPCC economic development paths
?
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Global trade-redistributed rainfall subsidies
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Are food aid / subsidies a disincentives?
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Drought, global market power food security

• Climate change introduces uncertainty about
  future food availability may benefit grain
  production in some areas (China, Russia), decline
  in others (India, Brazil)
• Even without C.C., cereal surplus projected to be
  exhausted by 2020 due to increased demand from
  China and India (demographics, urbanization,
  market power)
• Future of re-insurance compact between food
  surplus subsidizers, as a food aid source (mainly
  US) for food deficit countries with low market
  pull (SSA) will be decided in part by economic
  future and hence policy choices today of African
  and other countries

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Policy Implications for drought proofing
African Development

• You have 3 days to figure it out, if you do,
  please tell me!
• Singapore grows nothing but its people never go
  hungry
• North / South Korea Namibia / Angola
• Food Security Coalition process Ethiopia
• ASAL policy process Kenya
• Range of State, Market and hybrid approaches in
  Malawi

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