JEDDAH: Day three of the 10th Jeddah Economic Forum 2010 marked plenary sessions on as diverse subjects like energy and the environment, tackling protectionism in trade and investment, and agriculture and food security.
Panelists discussing agriculture and food security referred to the prudent measures taken by the Kingdom by striking deals with overseas farmers and agriculturists. They said increased cost of production, climatic variability and biofuel production had serious effects on the supply side. "Most importantly, under investment in agricultural infrastructure and strain on water resources has played a major role in the crisis," Intithar Hussein of the Islamic Development Bank said. While the conditions that caused the crisis remains, there is a risk that they may trigger another unless adequate action is taken, he added.
Sami Baroum, managing director of the Savola Group of Industries, outlined the logistical relationships between food producers, traders and processors. "The connection between all three areas in the agricultural industry is mutually beneficial," he said and pleaded for the establishment of broader international ties and adoption of regional scale logistics to link global markets. One other speaker observed that food security might as well become one of the key issues of the century. "In fact, water scarcity is one for the limiting factors of food production," he said and urged world economies to give priority to food security.
The discussion on energy and the environment was partly devoted to oil as a source of energy that will continue to be of major importance as developing countries expand their economies. "However, in the context of the ongoing debate on environment factors, oil conservation ought to be one of the most important sources," a senior advisor to the minister for petroleum and mineral resources, said. Mohammad Ali Al Sabban pointed out that moves to address climate change would reduce dependency on Middle East oil.
On protectionism, Abdel Aziz Abu Hamad Aluwaisheg, director general, international economic relations of the GCC, highlighted some important steps that Saudi Arabia recently took toward opening up its market: In 2001, it unilaterally reduced its import tariffs by over 30 percent; in 2005, it joined the WTO and in the process eliminated many barriers to foreign investment and outlawed the most egregious forms of monopoly; and in 2008, it eliminated protective tariffs on scores of goods.
The Saudi General Investment Authority, he said, has vigorously sought and assisted foreign investors to enter into areas that had been out of limits for foreign investors. "But we should not stop there, despite the international trend toward protectionism, because liberalizing our own market is intrinsically beneficial," he said.
On the regional level, Aluwaisheg referred to GCC's measures toward liberalizing its internal market, including two recent milestones: The GCC Customs Union and the Common Market.
Swedish Minister of Trade Dr. Ewa Bjorling was forthright when speaking as a panelist she emphasized protectionism would pull the world back to a situation similar to the 1930s. "However, institutional initiatives like the WTO have been monitoring protectionism successful in reversing some trends."
She acknowledged that the pressures for restrictive measures would continue, which, however, underscores the need for more concerted and joint action. Open trade and investment are essential even for other challenges such as climate change as trade promotes technological innovation, she said and stressed that an economy needs to be open and trade-oriented to bring about prosperity. Regarding her thoughts on how the GCC Unified Currency would affect the trade environment in the region, the EU, and the world, Bjorling said she felt it was a positive step to have a unified currency in the GCC. "I feel it is a positive move that will make trading with the region easier and work more in promoting trade ties."
By K.S. RAMKUMAR
© Arab News 2010
