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Answering the food security colonial conundrum? 7, November 2009

Posted by thegulfblog.com in Africa, Qatar, The Gulf.
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In international relations the security discourse is often monopolised by those with a myopic view of security as focusing disproportionately on military matters. Other factors be they economic, social or environmental, whilst perhaps considered important, have a tendency of being relegated firmly to the second tier of concerns ahead of the simple, brutish realities of the military balance. This kind of position is taken by those known as classical realists. However, even the staunchest realist might pause for thought if they were to hear that by some estimates the State of Qatar imports around 95% of its food from abroad. This is an exceedingly high figure and highlights the critical level of dependence that Qatar has on its food importers. This situation is repeated to varying degrees across the Arabian Peninsula.

In recent years, states such as Qatar, Saudi Arabia and the United Arab Emirates have sought to rectify this situation by buying often huge swathes of land in (usually) developing countries. Billions of dollars and millions of hectares of land have changed hands in countries ranging from Indonesia to Ethiopia and from Pakistan to Cambodia and countless others besides.

Yet it is not just arid, rich Gulf countries that are buying up land abroad. Countries with burgeoning populations such as India, Egypt and China as well as Western private investment banks and institutions are also significantly entering the fray.

Unsurprisingly, there has been a vociferous reaction to these practices. The buying of land to produce foodstuffs primarily (and usually exclusively) for exporting from impoverished countries can be seen as anything from unfair to wrong or even immoral and has been widely dubbed as neo-colonialism. The most egregious example of this occurred when in 2008 Daewoo, a conglomerate from South Korea (GDP per capita $27,000), bought roughly half of the arable land in Madagascar (GDP per capita $1000). This decision contributed to a change in leadership in the African island state and the cancellation of the deal in March this year.

Now it appears that one of the former ‘neo-colonialist’ states, Qatar, has heeded this backlash and is looking to pursue its food security in a different manner. The Qatari Investment Authority has established Hassad Foods with an endowment of $100m to invest in or buy up agricultural companies around the world instead of buying the land. Aside from appearing less ‘neo-colonial’, there are other advantages to this type of programme. By buying up established companies the set-up costs will be less than starting from scratch. Also, from Hassad’s point of view, with the world markets still struggling at the moment, there ought to be some bargains around and, given that food will only ever be needed to a greater degree in the longer term, such investments would appear to be sound.

So far, Hassad has entered into a $68.5m joint venture with an Omani poultry firm and has signed an agreement with Russian grain processing firm PAVA to cultivate land in Sudan. After a modest start, there is potential for the Sudanese joint venture to expand to cultivate up to a quarter of a million acres of land.

Yet one must ask if arrangements such as these are really that much better. Like in the ‘neo-colonial’ arrangement the transport infrastructure and/or the port where the goods will be exported from will be renovated by the importing country. This is, of course, a good thing for the host country. Yet, one must not forget that the foodstuffs produced will still be exported. The international market can and will offer a better price than the domestic one and that is the price at which the food will be sold. It seems unlikely, therefore, that the host country will benefit in terms of food production from this arrangement unless there is some kind of stipulation embedded into the contracts stating that a percentage must be sold domestically.

Indeed, it seems likely that in the newer type of deal (a post-neo-colonial deal?) instead of South Korea or Qatar paying Sudan or Cambodia money directly for their land it will instead go to a private company. Also, could it not be argued that when the deal is at a governmental level there is more scope for provisions for less profitable domestic sales to be included than with two companies both looking to their profit margins as the be all and end all?

Overall, aside from thorny questions to do with territorial rights or sovereignty of the land in question, it appears, therefore, as if there is precious little difference between the neo-colonial and the post-neo-colonial deals.

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UK economy overtaken by Italy’s 7, November 2009

Posted by thegulfblog.com in UK.
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…so head for the hills. It’s clearly all over. Lights out, close up, enough. If corruption ridden, Mafia riddled and 4 hour lunch break taking Italy can overtake the UK’s economy, then indisputably the UK is finished. Oh the ignominy, the pity, the utter humiliation and the precipitous and vituperative rage and anger that I feel towards Brown for leading us to this lowest ebb. So scandalously and thoroughly screwed must Britain be if Italy has overtaken it that Brown is either so outlandishly and stupendously inept that someone ought to call Guinness, or all along he’s been on a secret mission from Jock McScotland to shaft the UK in a giddy haze of envious and suicidal apocalypse.

Double standards: US & Islam 7, November 2009

Posted by thegulfblog.com in American ME Relations.
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When a white guy shoots up a post office, they call that going postal,” said Victor Benjamin II, 30, a former member of the Army. “But when a Muslim does it, they call it jihad.

Relative competitiveness in the GCC 7, November 2009

Posted by thegulfblog.com in Bahrain, Oman, Qatar, Saudi Arabia, The Emirates, The Gulf.
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ppoint slide

Here’s a slide taken from a survey of business attitudes in the Middle East. As you can see, it shows what business men and women think about which country in the GCC is leading the way, in their opinion, in terms of 1) making government more business friendly, 2) strides being made in legal reform, and 3) strides being made in educational reform.

In such a poll I would have expected the UAE to be the number one, but not necessarily as far ahead as they are. I would also have expected to have seen Qatar a bit higher up. These results broadly follow what Transparency International with their corruption perception index and Doing Business with their ‘ease of doing business in…’ index conclude.

Country Ease of Doing Business in…Index 2008 Corruption Perception Index 2008
World Ranking GCC Ranking World Ranking GCC Ranking
Qatar 39 4 28 1
UAE 33 3 35 2
Saudi Arabia 13 1 80 6
Bahrain 20 2 43 4
Oman 65 6 41 3
Kuwait 61 5 65 5

Things to note about these statistics:

  • Qatar is well placed: highest in region for lack of corruption and moderately placed in terms of ease of doing business.
  • Saudi Arabia is (astonishingly) well placed, coming 13th in the world for ease of doing business. Surely it can’t possibly go any higher given its atrocious placing on the corruption perception index. How on earth do they overcome this low score, coming 80th? Surely corruption ‘that bad’ will eventually tell its toll…
  • I have written about Kuwait before. Long story short, their poor showings in these indexes are indicative of their overall lack of enthusiasm for foreign investment or cooperation.

The historical corruption data:

corruption percetions inced 2004-8

(Apologies it’s so small: save it as a picture file to zoom in on it. Qatar-bright red. KSA-Reddy-brown (at the top). Bahrain-green. UAE-light blue. Kuwait-puprle ascending line. Oman-the variable yellowy-orange line.)

A few more things to note:

  • The higher on the graph, the worse the corruption.
  • Saudi Arabia is getting more corrupt and endemic corruption is notoriously hard a trend to reverse.
  • Qatar have, since 2004 (the oldest data I have to hand) been on a consistently ‘less corrupt’ trajectory.
  • The Emirates’ boom years from 2004-2008 have also seen corruption rise a not insignificant 6 places from 29th to 35th.
  • Bahrain are yo-yoing around (though not as bad as Oman). They will have to get a hold of these trends and keep them under control and on a downward spiral now that their oil deposits are severely depleted. Saudi and Kuwait can afford high corruption scores: Bahrain cannot.
  • Kuwait – disparaging of their need for foreign investment as they are – must address their upward spiral (44th-65th in four years) joining the likes of Cuba and El Salvador (and heading towards Columbia) on the index. Yes, technically, they may not need foreign investment now, but by the time they realise that they are beginning to need it, their corruption and economy more generally may be in no fit state to receive it.

The Sheikh strikes back 7, November 2009

Posted by thegulfblog.com in Saudi Arabia.
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Supporters of Sheikh Saad bin Nasser al-Shithri who was fired for criticizing the liberal policies at King Abdullah University for Science and Technology have hacked the Al Watan website and posted a picture of the Sheikh and a message supporting him and lambasting his opponents.

Frankly, we do not know the difference between the deviant sects of militants and the fifth column (…) of liberals; they both defame scholars and describe them with the most offensive statements…O Sheikh Shithri, we are on your side and faithful to you, but the voice of hypocrisy today is the one that resonates most in our press.

I am always profoundly struck at the cheek of such people: bemoaning and complaining about modernization via hacking a website. Irony, anyone?