Gulf states covet Asian farms

Once committed largely to perceived safe-haven investments in the United States, Gulf nations are now looking to send their petrodollar surpluses towards a more exotic global destination: Southeast Asian farmland.

What is clear is a pressing Middle Eastern need to shore up the region’s shaky food security. The Gulf Research Center (GRC), a Dubai-based think-tank, in May highlighted the declining agricultural production by the Gulf Cooperation Council’s (GCC) six member states and the wider region’s increasing financial exposure to spiraling food prices.
A GRC report that month specifically called on the GCC nations – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – to develop links with foreign countries with abundant arable land. Higher global food prices are a key contributor to escalating inflation in the Middle East, which suffers from a lack of fertile land and consistent water supplies.

The region’s surging oil wealth is meanwhile attracting ever-larger influxes of immigrants, who are putting further strain on already import-intensive food supplies. The region’s population could rise to 39 million in 2010, from 35 million in 2006, and surge to 58 million by 2030 if current demographic trends continue, the GRC forecast. The population of the six member countries was 30 million in 2000.

Gulf states already import between 60% and 90% of their food requirements, amounting to a total bill of US$10 billion per year. Saudi Arabia is the largest importer, followed closely by Kuwait and the UAE, according to the GRC. Meanwhile, world food prices surged to record highs earlier this year. Costs for cereals such as rice, the Gulf’s main staple, have recently declined, but remain three times higher than the past decade’s moving average. For example, the price of rice imported from India and Pakistan has risen by 70% on average.

Asia Times