The Ethics of Foreign Investment

Agricultural land in Africa: Middle Eastern states are major investors in agricultural land in developing countries, and the nature of this type of investment has raised ethical concerns. These investments pose particular threats to local communities, especially with regards to food and water security. What kind of responsibilities then do investors have given the potential impact of their investments abroad?

A Burundian cyclist who makes a living from transporting goods to Burundi’s capital Bujumbura for sale steers his heavily loaded bike downhill sometimes negotiating hairpin turns at speeds that can reach 80 km per hour on 11 May 2010 near Bujumbura.

Middle Eastern and Gulf States are major investors in agricultural land in developing countries. In 2009 the World Bank cited Saudi Arabia and the United Arab Emirates as ‘worldwide leaders in buying land in third-party countries’ with Bahrain, Egypt, Kuwait, Libya and Qatar also actively exercising their interests in acquiring foreign farmland on a large scale. China and South Korea are also significant investors, along with European biofuel companies and US investors. The countries targeted are largely in Africa, with the main focus being the low-income countries of Ethiopia which has 13 million hungry people, Madagascar, Sudan and Mozambique, but also Cameroon, DRC, Ghana, Kenya, Mali, Somalia, Tanzania and Zambia. Southeast Asia and South America are also seeing a rise in foreign-owned farmland.

The scale and nature of this type of investment has raised international concern. The UN Agriculture and Food Organization (FAO) estimates that the area of land acquired in Africa by foreign interests for food production in the past three years at 20 million hectares, with leases from 50 to 99 years regularly documented. The main reasons for the mass buying and leasing of agricultural land abroad is for export back home by food insecure states or for profit-making by private foreign investors, but also in anticipation of payment for carbon sequestration….

August 4, 2010