QATAR POISED TO INVEST IN PAK LIVESTOCK

TARIQ AHMED SAEEDI 
(feedback@pgeconomist.com)
Mar 22 - 28, 2010

Qatar can secure its food supply by enhancing relationship with Pakistan in the field of agriculture. Pakistan's livestock, fisheries and poultry sector has immense potentials that can be tapped through investments to become cost effective replacements of livestock imports the oil and gas giant make from India and Australia. Pakistan's food processing industry is also virgin. That also gives a guarantee of fast return on investments by pioneers.

By importing livestock from India and Australia, Qatar meets a significant portion of its local demands of foods and bovine animals. However, for quite some time, Qatari food groups have been trawling through other markets around the world to secure food supply as well as to expand their businesses to profitable places. The government of Qatar backs this forward move of companies to bring sustainability in supply in the long run.

"I am seeing big names from Qatar to be entered in livestock sector of Pakistan in near future," says Majyd Aziz, a leading businessman who has hosted various foreign delegations as representative of business associations. "Food security is an important issue for that region."

Last year, an understanding was reached between governments of Pakistan and Qatar about the sourcing of live animals from Pakistan. This was estimated to be million of dollars project. Next step to understanding is awaited.

Pakistan has a fertile land. Due to lack of investments, its agriculture and livestock sector cannot achieve desirable production. A small part of livestock sector has been explored so far. There are many areas such as establishment of scientific production chain from abattoir to meat packaging, milk processing plants, upgrade of leather industry etc. that need to be tapped. Many remote locations around the country have compatible environment for livestock rearing. However, they are underdeveloped. Foreign and local companies have embarked on milk processing and packaging area. They set up collection points to collect milk from local milkman.

Companies from Qatar have already made considerable investments in the financial and telecom sectors of Pakistan. Qatar Telecom's subsidiary wi-tribe is penetrating in the wireless internet market, spurred by its commitment to quality delivery. Apart from this, many an ambitious projects have also come on the table for discussion bilaterally. Some of them included related to power sector, cement sector, hotel industry, and real estate. Supply of LNG to Pakistan is yet another mega project, in quandary because of infrastructure constraints in Pakistan.

Pakistan's construction companies are also expanding business operations to Qatar because of developments in the country. Descon Engineering, a Pakistan based engineering and construction company, is undertaking infrastructure construction projects in the Middle East. Qatar is emerging as industrial and financial hubs of the Gulf after the debacle of Dubai financial market.

Qatar food companies are planning joint venture with different countries in Asia and Africa in animal husbandry.

Oil-rich countries are tapping sovereign funds to enhance agriculture production of the host economies mainly underdeveloped for the benefits of and feed to their local population. Investment in agriculture and livestock of agro-based countries is becoming a profitable business for companies of developed economies. Buying spree of farmlands in agriculture developing countries by affluent foreigners have emerged an often-heard controversial phenomenon in recent time. The pros and cons apart, lease of farmlands to foreign countries triggered a debate about the possible reincarnation of colonilization. Maybe an overstated remark to some this sounds, it would not more than an overlooking to concerns of bellwether international body such as United Nations that foreign farmland acquisitions may compromise the rights of farmers in the farm selling nations. Once this concern is resolved and exploitative approach of investors checked, experts find no harm in lease of farmlands to foreigners.

Several food companies of Gulf are embarking on join venture with companies in agriculture rich countries. According to the International Food Policy Research Institute, foreigners purchased 20 million hectares of farmlands during 2006-2009.

Qatar is focussing on to increase food security in the country and therefore it is making agreements with agriculture countries in the field of food industries. The Arab state is also pouring direct investments in animal husbandry as well as in agriculture in the agriculture rich countries of Africa and Asia. Two years back, Qatar established a joint holding company in collaboration with Sudan to explore areas related to agriculture, animal husbandry, and food industry.

QATAR AS OIC MEMBER

Qatar has a little share in inter-trade of Organization of Islamic Conference (OIC). The reasons partly recline in its trade dominated by capital goods, agriculture products, petroleum products, etc. Its exports are so just channelized outside the block as its imports from it. Trade potential within the member states of OIC is untapped. Inter-trade can be amplified in many areas. Import baskets of member countries are mainly dominated by capital goods. However, foods and agriculture products constitute principal imported product of most of the member countries of OIC. Mineral fuels accounted for 36 to 38 percent of intra-OIC exports in 2007. Pakistan ranked 9 with 13.36 percent while Qatar with 1.32 percent share in the overall exports within the member states. Qatar imports products from within and outside the block ranging from heavy machines, motor vehicles to farm products. It is worthwhile to remember that machinery and transport equipments form a major import of Qatar constituting almost half of total imports in the country (over 44 percent). However, other manufactured articles (25 percent) follow it-16 percent of total OIC imports. Generally, petroleum products are major exports from the countries. As per the structure of the world imports of the OIC member states, imports of live animals chiefly for human consumption by the member countries accounted for 7.32 percent of total such imports in the world in 2007. Pakistan's share of imports was not more than 3.41 per cent while Qatar had 4.31 percent share in total imports of foods across the world.

According to a report, trade potential exists in agriculture and hunting (18.9 percent), textile and clothing and leather (17.5 percent), coke, petroleum products, and nuclear fuel (16.1 percent), motor vehicles, transport equipments, non-metallic mineral products, electrical and electronic equipments, metal and metal products, chemical and chemical products, and rubber and plastic.