Learning Lessons and Avoiding Potential Future Wars Through Sustainable Food Development via B2B Mechanism of International IFPA
This short article glances into current and future challenges in the food security sectors across the OIC markets with a combined population of 1.8 billion, which is more than one fifth of the world population, and makes a strong case for a robust, resilient, sustainable and innovative private sector engagement in the agri-food business through a platform that unifies all the existing frameworks, markets, projects, ecosystem players, clusters and hubs, nodes and corridors for significant enhancement of intra-OIC trade under the patronage of OIC multilateral institutions of Islamic Organization for Food Security (IOFS), Islamic Development Bank (IsDB), Islamic Chamber of Commerce, Industry and Agriculture (ICCIA) and Islamic Centre for Development of Trade (ICDT) together with the strategic cooperation of other major OIC institutions and organs of SMIIC, ISF, CIBAFI, SESRIC, ISESCO, COMCEC and COMSTECH.
According to the 2020 Global Report on Food Crises (GRFC), which is annually produced by 16 global and multi-lateral partner organizations, 135 million acutely food-insecure people are in critical crisis and 17 million are acutely malnourished children under 5 years across 55 countries with around 50 percent of the 10 worse countries being from the OIC. Approximately 79 million people remain displaced globally with 44 million internally displaced and 20 million as refugees under UNHCR’s mandate, while half of these refugees were hosted in some of the OIC countries with high numbers of acutely food-insecure people.
According to GRFC, the key drivers of food insecurity are the combined effects of high food prices, disrupted agriculture and trade, lack of access to dietary energy and diversity, safe and clean water, sanitation and healthcare, currency depreciations, economic shocks and macroeconomic crisis, unemployment and under-employment, socio-political instability, conflict/insecurity, COVID-19, crop pests including fall armyworm and desert locusts, climate changes and weather extremes. Therefore, the current global recession with the ongoing impact of COVID-19 will continue to majorly disrupt food supply chains in the OIC countries as it will severely impact on health and nutrition as well as food availability and access. In fact, it could create conditions for social and political unrest especially in the most vulnerable food-crises countries which are in and around the OIC countries.
GRFC advocates for anticipatory actions to be undertaken to safeguard the agri-food systems and critical food supply chains with the following specific recommendations: expanding near-real time, remote food security monitoring systems; preserving critical humanitarian food, livelihood and nutrition assistance to vulnerable groups; positioning food in food-crises countries to reinforce and scale up social protection systems; scaling up support for food processing, transport and local food markets and advocating for trade corridors to remain open.
Keeping the above in mind, developing competitive agro-industries is crucial for generating employment and income opportunities in the majority of IOFS Member States, considering the fact that more than 52 percent of the OIC and indeed IOFS populations live in rural areas and depend on agriculture. Potentially, agro-industrialization presents valuable opportunities and benefits for OIC countries in terms of overall processes of industrialization and economic development, export performance, water resource management, food safety and quality. However, the full potential of agro-industries as an engine for economic development has not yet been realized in many OIC countries. This potential could be used advantageously to achieve multiple goals such as increased income for farmers, rural industrialization, rural employment, better quality products to consumers, and indeed eradicating post-harvest losses. The latter problem has continued to pose a serious challenge to the socio-economic development in IOFS Member States. To address these issues, the Forum on Development of Agro-Food Industries in OIC Member States was organized in Kampala, Uganda on Oct.11-12 2011. The Forum recommended, among other issues, the establishment of an Agro-Industrial Association that would promote agribusiness and a value-chain approach to agricultural development in OIC countries.
A strategic agreement was signed with the IsDB Group, such as ICD, ITFC and ICIEC, which included the development of International IFPA arranging Islamic financing, Sukuk investment and Takaful insurance for suitable agri-projects. The IsDB plays an important role in the institutionalization of IOFS, providing essential support to its various activities and initiatives. Additionally, IOFS and ICCIA signed a Joint Action Plan for Sustainable Food Security in order to expand the food industry by developing a single value-added food market in the IOFS/OIC countries by creating favorable conditions for expanding mutual intra-OIC trade, attracting Islamic finance/investment and increasing exports and imports.
Pursuant to the Resolution of the forthcoming IOFS 3rd General Assembly on Dec.2-3 2020 in Ankara, Republic of Turkey, the International IFPA will be duly established as the only private sector engaging legal entity under IOFS for all business-to-business engagements across the entire OIC agri-food markets. International IFPA will directly facilitate all intra-OIC agri-food trade between Member States across the entire food value-chain.
IOFS has commissioned an international consulting firm with expertise in OIC and global agri-food supply chains, Dinar Standard, to prepare a feasibility study for the operations of International IFPA. The purpose is to prepare a robust strategy for International IFPA that will engage and facilitate private sector led trade development and food security across the OIC markets. The strategic goals of International IFPA are to:
-enable significant growth of food exports of companies for Member States. This will address OIC/IOFS food security of reducing import dependency and increasing exports
-enable building champion companies and businesses from OIC across key essential food sub-sectors and across value chains from agriculture to food processing to retail
-identify current OIC success benchmarks and disseminate across other OIC markets
-promote quantifiable reduction in food wastage and post-harvest losses and enhance sustainable agri-food growth
-promote advocacy and business linkages in the field of food production, processing and distribution across the whole value chain and relevant agri-food support institutions such as banks, vocational and research institutions, standardization agencies, farmers’ associations, food unions and other relevant umbrella bodies for agri-food
-identify potential partnerships and investment opportunities in the field of food processing based on efficient mechanisms within OIC and IOFS Member States and utilizing IsDB Group’s Islamic financing, Sukuk investment and Takaful insurance products
-establish and enable key OIC food value chain hubs and nodes
-promote increased use of latest agri-tech and fin-tech solutions
-position key OIC/IOFS Member States as gateways to other OIC and non-OIC markets such as Europe, China and Russia
-enable technology platform(s) for OIC food trade and development based on blockchain and other innovative technologies which will allow importers, exporters and other entities within the supply chain across the OIC agri-food markets to directly liaise with each other with the ability to track and trace all the necessary data in real time
The strategic approach of International IFPA to achieve the above goals will be to put into action the analysis of:
-top OIC domiciled industry players across the agri-food value-chain
-relevant ecosystem players (regulatory, logistics, technology, finance, research)
-top global related players across the value-chain for competitive benchmarking
-comprehensive framework with key gaps and challenges in enabling OIC agri-food industry’s role in driving food security
-strategic opportunity areas to be addressed by International IFPA
-strong rationale-based strategic plan for International IFPA covering market analysis, services proposition, sustainable revenue model, operating and governance structure, strategic partnerships, memberships, marketing, and investment plan
The International IFPA will utilize all international financial centres in the OIC markets such as AIFC, DIFC, ADGM, QFC, Labuan IBFC, Casablanca Finance City and the forthcoming Istanbul International Financial Centre as well as all free trade agreements (FTA) which have relevance for the OIC and IOFS Member States such as the following examples:
-Trade Preferential System (TPS-OIC)
-Greater Arab Free Trade Agreement (GAFTA)
-D-8 Organization for Economic Cooperation
-Economic Cooperation Organization Trade Agreement
-FTA League of Arab States
-Regional Group Customs Union of Eurasian Economic Union
-Regional Group FTA of CIS
International IFPA will translate the G2G vision and mission of IOFS through its unique B2B platform for all necessary strategic objectives to enable a resilient and sustainable private sector engaging intra-OIC trade with a wholesome approach “from gene to fork” that meets all the standards of Halal food safety and security with national and transnational food sector development and sustainable food reserves. International IFPA will bring together all food associations, unions, chambers, and other relevant umbrella bodies for direct engagement between all ecosystem players in the OIC/IOFS Member States which are geo-strategically positioned in all the major eastern trade corridors and have the potential to engage the current Chinese Belt and Road Initiative including the China-Pakistan Economic Corridor, Strait of Malacca, Strait of Hormuz, Turkish Straits, Strait of Bab al-Mandab, Suez Canal and Strait of Gibraltar, which have been especially highlighted in light of the recent Chatham House Report on Chokepoints and Vulnerabilities in Global Food Trade.
International IFPA will announce its official launch after the 3rd General Assembly of IOFS in December 2020 and inaugurate its flagship headquarters in the legal jurisdiction of the Astana International Financial Centre in Nur-Sultan, Republic of Kazakhstan as Kazakhstan is also the hosting country for IOFS whose Secretariat is led by the Director General Yerlan Baidaulet. International IFPA also aims to open other offices in geo-strategic locations in key OIC/IOFS markets and work very closely with all OIC institutions and organs such as IOFS, IsDB, ICCIA, ICDT, SMIIC, ISF, CIBAFI, SESRIC, ISESCO, COMCEC and COMSTECH.
The author is Sheikh Bilal Khan, the Head of the IOFS Project Office for International IFPA. He is a British-born expert of Pakistani origin who is an adviser to several heads of states and multilateral bodies. He is known for establishing and managing major cross-border projects and is highly respected specialist in financial and legal services, Islamic finance, fintech, agri-business and intra-OIC trade with executive board experience as Chairman, CEO, Independent Non-Executive Director, Secretary General, Director General, Board Member, Special Government Adviser and Business Ambassador as well as an English qualified lawyer and Partner at international law firm McCarthy Denning, approved adjudicating arbitrator and judge, Islamic Shariah Scholar, honorary and visiting faculty at British and international universities, multiple award-winner and public speaker. The author can be reached at SBK-IFPA@iofs.org.kz and www.linkedin.com/in/bilalkhan786.