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TRADE: 'Gulf States’ Technology Can Be Swapped for Africa’s Food'

Stephanie Nieuwoudt

CAPE TOWN, Feb 25 2009 (IPS) - Countries in the Gulf and in Africa can form mutually beneficial partnerships, with Africa supplying fertile arable land and the Gulf investing in technology, fertiliser and other agricultural inputs.

This is one of the proposals made at the Gulf-Africa Strategy Forum held in the South African city of Cape Town from Feb 24 to 25. The two-day forum is hosted by the Gulf Research Centre (GRC), a Middle Eastern think tank.

It is hoped that delegates at the forum will be able to identify future cooperation, trade and investment initiatives and form partnerships to act on the potential. The forum will also look at strengthening political and security partnerships.

‘‘In Africa, farmers are faced with the obstacle of underdeveloped infrastructure,’’ Shakeel Meer, divisional executive in charge of industrial sectors at South Africa’s statutory Industrial Development Corporation (IDC), told IPS.

One of the problems is a lack of road infrastructure, preventing farmers from accessing larger markets. They end up being subsistence farmers. According to Meer, Gulf countries can invest in training farmers, supplying farm inputs and developing infrastructure.

A case in point is Ethiopia where only 14,8 percent of the arable land is cultivated. Talks about exploiting the potential of this country are in progress, according to Marie Bos, a researcher at the GRC.

Both the African continent and the Gulf countries face food security issues. In the Gulf, population growth is expected to increase from 30 million in 2000 to 60 million by 2030. This will place severe stress on an arid region with limited food producing capabilities.

The Cooperation Council of the Arab States of the Gulf, also known as the Gulf Cooperation Council states (GCC), will import 60 percent of their food by 2010, according to reports by the Food and Agriculture Organisation. The GCC is a reginal organisation consisting of Kuwait, Bahrain, Saudi Arabia, Oman, Qatar and the United Arab Emirates.

Meer cautioned against aid with strings attached but also emphasised that investors had to ensure that good human rights practices are followed and that all development and trade agreements are transparent.

He added that South Africa’s main trading partners are the European Union (38,5 percent of trade), the U.S. (18,4 percent) and other African countries (14,9 percent).

However, the European Union and the U.S. are experiencing major financial crisis which has already seen a decline in different trade sectors.

A number of delegates emphasised the need to diversify markets and service delivery while expressing concern about the strain of the global economic meltdown and the plunge of oil prices.

Dubai, where oil revenue has boosted development for over a decade, saw its property market plunge when the global oil price plummeted to about 37 dollars a barrel at the end of last year, leaving the country with a huge deficit. Dubai’s neighbour, Abu Dhabi, has stepped in with a 10 billion dollar bailout plan.

‘‘As the world economy is hit hard by a global phenomenon, emerging markets such as the Gulf and Africa, which have relatively speaking been less affected, must work on a strong recovery,’’ Abdulaziz Sager, chairperson of the GRC, wrote in the memorandum spelling out the aims of the Gulf-Africa Strategy Forum.

‘‘This move cannot be deemed sustainable without a better understanding of the other and a strong political commitment.’’

Dr Tomaz Augusto Salomão, the executive secretary of the Southern African Development Community (SADC), told delegates that by forging strategic partnerships between Gulf and Africa regions, new investment opportunities can be opened up for the emerging economies of the Gulf to invest in Africa.

The continent is especially attractive because a number of countries have sustained economic growth of five percent and more over the last five years.

According to Salomão, foreign investment into the SADC region is more attractive than it has been for decades.

This is because some countries have established investment agencies which act as one-stop investment centres; SADC countries have relaxed barriers to foreign investment; and they have introduced a mix of investment incentives.

There has also been substantial liberalisation of exchange regulations.

With its population of 230 million people, SADC’s gross domestic product (GDP) was about 250 billion dollars in 2007. This is more than the GDP of the Economic Community of West African States (ECOWAS) and more than half of the whole of sub-Saharan Africa’s aggregate GDP.

SADC’s total exports were worth more than 65 billion dollars.

‘‘The investment and trade opportunities for the GCC in the SADC region are diverse and range from sectors such as infrastructure, agriculture, energy, tourism, forestry and mining.

‘‘Our responsibility is to promote dialogue between our regions, engage the private sectors and take advantage of the healthy business environments which our two regions offer,’’ Salomão said.

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