Increasing Agricultural Productivity:
Encouraging Foreign Direct Investments in the COMCEC Region
49
Figure 20: FDI and International Trade for the COMCEC Member Countries in Different Stages
of Development
Source: ICA, 2013.
Countries in each stage require different types of FDI, whereas countries in stage I are much
more in need of investments in physical infrastructure and equipment to improve the process of
agricultural production. Farmers in stage II countries seek for capital investments to increase
their farms and machinery to achieve economies of scale that would enable them to compete on
the international trade markets. Finally, large production firms in stage III countries need FDI in
know-how as well as research and development to remain leading companies, raising quality
standards and constantly improving efficiency levels. Even though the GCC countries, located in
one of the most arid regions of the world, may never become self-sufficient in agricultural
production, much less significant exporters, they belong in Stage III, since their agricultural
production is increasingly based on water-saving technology and other advanced techniques. In
Section 3 of this report, the study briefly discusses Qatar’s efforts to develop a technology-
intensive agricultural sector. The table given in Annex 2 shows the classification of the COMCEC
Member Countries by stage of development in terms of Agricultural FDIs.
Ensuring that food production keeps up with population and income growth, changing dietary
patterns and climate conditions is a global challenge. According to the FAO estimation, the
world’s population will reach around 9.1 billion people in 2050, a 30 percent increase from
current numbers, but demand for food will grow by 70 percent.
To keep up with the pace of demand growth, growth in agricultural production needs to
improve drastically. In assessing the potential of COMCEC Member Countries in relation to FDI
Stage I – Low Income
Dependent position
Stage II – Medium Income
Self sufficient
Stage III – High Income
Independent position
Domestic production
&
Necessary Imports
Domestic production
&
Import substitution
production
Domestic production
&
Sufficient Import and/or Global
Export Production
Foreign Direct Investment (FDI)
Process Driven FDI
Increase Primary Productivity
Capital Driven FDI
Increase Value addition
R&D Driven FDI
Knowledge addition
International Trade