Multi-year expert meeting on

international cooperation: South–South

cooperation and regional integration
Geneva, 14–16 December 2009

New Southern investors in agriculture: drivers, issues and policy

implications"

By Giacomo Luciani
Director, Gulf Research Center Foundation
Geneva

Copyright © Gulf Research Center 2009 All rights reserved

Page 1
The Potential of South-South Investment
for Agricultural Development: Gulf Food
Security and Agro-Investments Abroad

Giacomo Luciani
Director
Gulf Research Center Foundation
Geneva

Multi-year expert meeting on international cooperation:

South–South cooperation and regional integration,
Geneva, 14–16 December 2009

Copyright © Gulf Research Center 2009 All rights reserved

Page 2
 Gulf Food Security

™ 60% import dependence by 2010 (FAO)

™ Especially wheat, rice and fodder needed
™ GCC eyes overseas investments: Sudan, Pakistan etc.
™ Disconnect between current food imports and investment
destinations

Copyright © Gulf Research Center 2009 All rights reserved

Page3 3
 '000 Metric Tons

-4000
-2000
0
2000
4000
6000
8000
10000
1970/1971

Source: USDA
1972/1973

1974/1975

1976/1977

1978/1979

1980/1981

1982/1983

1984/1985

1986/1987

1988/1989

1990/1991

1992/1993

1994/1995

1996/1997

Copyright © Gulf Research Center 2009 All rights reserved

1998/1999

2000/2001
Cereal Net Imports Saudi Arabia

2002/2003

2004/2005

2006/2007

2008/2009
Rice

Corn

Page 4
Barley
Wheat
Copyright © Gulf Research Center 2009 All rights reserved
Page 5
 GCC Agriculture:
Short History
• Widening Food Gap in the 1970s
• Threats of a Western food boycott in retaliation to
short lived Arab Oil boycott
• Aborted Sudan bread basket strategy
• Strategies of food self sufficiency 1970s-1990s
• Subsidized Agro Schemes with Fossil Water
• Saudi wheat production: 3,300 tons in 1978 Æ 3.9
million tons in 1992 = sixth largest wheat exporter
worldwide at that time
• Decline in water reserves Æ 2008: Phasing out of
Saudi wheat production by 2016
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Page 6
 Self Sufficiency Ratios 2006

120
CEREALS (TOTAL)
100
WHEAT AND FLOUR
80
Percent

MAIZE
60 VEGETABLES (TOTAL)
40 FRUITS (TOTAL)
MEAT (TOTAL)
20
MILK & DAIRY PROD.
0
Saudi Kuwait Oman UAE
Arabia

Source: Arab Organization for Agricultural Development

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Page 7
Copyright © Gulf Research Center 2009 All rights reserved
Page 8
 Gulf Food Security

Number of Announced GCC Agro Investments

Abroad

25

20

15

10

0
A u t an

M di a
E t ey

ia
am nd
U lia
Vi ine

Bu a

Ta nya
Tu t
Pa dan

Th m

a
ilip an

co
za p i a

do a
s
yp

si
rm
ne

In odi

an
na
rk

ra

C ila

oc
Ph kist

ne
s

In
Eg

a
K a hi o

Ke
Su

pi

nz
kh

st

kr

et

b
a

or
Source: GRC, based on press reports

Copyright © Gulf Research Center 2009 All rights reserved

Page 9
 Gulf Food Security

Agricultural Net Trade 2004

18000
16000
14000
12000
Million US$

10000
8000
6000
4000
2000
0
India

Kazakhstan
Ukraine

Vietnam
Turkey

Phillipines
Australia

Thailand

Pakistan

Sudan

Ethiopia

Kenya
-2000

Source: FAO
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Page 10
 Gulf Food Security
Countries % of Global Wheat Exports
GCC* Rice Imports: Countries of Origin
USA 26.0

60 Australia 16.0

50 2001 Canada 13.9

40 2002 France 13.0

Percent

2003 Argentina 7.1

30
2004
20 Germany 2.7
2005
10 Kazakhstan 1.9
2006
Russian Federation 1.7
0
Pakistan India USA Thailand India 1.7
United Kingdom 1.1

GCC Wheat Imports: Countries of Origin Countries % of Global Rice Exports

Thailand 30.2
70 India 16.6
60 2001 Viet Nam 10.6
50 2002
Percent

USA 9.9
40
2003
30 Pakistan 7.0
2004
20 Italy 3.5
2005
10 Egypt 2.6
0 2006
Uruguay 2.0
Australia India Canada Argentina Germany Russia 2007
Spain 1.3
Argentina 0.8
Source: Trademap *(excluding Kuwait) Source: FAO
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Page 11
 KAISAIA

King Abdullah Initiative for Saudi Agricultural Investment

Abroad (KAISAIA):

• Launched in January 2009, Ministry of Commerce and Industry

is lead agency
• Public Private Partnerships: Saudi private sector with
government support
• Saudi Industrial Development Fund (SIDF) and $800 million
Saudi Company for Agricultural Investment and Animal
Production (SCAIAP) launched in April 2009
• List of 20 preferred countries currently compiled

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Page 12
 Goals of KAISAIA

• Countries with agricultural potential and good administrative

governance and investor protection
• Low-cost transport of crops to the Kingdom
• Reasonable share of the crops should remain in the respective
countries to contribute to their food security
• Backing of guarantees by bilateral long-term agreements and
strong state support
• Extended rights to the land either via ownership or long-term
lease contracts
• Free choice of crops

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Page 13
 Limiting Factors

1) Water: Physical Water shortage in Pakistan and Central Asia

Economic Water Shortage in Africa

2) Money: Decline of oil prices in 2008

Sovereign Wealth Fund Losses
Increased Financing Costs for GCC Corporations

3) Politics: Land rights and potential opposition by local

stakeholder groups in targeted countries

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Page 14
 Thank You

Gulf Research Center Gulf Research Center

P.O. Box: 80758, Dubai Foundation
United Arab Emirates 49 Avenue Blanc
www.grc.ae 1202 Geneva
Tel: +971 4 3247770 www.grcf.ch
Fax: +971 4 3247771 Tel: +41 22 7162730

Copyright © Gulf Research Center 2009 All rights reserved

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