Mohammed Alardhi is the executive chairman of Investcorp, chairman of Muscat Stock Exchange MSX and chairman of Royal Jet
December 10, 2024
A crucial aspect of planning for the future is re-examining food security in the context of climate change. The onus is on every nation to aim for every citizen to have access to safe and nutritious food considering four dimensions as outlined by the World Bank.
These include physical availability, economic access, use and stability over time. Food security relates to a number of the UN Sustainable Development Goals. Some of these goals are: ending world hunger and malnutrition, health and well-being for all ages, access to affordable and clean energy, promoting employment and economic growth, building resilient infrastructure, promoting inclusive and sustainable industries, making sustainable cities and communities, ensuring responsible consumption and production, and taking action to tackle climate change.
It is imperative for any nation attempting to achieve food security to strategically develop local farming systems that are sustainable and built to produce enough to meet local and national demand, as well as for export. Oman has been proactive in expanding its agriculture sector, optimising use of national resources and employing cutting-edge technology to expand output. Last year, the sultanate invested about $890 million, part of the government's strategy to increase food security and diversify economic interests according to Vision 2040.
Planning and investment can help in mitigating those risks and safeguarding the future
Further, Oman's agriculture and fisheries sectors witnessed an increase in gross domestic product from $1.09 billion in the first half of 2023 to $116 billion during the same period this year.
There are also 137 food projects under way, the most notable being the Saham Agricultural City, a hub that is set to employ advanced technologies including hydroponics, aeroponics and fish farming in order to provide food to 25,000 people a year. This will create more jobs and allow farmers to maximise output, reducing the sultanate's reliance on food exports.
To offset the effect of climate change, a radical transformation led by strategic government planning – like it has been in Oman – is crucial, since there are looming threats that could limit both physical and economic access to food in many countries. The sultanate's efforts can offer a case study for nations that have not prioritised agribusiness so far. It is not too late to invest in this sector and waiting longer could lead to serious crises for their citizens in coming years.
Climate change can have detrimental effects on agriculture, from loss of natural resources, excessive precipitation, excessive heat, drought, new pests and diseases to name a few. In order to mitigate such changes and have action plans for damage reduction and control, nations must be proactive and armed with the tools they may need beforehand.
Muscat Fish Market in Oman. Sopa Images
The reduced growth of major crops will lead to a drastic drop in supply, driving up prices. Before facing such a predicament, countries can look into alternatives and diversify production while encouraging food consumption patterns that honour seasons, along with livestock and crops that are abundant.
Aside from investing in existing agricultural frameworks, nations can adopt best practices and technologies from leaders in production of specific livestock and crops that are most likely to withstand changes in their climate. Other initiatives towards net zero emissions will also contribute to sustainable agriculture initiatives and subsequently food security.
These could include: creation of sustainable, natural ecosystems and increasing the use of zero-and low-emission vehicles, increasing solar and wind capacity, creating new buildings and machinery that meet strict energy efficiency standards, increasing public transport, decarbonising industries such as aviation, cement and steel, and reducing food loss and waste.
Humanity is at a critical juncture. We are aware of the risks associated with mass production models that have taken over the mainstream over the past few decades. There is no better time than now to piece together the acumen and technology we have acquired with the sustainable, community-centric practices of our forefathers. These are a hallmark of the Omani tradition, and they use the best of our past and present to pave the way for a secure and prosperous future.
Oman has come a long way in just a few decades, developing at a rapid but consistent pace and evolving with the times to protect its future. It goes to show the power of communal mindsets and collective commitment towards moving forward while also honouring the past. This serves as an important lesson for other nations that could achieve similar success through strategic leadership and a push for community engagement.
While climate change poses a series of risks to food security and overall human well-being, planning and investments can help to mitigate those risks and protect the future.
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
Holiday destination: “I like Paris very much, it’s a city very close to my heart.”
Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”
Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”
Avatar: Fire and Ash
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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First Job: Abu Dhabi Department of Petroleum in 1974
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work
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