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Dubai/Lahore: One of the Middle East's largest private equity companies has been quietly buying farmland in Pakistan as part of plans by the UAE to increase food security and to dampen inflation. Dubai-based Abraaj Capital says it is working with the UAE government on the strategic agribusiness investments in Pakistan.
The government in Abu Dhabi has been holding talks with Islamabad about a framework for investment in its agricultural sector as it seeks to secure cheaper long-term supplies of basic foodstuffs such as wheat and rice.
The UAE, which imports 85 per cent of its food needs, has already said it is to consider building a strategic reserve of staple food items, part of a broader strategy to tame inflation of more than 10 per cent, with sharp rises felt in food prices across the entire UAE population.
A senior Pakistani official said the government had agreed in principle to allow the sale of rural farmland to investors from the UAE, setting aside Pakistan's own domestic concerns about increasing food prices and shortages of important commodities.
"Our aim is not to do away with precious farmland but in fact to raise the productivity of our farms and turn barren land in to fertile farmland," said a senior government official familiar with negotiations between Pakistani and UAE officials.
Abraaj Capital, which manages $5 billion of assets across the Middle East, North Africa and the Indian subcontinent, has been purchasing land in Pakistan during the past year, a company official said.
- Financial Times
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