Not everybody is probably aware of what is currently happening to land acquisition in the developing world. It is normal not to be aware as not much information circulates in the news about these incredible facts, at least not as much as it should. This weekly brief will then try to put some light on the issue of land and water grabbing.
Investments in the developing world are nothing new, for decades developed countries industries’ have decided to relocate their production sites in developing countries gaining from many economic and financial benefits at the expense of questionable social and environmental impacts for the hosting country (although many would argue otherwise). The transfer of activities, of capital and of employment in areas of a country or of the world which have competitive advantages (cheap labor force, government’s incentives, tax exemptions etc….) is what characterizes our current world economies.
In the past 10 years because of the global food crisis and food price increases, food-insecure countries (ex: China, Egypt, India, Gulf states etc…) try to source food production from less-developed countries (Gamundi and Hanks, 2011) by investing massively in land. This new trend brings to the forefront many discussions and debates such as if land grabbing is often associated to secure other natural resources and whether these deals create win-win situation for the investing and hosting countries. Some of these issues are further discussed below.
With land acquisition comes the issue of water resources. In the Economist article of 2009, Peter Brabeck-Letmathe, the chairman of Nestlé, claimed that the deals were mainly about water and not entirely about land as “with the land comes the right to withdraw the water linked to it, in most countries essentially a freebie that increasingly could be the most valuable part of the deal” (The Economist, 2009). So water and food stressed countries instead of buying the goods they need on the world market they are directly buying the resources in other’s countries in other to provide their countries food and water security.
Some argue that from this deals the hosting countries might gain a lot, as they are promised a lot of money, job opportunities for the local population and local investments for rural infrastructures and new agricultural technologies in their countries (Von Braun and Meinzen Dick, 2009). Other argue that we are experiencing “a globalization with Chinese characteristics” (see Hofman and Ho, 2011) or talk about neocolonialism (GRAIN, 2010). Many others however, analyzed that hosting countries have much more to loose than to gain out of these deals as illustrated below by the most cited examples found in the literature.
In 2009 Saudi investor invested a lot of money in Ethiopia for securing their country’s cereal production. They are allowed to export back their food production and are exempted from taxes, the Economist (2009) revealed that in that same period instead the World Food Programme was investing millions of dollars in Ethiopia to save million of lives threatened by hunger and malnutrition.
In Madagascar in 2008 the government without consulting its citizens decided to sell 1.2 million hectares of land – one third of Madagascar’s farmland – to a Korean company (Horring, 2011), massive demonstration led the fall of the government in charge and to stop the deal.
In Malawi same kind of demonstration scenario happened stopping the deal between the Malawian government and a British company (Horring, 2011).
In Mali the government by giving away land to a Libyan company “granted the company priority access to water during the dry season. As a result, local producers suffered reduced access to water from the Niger River, the main source of irrigation water in the region.” (Horring, 2011:3).
Concluding, it is important to notice that land grabbing is not only happening for food and water security reasons but also for energetic ones (Osava, 2011). Much foreign land in developing countries is being bought to grow biofuels as alternative to oil. Whatever the reasons for such investments the problem behind them is that they raise many concerns.
In fact, poor countries’ national sovereignty suffers from such foreign intrusion of richer countries that have the political and financial strength to dictate the terms of the contracts. These deals have been proved to be environmentally damaging for the hosting countries as often environmental control systems do not exist - they also constitute a paradox in which food insecure countries give away there land to secure other (often richer) countries’ food security. Furthermore, the consequences on local population are said to be dramatic as these lands bought by big corporation are often used by local people living of subsistent agriculture in the area being sold. The contracts are often economically not worth for the hosting countries as job opportunities for the local population are not granted when these investments have the goal to generate employment for the investing country’s citizens abroad and to export its own equipment (Osava, 2011).
Land grabbing therefore raises many questions and concerns, it could be helpful that these events be discussed and recognized at the international level in order to put some boundaries and control mechanisms on such speculative land markets deals. It should be also wise that hosting countries build their capacity to evaluate the real consequences and have the strength to set the rules when bargaining such arrangements. It would not hurt also to make more studies and research on this phenomenon that is currently under-searched in order to really assess what are the benefits and drawbacks for the different parties. It is of course easier said than done; however, it seems extremely necessary.
By: Giorgia Donin
References
Hofman I. and Ho P., 2011, Rethinking China’s ‘land grabs’: Chinese land investments in Central Asia. Available at: http://www.iias.nl/sites/default/files/IIAS_NL58_21.pdf (Accessed 14 November 2011)
Horing U., 2009, Water and Land Grabbing, Ecumenical AdvocacyAlliance, Geneva: Switzerland.
Gamundi and Hanks, 2011, Land-Grab Loopholes in Latin America. Available at: http://www.worldpress.org/Americas/3794.cfm (Accessed 14 November 2011)
GRAIN, 2010, Land Grabbing in Latin America, Available at: http://www.grain.org/article/entries/3995-land-grabbing-in-latin-america (Accessed 14 November 2011)
The Economist, 2009, Outsourcing's third wave. Available at : http://www.economist.com/node/13692889 . (Accessed 14 November 2011)
Osava M., 2011, China and Brazil Inundate Latin America with Dams. Available at: http://ipsnews.net/news.asp?idnews=54329 (Accessed 14 November 2011)
Von Braun J. and Meinzen Dick R., 2009, Land Grabbing” by Foreign Investors in Developing Countries: Risks and Opportunities. IFPR policy brief 13.
Photo courtesy of farmlandgrab.org