With the coronavirus pandemic placing pressure on international trade and global supply chains, Kuwait has moved to strengthen its food security through increased international cooperation and investment in agriculture technology (agri-tech).
On April 17 the GCC adopted a Kuwaiti proposal to create a joint food supply network across the bloc.
Triggered by concerns about Covid-19-related disruptions to trade, the countries agreed to set up special arrangements at border control and Customs posts, in order to facilitate the movement of basic food and medical supplies within the six-member alliance.
In addition, Kuwait sought to further consolidate its food supplies in April by striking a deal to streamline the importation of Egyptian products, which were previously subject to extensive testing, while it also approved imports of beef from Brazil.
Furthermore, Kuwait has increased investment in its own agricultural capacity.
On April 6 Kuwait’s Wafra International Investment Company announced that it would invest $100m in regional start-up Pure Harvest, representing the largest ever commitment to an agri-tech firm in the Middle East.
The funding will support the company’s plans to construct high-tech, climate-controlled greenhouses that use natural sunlight to produce pesticide-free fruit and vegetables. The development of such technology is particularly relevant in countries such as Kuwait that enjoy a high rate of annual sunlight but low rainfall.
Although the company is headquartered in Abu Dhabi, Pure Harvest representatives said that the funding will be utilised for expansion across various Middle Eastern markets, among them Kuwait.
Improving food security
The development of agri-tech and domestic agricultural production has become a key issue for Kuwait and other Gulf countries in recent years, as governments have highlighted the importance of food security.
Changing climatic patterns in key agricultural exporting countries – including the increased prevalence of desertification, drought, flooding and other extreme weather phenomena – have placed pressure on the global food chain, according to the UN, potentially leaving low-production agriculture countries like Kuwait at risk of food shortages.
The importance of building resilience has been underlined in recent months by the Covid-19-related disruption to global supply chains. As the virus has spread, many countries have closed borders, cancelled flights and implemented lockdowns, impacting many pre-existing food linkages.
While these challenges have spurred some countries to take issues of food security seriously for the first time, Kuwait had already been making progress on this front.
In the 2019 Global Food Security Index, compiled by the Economist Intelligence Unit, Kuwait was ranked 27th out of 113 countries, and fourth out of 15 in the MENA region.
Although it rose just one position against its 2018 ranking, Kuwait was labelled the world’s most improved country in this most recent index, largely thanks to an upgrade of agricultural infrastructure, including new grain silos and expanded crop storage capacity at ports.
Broader stimulus
Efforts to improve food security come amid broader measures to support the economy in the face of the virus-induced economic downturn.
Due to Kuwait’s substantial dependence on oil revenues, which accounted for 43.7% of GDP in 2018, the country has been doubly affected by the dramatic fall in global oil prices that accompanied the outbreak of the pandemic.
To help offset these challenges, on March 16 the Central Bank of Kuwait cut its benchmark interest rate by 100 basis points to 1.5%, while on April 2 it released a stimulus package that, among other measures, made $16.5bn available for additional lending from local banks.
Despite these actions, the economy is expected to contract by 1.1% this year, according to the IMF’s revised annual outlook, released in April, down from 0.7% growth in 2019.
On the medical front, as of May 3 Kuwait had 4983 confirmed cases of Covid-19 and 38 virus-related fatalities.
Kuwait’s robust health care response has been aided by one of the highest per capita testing rates in the world, with 45,988 tests conducted per 1m of the population.
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