x Abu Dhabi, UAEWednesday 17 January 2018

Security concerns delay talks between UAE and Pakistan

Negotiations to discuss farmland sale. President Pervez Musharraf's resignation triggered suicide bombings that killed 60.

Pakistani people struggle to buy flour at state-controlled rates at the Sunday Bazaar in Lahore.
Pakistani people struggle to buy flour at state-controlled rates at the Sunday Bazaar in Lahore.

DUBAI // A UAE delegation planning to leave for Pakistan within weeks to negotiate the purchase of farmland for food production has been delayed by political instability and security concerns in the country. Islamabad was preparing to host a six- or eight-member delegation from the UAE in mid-September. The group intends to learn more about the agricultural potential of several parcels of land for sale.

However, sources said authorities expressed concerns about security last week after the former Pakistani president, Pervez Musharraf, stepped down to avoid impeachment. The resignation triggered suicide bombings that killed more than 60 people and helped splinter Pakistan's fragile ruling coalition. "It's a combination of both the security situation and month of Ramadan when most people avoid travelling," said a senior Pakistani official who spoke on the condition of anonymity. "Pakistan will have a new president early next month and that would resolve the current political crisis."

The official said the delegation was expected to leave for its tour of several locations in the Sindh and Punjab provinces in November, once the country was more secure. "This visit is critical in concluding the farm talks. Proposals which have been on paper prior to this visit will take material shape." He said that once they arrived in Pakistan, members of the delegation would be able to negotiate directly with officials from the agriculture ministry, as well as individual farmers.

The UAE delegation is to include a representative each from the Ministry of Economy and Ministry of Agriculture, as well as up to six senior officials from public and private firms involved in the business of importing food. The Ministry of Economy and individual investors have been in talks with Pakistan since the beginning of the year to buy large chunks of land in Pakistan's proposed agricultural free zones.

The UAE is heavily reliant on food imports and secures about 85 per cent of its supply from abroad at an estimated cost of Dh11 billion (US$2.99bn). Soaring food prices and rising inflation have forced the country to look at other options - like owning the sources of produce in other countries - to lower its food import costs. In early June, a source familiar with the talks said Pakistan was expecting a potential investment of between US$400 million (Dh1.47bn) and $500m in land deals involving up to 80,000 hectares. About 44 per cent of Pakistan's population of 160 million is involved in agriculture, which accounts for 21 per cent of the country's gross domestic product.

The sector has grown by 4.6 per cent since 2006, ahead of China, India and Malaysia. Farming families in Pakistan traditionally have large land holdings and are eager to partner with Gulf investors. Punjab, the largest agriculture-producing province in Pakistan, has already set aside 4,046 hectares of prime land for the proposed free zones, while provincial governments in Sindh and Balochistan are planning similar land offers.