Urgent cooperation on food security should span Asia


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In a bid to improve its food self-sufficiency, the Republic of Korea initiated a green revolution in the 1970s, the so-called saemaeul woondong or "new village movement". The goal was simple. After years of war and constant famine, our nation needed to find solutions to persistent food insecurity.

The results have been remarkable. While early goals focused on expanding agricultural infrastructure, building roads and distributing seeds, Seoul has managed to achieve a level of self-sufficiency in rice production, our staple crop. Profits are up, and more food is grown in the country than at any time in the last four decades.

Nevertheless, Korea is far from food self-sufficient. Korean farmers are only able to produce around 9 per cent of soybeans, and less than 1 per cent of the wheat and maize needed for domestic consumption. Korea has made continuous efforts to increase local production, promote rational eating such as consumption of appropriate amount of calories, and lessen food waste.

The UAE faces similar challenges. While circumstances leading to the UAE's food dependency are different from Korea's, this country is also far from achieving self-sufficiency in food production. The UAE Ministry of Economy estimates that about 85 per cent of the UAE's total food consumption depends on imports. Food consumption, meanwhile, is growing at an annual rate of 12 per cent due to rising population fueled by economic growth.

Like the UAE, Korea is suffering a shortage of land with only 1.78 million hectares of agricultural area. To address these physical constraints, in 2009 the government in Seoul launched an overseas agriculture development programme aimed at securing 1.4 million tonnes - about 10 per cent of domestic consumption - of overseas grains such as corn, wheat, and soybean.

As a result, Korea secured 55,000 tonnes of overseas grain in 2010. Meanwhile, the Korea Rural Community Corporation (KRC) has supported companies with information and data on overseas agriculture businesses. As a public corporation that has promoted agricultural water management and domestic food security for more than 100 years, the KRC has led modernisation of domestic infrastructure for agricultural production to ensure a stable food supply.

Since 1972, it has been contributing to global food security and rural development with water resource development projects as well as rural development projects in 24 countries including Angola, Tanzania, Indonesia and Bangladesh.

The challenges the UAE faces are similar to Korea's. And as we learnt decades ago, food security, while a sovereign concern, can not be solved alone.

Indeed, food insecurity may deepen political and social unrest, with the famine in East Africa an urgent example. Countries in the region and around the world have been harnessing all of their available resources to prepare countermeasures. A recent Asia-Pacific Economic Cooperation (Apec) dialogue noted that the world is facing three unprecedented realities on the food security front: deficiency of arable land, water shortages and the slow pace of research. More work is clearly required to find solutions, and greater cooperative programmes should be an immediate priority.

There are immediate as well as long-term ways to do this. For one, there is a desperate need for precise market data such as stock volumes so that market participants can make decisions based on need. Importing nations are also vulnerable to price volatility - the G20 nations recently announced plans to control price swings in markets. What are needed are financial instruments to support importing nations.

Finally, there should be schemes to rein in excessive export restrictions. Some restrictions that might have a huge effect on global grain markets such as embargoes should be imposed only in close consultation with the UN Food and Agricultural Organisation and other relevant international organisations.

The UAE is already taking steps to address its own food security challenges. Federal officials in Abu Dhabi are drawing up several policies to address food insecurity: building strategic food reserves; abolishing exclusive importation rights on key food items such as rice, tea and cooking oil; and establishing a database to track supply and demand as well as prices. Such efforts seem to promise long-term food security.

There are also opportunities for high-level cooperation between Seoul and Abu Dhabi in the more immediate term. Drawing on lessons from saemaeul woondong, Seoul has gleaned insights that other nations might benefit from.

As an example, water resource development is a major driving force for improved agricultural productivity. Korea has valuable experience in the construction of large-scale groundwater development projects in Libya. At home, Korea has also been pushing national policies aimed at obtaining stable water resources and developing reservoirs.

The field of cooperation between the UAE and Korea has been diversifying, from nuclear power plant development to petroleum, military, medical care and renewable energy since the two countries forged a strategic partnership in 2009. Based on that partnership, the two countries have also started to put a priority on agricultural cooperation to secure stable food sources in response to the worldwide food crisis. As Korea learnt decades ago, feeding a nation takes hard work, vision and, most of all, a healthy appetite for cooperation.

Hong Moon-pyo is the chief executive of the Korea Rural Community Corporation

Generation Start-up: Awok company profile

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Sector: e-commerce

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer