The growing global food crisis is replacing the credit crunch and may have deeper impact on the world’s economy, according to India’s Minister for Commerce and Industry Kamal Nath.
Agriculture, he said, is under extreme pressure due to the global imbalance between supply and demand.
“In India, we have a major challenge to face inflationary pressures. There is a high growth rate and the struggle is how to manage this growth because it is creating problems. The real challenge is how to manage food supplies for more than one billion people, while they are shifting from eating one meal per day to two meals per day.”
Challenges faced by food producers such as India reverberate around the world, including the UAE. During his recent visit to the UAE, Nath ruled out lifting his country’s ban on rice exports, despite the issue being raised during his talks with UAE authorities.
“The rice situation in India is very tight and we will discuss rice exports to the UAE internally, in India, and I am sure we will find a way.
“There is no problem with the production as there is a significant growth in rice production, but the demand is increasing very rapidly. There are also indications that the rice production this year will be good,” he said.
Meanwhile, Nath rejected the idea of imposing price caps to control increasing food prices in India.
“Inflation needs management of supply and also monetary policies, but imposing price caps will be on the producers of food, not in the retail market, so the idea cannot control prices.”
The Indian minister also highlighted the excellent UAE-India trade ties, noting UAE investments in India achieved around 19 per cent profits last year, the highest profit rates in the world.
“Discussions with His Highness Sheikh Mohammad bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai, and other government ministers focused on expanding UAE investments in India, especially in infrastructure projects through creating joint ventures, mutual funds and commercial investments. The UAE-Indian trade balance increased by 90 per cent in 2007 over 2006 in favour of India and we are looking to increase trade activities between the two countries.
“We also discussed ways to increase trade and investments as we want more investments in infrastructure projects and there are huge opportunities in India.”
And Nath predicted a breakthrough in negotiations for a free trade agreement between India and the GCC. “I expect the negotiations will achieve good progress this year. There are 3.5 million Indians in the region. This deal will add an economic dimension to the historical relations between India and the Arab World.”
Corporate governance award
The Hawkamah Institute for Corporate Governance and the Emirates Bankers’ Forum will begin accepting applications for the first UAE Bank Corporate Governance Award to promote good corporate governance practices among banks in the UAE.
Nasser Saidi, Executive Director of Hawkamah, said the award offers an ideal opportunity to recognise and acknowledge those banks that have shown a commitment to improving their corporate governance in accord with best international practices.
“Given global banking and financial turmoil, the UAE’s banking industry has shown resilience and strength. Implementing stronger corporate governance practices will enhance soundness and competitive position.”
Banks can apply for the award, starting April 27, through the Hawkamah website.
Global food crisis to replace sub-prime