Islamic Finance as a Mechanism for Bolstering Food Security in the Middle East: Food Security WAQF
Sustainable Development Law & Policy 13, no. 1 (2012): 29-35, 63-65
11 Pages Posted: 5 Jun 2013 Last revised: 20 Jun 2013
Date Written: December 1, 2012
Food insecurity is a global threat. The nature of food and the means of its production make food insecurity a uniquely complex problem, with social, political, economic, and ethical dimensions. Serious efforts to promote food security and sustainability must respond to the complexities of the challenge. The Middle East is particularly susceptible to food insecurity. Middle Eastern states have attempted to address food insecurity through food subsidies, export bans, price ceilings, and other policy measures. In addition, Arab countries, particularly GCC states, which lack the arable land and water resources necessary to produce food sustainably, have also pursued other avenues such as acquisition of long-term agricultural land rights overseas. While the logic of these land acquisitions is clear, their sustainability is not. The acquisition of agricultural land to produce food exclusively for the benefit of acquirer countries is legally and politically risky. It is not difficult to envision scenarios in which yields generated on overseas land would be wholly or partially expropriated, subjected to export bans, or otherwise intercepted, particularly in events of local or global food shortage and political or social unrest. More immediately, overseas land acquisitions by some Arab countries are detrimentally impacting the food (and water) security of other Arab countries. For example, Arab countries including Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates, are believed to have acquired agricultural land or land use rights in the Sudan and other Upper Nile countries. These acquisitions (and those by non-Arab countries and private parties) in Nile Basin countries directly threaten Egypt’s water supply, and consequently its food production capability. In addition to being flawed in a practical sense, these Nile River-related land (and water) acquisitions present risks and interesting legal questions, such as whether state parties that share a common and vital resource like the Nile River may contract out access to the resource to third parties for profit, to the detriment of other states. Such scenarios, particularly where a third-party sovereign benefits from a shared natural resource at the expense of one or more states with direct and assertable rights of access, raise questions about the nature and limits of sovereignty, including the doctrine of permanent sovereignty over natural resources. This article proposes the establishment of a multilateral food security waqf (Islamic trust) as a vehicle for effectively and ethically combining and deploying capital and other resources for investment in agriculture and the financing of essential activities such as research, technological innovation and transfer, agricultural production capacity building, and enhanced access to access to finance, including by small farmers, small and medium enterprises, and other parties across the food supply chain. The waqf structure (rather than a conventional conduit, such as a fund or corporation) is proposed primarily to mitigate the political and legal risks (real and perceived) that tend to deter investment in the region, particularly on a multilateral basis and for regional benefit. Further, the waqf, subject to the environmental protection and equitable investment principles of Shari’ah, provides a more ethically sustainable and effective mechanism for multi-party food security investment.
Keywords: Food Security, Permanent Sovereignty, Africa, Middle East, Egypt, Nile, Water, Land Grab, Gulf Cooperation Council, GCC, Islamic Law, Islamic Finance, Waqf, Endowment, Trust, Islamic Trust, Shari'ah, Maqasid Al-Shari'ah, Nile River, Land Grabs, Sustainable Development, Agriculture, Investment
JEL Classification: A00, A12, K00, K33, K32, K30, K19, L66, L79, N40, N45, N47, N36,N5, N50, N51, N55, N56, N57, O00
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