Food Shortage and Econominc Development

Today I’m wearing my  global economic development hat, so bear with me as I tell you a bit about some of the things I’ve been contemplating.   

I don’t know about you, but I’m fascinated by the economic changes that are happening in the world today.  Change is coming at us fast and hard, and it is the job of consultants like me to translate this change for my clients.  It’s my job to determine how these changes affect their organizations and the way they approach economic promotion. Most of this change is tied to globalization.

On any given day, I'm bombarded with massive quantities of information, I analyze it, and I ask the simple question, “How does this relate to my clients?” 

Are there and opportunities for my clients or does this adversely affect them?

The information I process ranges from headlines in the Financial Times which report that one of the Middle East’s largest private equity companies, Dubai-based Abraaj Capital, is working with the United Arab Emirates government to buy farm land in Pakistan.  The investment is part of their ‘food security’ strategy. 

Ok, why do they have a ‘food security’ strategy?  Why buy farmland in Pakistan?   Come to find out, the United Arab Emirates imports over 85% of their food.  Just as we’re searching for new energy and oil sources, the UAE has its own commodity strategy for food. 

I work with a number of rural communities that don’t have many economic assets to promote to potential investors, but they do have land and they do have a farming legacy.  Many of the farms in the region were small and failed.  A big farming investor could revitalize a region with an agricultural offering…might be interesting.

Almost any proposition in the U.S. is interesting for foreign companies right now because of the de-valued dollar.   

Most analysts believe that European companies will move quickly to take advantage of currency related cash savings.  Greenfield investment in the U.S. is expected to jump significantly in 2008/09.  Greenfield investment is funded by corporate retained profits, so most likely, it will remain unscathed by credit market woes, increasing direct investment activity.  Many believe that there is no better time for foreign companies to invest in America.

Last year, foreign direct investment into the U.S. grew last year to almost 8% of the global market.  According to OCO Monitor, the United States attracted 786 foreign investment projects. 

The U.S. economy is slowing, there’s no doubt about it.  The counsel I give my clients is to revisit their international strategies.  Germany, the United Kingdom, and France are the biggest investors in the U.S. -you have to remain competitive, even if the playing field has moved off-shore. 

There it is again, globalization.  International is where it is at for now. Give me a call and let’s talk about how we can work together to get your foreign direct investment strategy off the ground.