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Why are KSA, UAE investing in agri-livestock?



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Islamabad (Imran Y. CHOUDHRY) :- Former Press Secretary to the President, Former Press Minister to the Embassy of Pakistan to France, Former MD, SRBC Mr. Qamar Bashir analysis :
A renowned anchor of Pakistan in one of his highly rated program disclosed that the army chief soon after assuming the baton, has been meeting with businessmen, agriculturists, economists and imminent persons from many other important sectors to bring in some semblance in the way the country is being handled and to overcome its economic and financial woes. But perhaps the listener did not pay much attention to it at the time, until the news of the formation of the Special Investment Facilitation Council (SIFC) with the Army Chief as a member and center stage was announced, and we all know that when the mighty speak, the others only listen.

Soon after its formation, various sessions were held wherein many important decisions which could otherwise have taken years to mature were finalized in a jiffy. In a matter of hours, the four terminals of Karachi ports were sold to a Dubai-based company for a lease of more than 30 years. The file of sale, once started, continued to move at breakneck speed, possibly without requiring the customary and legendary oiling of the wheels to speed up the process, as perhaps the Army Chief’s baton was enough to do the rest. SIFC’s second decision was to auction Pakistan Steel Mills, which is expected to be completed before the next government takes office. The army chief brought his third ready-to-launch project, the Livestock and Dairy Modernization and Improvement Support (LIMS) Program, which aims to introduce modern agro-farming to increase the profitability and productivity of Pakistan’s livestock and dairy industries. Only two days after the launch of LIMS, the army chief introduced its fourth prefabricated initiative, “the Green Pakistan initiative,” which was launched today (10th July, 2023) by the Prime Minister in the presence of all federal ministers and Chief Ministers to provide it with much needed legitimacy. This gathering of all political forces was a replay of the gathering of all political parties following the APS incident in Peshawar, but this time Imran Khan was conveniently not invited, as if he has no relevance in the country’s current and future political setup.
While speaking at the prestigious ceremony, the Prime Minister thanked the Army Chief for bringing in the green initiative and hoped that this project, like a magic wand, would change the fate of Pakistan in no time by bringing in billions of dollars in investment in Pakistan in months, if not days. I believe that, like many other leaders, our Prime Minister is good at convincing people that Pakistan is a prosperous country and that they are the richest people on the planet. This dream, however, has always been dashed when the new government declares Pakistan on the verge of collapse, and then we wait for another such speech from the new prime minister. Let us hope and believe in the words of the army chief who said that despair is irreligious and true Muslims should thank Allah for His bounties and show patience and pray for the return of better times during times of trial and retribution. Is this initiative new or old, was it introduced in the past but, refreshed and reintroduced, and why the Kingdom of Saudi Arabia(KSA) and United Arab Emirates are specifically interested in our agriculture and livestock sectors, were a few questions which needed answers.
Some headlines piqued my interest while I was looking for answers. The headline in Arab News on September 19, 2019 read, “Pakistan seeks Saudi, UAE partnership in agriculture.” “Saudi Conglomerate Al Tamimi Group Eyes Investment Opportunities in Pakistan’s Agriculture Sector,” Arab News, December 26, 2019. “UAE investors acquire land in Pakistan for food production,” National News, October 26, 2008. The Express Tribune, 23.06.2022, “Saudi investors interested in agriculture in Pakistan”, Financial Times, “UAE investors buy Pakistan farmland”. And the list goes on.
Investment in Pakistan’s agriculture and livestock markets appears to be seen as the most viable, cost-effective, and secure way for Saudi Arabia and the UAE to ensure their people’s food security.
According to a study published in the Journal of the Saudi Society of Agriculture Science in October 2018, Saudi Arabia will import all of its food by 2050. The Kingdom also panicked after its experiments to promote agriculture in the country by using underground fresh water, importing water from other countries, or artificially creating water from sea water initially generated headlines, but later plummeted, compelling the Kingdom to reverse its policy due to compelling reasons such as unjust use of nonrenewable natural resources was not a viable practice and it depleted much of the country’s scarce aquifer water supplies which rendered the program ineffective. As a result, by 2016, Saudi Arabia was primarily reliant on imported wheat, prompting the Kingdom to turn to Pakistan due to its large expanse of land that had gone unutilized or underutilized as a result of its legendary incompetence, lack of political will and obsolete work processes.
Another study, “Agrarian Mirage: Gulf Foreign Direct Investment in Pakistan’s Agriculture Sector,” conducted by the Middle East Institute, stated that Gulf interest in Pakistan as a reliable source of food increased significantly during the tenure of General Pervez Musharaf, peaking in 2008. At the time, Gulf Cooperation Council (GCC) governments were highly concerned about global economic changes and their limited capacity to enhance domestic agricultural production to fulfill the requirements of their quickly growing populations. As the dollar price of Rice increased to $907 a ton in April 2008, nearly tripling the November 2007 levels and in response, major grain-exporting countries such as India and Vietnam imposed export bans, infuriating the Arab Gulf states. Saudi Arabia and the UAE then decided to take matters into their own hands by avoiding global food markets and instead seeking agricultural land overseas to grow crops such as rice, wheat, sugar, and fodder crops such as alfalfa, maize, barley, and soybeans. All of these crops were ideally suited to the Pakistani environment. Meanwhile, the Pakistani government offered tax exemptions, duty-free equipment imports, and 100 percent land ownership in special free zones in its agriculture, livestock, and dairy sectors. In addition, land investors were also exempted from the country’s existing labor laws and offered to provide a 100,000-strong security force to protect investors. This was what the Gulf states were looking for. In their quest to acquire agricultural land in Pakistan, the Gulf countries relied on several key organizations and firms to facilitate the transactions. In Saudi Arabia, The King Abdullah Initiative (KAI) for Saudi Investment in Agriculture Abroad was established, with the aim of achieving national food security through building integrative partnerships with countries that had a high agricultural potential. The UAE has relied on Abraaj Capital, a Dubai-based private equity investment firm, to facilitate investments in foreign agricultural projects. Al-Qudra Holding is an Abu Dhabi-based firm involved in agricultural investments through its subsidiary, Al-Qudra Agriculture.
These firms then went on a shopping spree in Pakistan, In 2008, the private equity company Abraaj Capital and other UAE companies acquired 800,000 acres of farmland in Pakistan with the support of the UAE government. Another UAE firm also acquired as much as 800,000 acres of farmland in Pakistan that year. The Emirates Investment Group and the Abu Dhabi Group in 2009 acquired about 16,187 hectares of land in Pakistan’s Baluchistan province for an estimated US$40 million for mechanized farming with an additional investment of $20 million in fertility enhancement to make it commercially viable. The Qatar Meat and Livestock Company (Mawashi) reportedly spent $1 billion into corporate farming in Pakistan by taking on lease around 12,140 hectares in Shikarpur, Larkana, and Sukkur. Saudi Arabia took on lease 500,000 acres of land in Pakistan to grow grain and vegetables for the Saudi market.
However, shortly after the democratic government of Asif Ali Zardari as President and Yousaf Raza Gilani as Prime Minister took over, FDI, which had peaked at US$8 billion in 2008, plummeted to US$750 million. The arguments were straightforward and logical: selling agricultural land to foreign countries had the potential to cause political and societal upheaval, especially given Pakistan’s uncertain food security. In reality, Pakistan’s food security is worse than that of Saudi Arabia and the UAE in terms of pricing, availability, quality, and safety.
Pakistan ranked 99th out of 121 countries in the 2022 Global Hunger Index and has been classified with a serious degree of hunger with a score of 26.1, whereas Saudi Arabia ranks 30th out of 121 countries with a low level of hunger with a score of 6.7. The United Arab Emirates ranks 18th out of 121 nations in the 2022 Global Hunger Index, with a score of 5.3, indicating a low degree of hunger.
As our Prime Minister thanked the army chief on numerous occasions for bringing in much needed dollars from both Saudi Arabia and the UAE, and as we all know, there is no such thing as a free lunch, perhaps the cost agreed upon by the army chief was a restart of the process of selling agricultural land to Saudi Arabia and the UAE that was started during the Musharaf regime but was shelved by successive civilian governments. Let us hope that this time, these seemingly 13-year-old schemes would result in a win-win situation for Pakistan and Saudi Arabia and Pakistan and the United Arab Emirates. Instead of falling farther down the hunger index, Pakistan will at least achieve the degree of hunger experienced by both Saudi Arabia and the UAE.

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