By Peter Alagos/Business Reporter, Gulf Times
Economic diversification through investments in food production projects will help Gulf Co-operation Council (GCC) countries save an estimated $20bn in food imports from the US, an expert has said.
International oil economist and World Bank consultant on oil and energy issues, Dr
Mamdouh G Salameh, explained that GCC countries should look to Sudan and in “thriving and futuristic industries worldwide” for food production projects.
In the research paper Factors behind the steep decline in oil prices, which he delivered in a forum recently, Salameh said: “The proposed mode of economic diversification for the Gulf states is not industrialisation.”
Salameh argued that Gulf countries “would never be able to compete with the top industrial nations in the world though some form of industrialisation in petrochemicals has been taking place, particularly in Saudi Arabia”.
He added: “Nor does it mean investing in real estate, but rather in food production projects, for instance in Sudan and also in thriving and futuristic industries worldwide.”
Salameh warned that amid predictions of a global food shortage, “food prices could rival, if not exceed, those of crude oil” in the future.
He said that pouring investments in Sudan could transform the country into a breadbasket for GCC countries.
It could also serve as a source of food export revenues, which could shave off $20bn worth of food imports from the US.
“It is important for GCC countries to invest in food production, however not as individual countries but as one unit. They should invest in Sudan because it has water from the Nile River and it is the third biggest arable land in the world,” Salameh told Gulf Times on the sidelines of the forum.
He added: “By investing in Sudan’s food production as a unit, the Arab Gulf countries could be a formidable economic bloc. Whatever extra food they can produce, they can export these at a great price in the coming years.”
According to Salameh, it is also advisable for Gulf countries to “invest heavily” on renewable energy, particularly solar energy, which could meet all the electricity needs of the region.
“Qatar can still diversify. While it can use natural gas or oil for desalination, it can also invest heavily in solar power and use the technology to fuel its desalination plants. By doing so, Qatar can expand the number of its desalination plants and make sure it has enough water, not only for drinking, but also for irrigation for many years to come,” he said.
Salameh estimates that Qatar is using around 300,000 barrels per day (bpd) of oil for desalination, fuel consumption, and electricity generation, among many other energy needs.