It seems an almost poetic irony that the Middle East, a region rich in one of the world’s most coveted commodities of today, is also grossly deficient in one of the world’s most coveted commodities of tomorrow. About two-thirds of the world’s known crude-oil reserves lie under the MENA (Middle East and North Africa), yet it is the most water-scarce region in the world, housing 12 of the 15 most water-scarce countries. The oil-rich GCC (Gulf Cooperation Council) nations, in particular, lack adequate freshwater availability. Countries like Bahrain, Qatar, Kuwait, UAE and Saudi Arabia yield annual per-capita freshwater resources of approximately 100 cubic meters; the internationally recognized minimal amount of water required per person per year is 1,000 cubic meters.

In the midst of this acute water shortage, maintaining a local agricultural sector in these GCC nations is not feasible. Around 85% of total freshwater usage in the GCC is for agriculture, the highest in the world. From 1980-1999, Saudi Arabia has exhausted two-thirds of its non-renewable freshwater in order to maintain an indigenous farming sector – and at what cost? The kingdom had to pay $500 a ton for domestically produced wheat, when the international market rates were around $120 a ton. Although de-salination has helped to enhance water availability, this option has proven to be too expensive for agricultural use. Even a method involving selective cultivation of crops, though more water-efficient, cannot satisfy overall consumer needs.

As a result, several GCC nations have chosen to import foodstuffs that they themselves cannot grow indigenously, and this has considerably reduced their consumption of limited freshwater resources. To these countries especially, water is not just an extremely precious resource but in fact a currency; a currency by which the GCC can reduce overall expenditure and increase productivity. This notion of using water as a currency was conceptualized by Tony Allen in the 1990’s and is termed ‘Virtual Water’ or ‘Hidden Water’. Hidden water refers to the amount of water that is used in the production of a good or a service. For instance, there are 1,300 liters of hidden water in 1 kg of wheat, while there are 3,400 liters of hidden water in 1 kg of rice and an astronomical 15,000 liters of hidden water in just 1 kg of beef.  Hence by importing agricultural products GCC nations are importing water, or rather hidden water, and thus reducing their domestic water debt.

Unfortunately, Gulf countries are already heavily dependent on food imports to the tune of $12 billion annually. According to the FAO (Food & Agricultural Organization), GCC countries are expected to reach an import dependency of 60% by 2010. Saudi Arabia is projected to be completely dependent on food imports by 2016. These shocking statistics coupled with the recent food crisis in 2008, have shaken GCC countries into the realization that food security has become a pertinent issue for the future.  With food prices soaring by more than 50% and riots erupting in over 60 countries, GCC nations became reluctant to rely solely on the free market for their food security. 

Consequently, oil-rich Arab nations are beginning to invest in land in other countries where agriculture and cultivation are a more conducive venture. Saudi Arabia has expressed its interest to invest in countries like Pakistan, Thailand, Sudan and even Turkey, with a decided budget of $5 billion. Qatar and Sudan have established a joint holding company with the specific intent of serving the Arab food markets. Abraaj Capital, a large private company in the UAE, has acquired 800,000 acres of farmland in Pakistan along with other business entities. In other words, GCC nations are looking for ‘hidden water’ in agricultural land abroad, and by doing so they have unearthed ‘blue gold’.

Yet, although agro-investments encourage a more efficient use of both land and water and will no doubt be beneficial to GCC nations in the long-run, these measures have also raised certain concerns within international monitoring agencies like the FAO: concerns about the local populations. Sudan for instance has an estimated 160 million acres of unused arable land, yet around 5-7% of their population is completely dependent on food aid and 24% of the population is undernourished. Aid agencies fear that agricultural exports in fertile yet impoverished countries like Sudan and Pakistan may lead to a further curtailment of food distribution among their local populations. 

Other concerns include the conditions of agricultural labor in these countries as well as environmental degradation. Quite often countries are unable to monitor the exploitation of human and environmental capital within their own borders; overseeing and ensuring ethical farming in other countries will likely prove much more challenging. Lastly, one of the more political concerns involves the diplomatic stance of importing countries towards their agro-exporting nations. Over the last few years Qatar and Saudi Arabia have become increasingly important in conflict mediation efforts in Sudan and Pakistan respectively. In light of these new developments there is a natural apprehension that growing interests in the resources of these war-torn regions can in some way affect the political decision-making process. 

The growing freshwater shortage has motivated affluent nations in the Middle East to find ‘hidden water’ in other countries. On a positive note, this new quest for ‘hidden water’ can ensure food security for millions and prevent future degradation of freshwater resources in countries that suffer from chronic water-shortage problems. Yet, one must be aware of potential hazards that lie ahead.