Achieving Food Security in Saudi Arabia with Sustainable Foreign Direct Investment - Research Paper Example

? Food Security in Saudi Arabia Food Security in Saudi Arabia Introduction Saudi Arabia is one of largest nations in the world with an area 870,000 sq mi. It is located in Western Asia, and it is the 2nd largest Arab nations following Algeria. The population of the nation is estimated to be 29 million and a majority of them are young people. The climate of the country is very hot dry in summer and mild cold in winter. The country is blessed to have the biggest oil reserve in on earth, offering its citizens high living standards to enjoy a comfortable living. Nevertheless, the water resources in the country are insignificant making it very hard to the government to be independent in agriculture particularly with the fast population increase. As Saudi Arabia was always relies on imported food, it is untrustworthy particularly with today’s politics between laws and countries. In addition, Saudi Arabia cannot spend in local agriculture because of water shortages. Therefore, Saudi Arabia sought to put their funds in foreign nations for agriculture. Problem to Address A lot of these investments in deprived nations are not sustainable because of extreme poverty, bad infrastructure and political unsteadiness in some nations particularly in Africa which can put Saudi’s agricultural investment at a high risk. Research question: How can Saudi Arabia accomplish food security by sustainable food direct investment (FDI) and do away with the risk of future food crisis? Methods/Approach: Study Measure:- This study is rooted in previous analysis and studies, which were carried out in the field of food security in Saudi Arabia through looking at significant academic resources on the topic of FDI, and some cases concerning agricultural investments in deprived nations, which specified on the matter of neo-colonialism and land grabbing. This article investigates agricultural investments overseas and its objective to make agricultural investments further sustainable. It can be used by agricultural bodies and investors to evaluate the risk of FDI in agriculture and also give solutions concerning sustainability to grant food security. This article is split into eight parts. First, it will talk about the global food crisis. Secondly, it will talk about the food security in Saudi Arabia. Thirdly, it will talk about the concept of FDI and its uses on agriculture. Fourthly, it will talk about the challenges of FDIs. Fifth, it will discuss Neocoloniasm and then the Negative aspects of FDI. Finally, it will give the recommendations as per the findings along with the conclusion. Global Food Security Over one billion individuals, almost a sixth of the globe’s populace, suffer from chronic (severe) hunger (Heady & Fan, 2010). It is a disaster with devastating and extensive effects. Lack of food weakens the immune system and also slows down a child’s development. 50% of all cases of children’s death are caused by hunger (Heady & Fan, 2010). Under nutrition, as well as chronic hunger, mainly arises from widespread poverty. Individuals who are poor cannot afford to buy food. Hungry households use more than half of their income to purchase the food they require to survive with. Food cannot travel from excess to shortage areas across and within a country due to barriers at the border, poor roads, as well as checkpoints along the way (Heady & Fan, 2010). Without adequate food, grownups struggle to work and children, on the other hand, endeavor to learn, making sustainable financial development tough to attain. The global society normally uses the phrase "food security" to explain not just the availability of food, but also the capability of purchasing food. Food security refers to having a dependable source of food and adequate resources to buy it. A family is regarded to be food-secured when its members do not live in fear of starvation or hunger. Guarantying worldwide food security will only become more complex in the future as the need for food is projected to go up by 50% over the next two decades (Heady & Fan, 2010). Increased demand will come mainly from both income and population growth in middle-income nations. Global food prices augmented considerably in 2007, as well as the 1st and the 2nd quarter of 2008, leading to an international crisis and causing an economical, political and social turmoil in both developed and deprived states (Headey, 2012). Even though, the media limelight focused on the riots, which developed in the face of elevated prices, the 2007-08 global food turmoil has been years in the making. Systemic grounds for the global increases in food prices are still the subject of debate up to now. After reaching a peak point in the second quarter of 2008, prices dropped considerably in the Late-2000s recession, but went up again during 2009-10, reaching another peak point in 2011, which was slightly higher when compared to the level the prices reached in 2008 (Headey, 2012). Nevertheless, a replicate of the 2008 food crisis is not anticipated owing to ample stockpiles. Let us look at some of the causes of food insecurity in order to understand how to deal with this matter. The direct cause of rising food insecurity has been a minute supply disruption (owing to shortages) along with sustained enhancements in demand. In addition, rising petroleum prices have raised the cost of both global transportation costs and agricultural production, which the World Bank approximates, has pushed up food prices by 15% (Heady & Fan, 2010). In the long run, extensive disinterest in food crop production in the emergent globe and an over-stress and dependence on trade in agricultural cash crops destabilized food security globally. The 2008 worldwide food crisis compromised the existence of 860 million malnourished individuals and threatened to push 100 million individuals into extreme deficiency, rubbing all of the gains made in eliminating poverty and scarcity in the last decade (Heady & Fan, 2010). High prices put food out of reach for the most deprived households in the developing world, a majority of whom spent over half their income on purchasing food. Rising food insecurity disheartened tenuous civil solidity in at least 33 nations, roughly one sixth of UN member states. Numerous nations opted for the westernized view of achieving food security (Demeke et al, 2009). Conventional reasoning in westernized nations was that capitalizing on farmers' profits was the best way of increasing agricultural production; the greater a farmer’s profit, the higher the effort and energy, which will be impending, and the higher the risk the farmer will be willing to take. Famers where offered the best tools in order to increase their output, and this was extremely efficient (Demeke et al, 2009). On May 2nd, 2008, United States leader, George W. Bush, said he was working with the Congress to consent an extra $770 million support for global food aid. On October 16th, 2008, former United States leader, Bill Clinton, rebuked the bipartisan alliance in the Congress, which killed the notion of making aid donations in form of cash instead of food (Headey, 2012). The discharge of Japan's cereal reserves onto the market brought the prices of cereals such as rice down considerably. As of May 16th, 2008, eagerness of the move had already dropped prices by 14% in one week. On April 30th, 2008, Thailand, on the other hand, announced the formation of the Organization of Rice Exporting Countries (OREC) with the likelihood to establish a price-fixing movement for rice (Headey, 2012). This was seen by many countries as an action to benefit from on the crisis. In June, 2008, a constant pledge from the G8 was called for by a number of humanitarian organizations, which eventually led to a drop in various significant commodities. State of Food Security in Saudi Arabia Over the past years, the agricultural status in Saudi Arabia has dramatically enhanced (Lipmann, 2010). Even though, Saudi Arabia is broadly considered as a desert (dry land), the region has places with a climate that supports agriculture. The regime of the nation, in particular, has supported the agricultural processes through transforming vast chunks of land into agricultural fields. Through executing key irrigation projects, as well as accepting extensive mechanization, Saudi Arabia has developed agriculturally, which has added barren chunks of land to the stock of cultivated terrain (Lipmann, 2010). In the present day, agriculture in Saudi Arabia is centered on the export of dates, wheat, dairy products, fish, eggs, poultry, vegetables, fruits, flowers and vegetables to markets all round the world. Saudi’s regime is significantly concerned in the food industry, and its ministry of agriculture is mainly responsible for the (agricultural) food policies of the country. The private sector has a significant role in the country, as well, because the regime grants lasting interest loans, less expensive fuel, water and electricity, along with duty-free imports of machinery and raw materials (Lipmann, 2010). During the 70’s and the 80’s, Saudi’s government undertook a great restructuring of its agriculture. The articulated goals were food security by improving rural incomes and self-sufficiency. Even though, Saudi Arabia has been successful in improving domestic output of numerous foodstuffs and crops through the establishment of modern agricultural methods, the nation’s agricultural program has not fully met its projected objectives. In relation to self-sufficiency, the nation’s food production was limited (Lipmann, 2010). Nevertheless, if the whole production procedure was mulled over, then the import of equipment, fertilizers and labor have made the nation even more reliant on foreign inputs in order to bring food to the average Saudi Arabia household. Two models of income distribution developed: traditional agricultural areas did not benefit from the development scheme and the regime’s financial support brought about the creation of large-scale production units (Lipmann, 2010). A number of these were run and operated by foreign bodies and owned by rich people, as well as large organizations. From an environmental perspective, the scheme had a very low pleasing effect. Not only did it lead to brain drain on the nation’s water resources, but it has also caused the use of vast volumes of chemical fertilizers in order to improve output (Lipmann, 2010). In 1992, the nation’s agricultural technique was only sustainable given that the regime kept a high level of indirect, as well as direct subsidies, a drain on its external accounts and budget. In 1984, the contribution of Saudi’s agriculture GDP was 3.3% (Lipmann, 2010). However, in 2001, agriculture contributed 5.1% of Saudi Arabia’s GDP. In the past, agricultural production was centered on very few limited areas. Food production was mainly sustained by traditional communities even though some surplus was taken to city markets. Traditional nomads had a vital role in this regard. They shipped foodstuffs and other products between the broadly isolated agricultural regions. Livestock keeping was shared among the nomads and sedentary communities. The waters supply in the nation has always been inefficient. This has been the vital restraint with regards to agriculture as it is the main deciding factor on where agriculture takes place. The nation has no rivers or lakes. Rainfall is minute and also irregular in a majority of the parts of the nation. Only in the southwest (mountains of Asir), near the Yemen border was rainfall adequate to support normal crops. This area, along with the Tihamah coastal plains, supported subsistence farming. Farming in the rest of the nation was dispersed and reliant on irrigation (Mahdi, 2006). Along the western coast of the nation, groundwater from springs and wells granted adequate water for self-sufficient farms and commercial production. In the central and northern parts of the nation, An Nafud and Najd, groundwater permitted small farming. The eastern part, on the other hand, supported an extremely expensive farming economy. The main oasis situated at Al Qatif, which enjoyed huge volumes of waters, good soil and also natural springs, supported agriculture very well. Historically, the minute arable land forced those keeping livestock into a nomadic scheme to take advantage of what feed was available. Only in the summer did the nomads keep their animals around a well for forage and water. The Bedouin formed special skills recognizing where rain had fallen plus forage was accessible to feed their animals, as well as where they could find water on the way to numerous forage areas (Mahdi, 2006). Until the late 70’s, sedentary agriculture had witnessed extremely few changes and declined after the increase of foreign imports, lack of investment and urban drift. The use of contemporary inputs remained fairly low (Mahdi, 2006). Establishment of mechanical pumping in various areas led to a diffident level of commercial production in areas near urban centers. However, regional allotment of agricultural actions remained fairly unchanged, as did the average holding patterns and size of cultivation. During the late 70’s and 80’s, Saudi’s regime assumed a complex scheme to modernize, as well as commercialize agriculture, so as to enhance the county’s agricultural industry (Mahdi, 2006). Indirect assistance involved considerable expenses on infrastructure, which included electricity supply, drainage, irrigation and secondary roads among others. Nevertheless, Saudi Arabia has not yet attained the food security which is deserved. Therefore, stern measures need to be considered so as the nation could achieve the food security it cherishes a lot. Concept of Foreign Direct Investment and It Applies For Agricultural The amount of investment in agricultural activities is optimistically linked to food security, as well as poverty reduction. Unfortunately, agricultural investment in developing nations dropped harshly over the last few years. Significant increases are required to do away with hunger and poverty, form decent careers and living opportunities and guarantee environmental sustainability. As the prime on-farm investors, farmers should be central to agricultural investment techniques. Their investments should be supported and complemented by donor and governmental investments in public goods. Investments through private organizations along the whole value chain play a vital role, as well. Nevertheless, the advantages of agricultural investments will not come up automatically and some types of investment bring risks for the environment, as well as the local communities. Food organizations such as FAO promote liable investment in agriculture by supporting a range of consultation processes and through empirical research. In the years following World War 2 global foreign direct investment was dominated by the US as many nations recovered from the damage brought by the warfare. The United States accounted for roughly three-quarters of new foreign direct investment (including reinvested profits) from 1945 to 1960. Since that time, foreign direct investment has grown to become a truly global occurrence. FDI has developed in significance in the global financial system with foreign direct investment stocks now making up over 20% of global GDP. Foreign direct investments (FDIs) are investments wherein an organization procures a majority or controlling interest in an international land (Markusen, 2000). International investments, not concerning a majority or controlling stake, are normally referred to as portfolio investments. Organizations making FDIs are considered as multinational enterprises. Land and water are becoming rare resources globally. Due to increasing food prices, population growth and bioenergy regulations, demand for prime land and its matching water resources has also increased radically (Markusen, 2000). In the past decades, the trend of international actors safeguarding terrain for food, bioenergy crop farming and other agriculture-linked production has gone up significantly, both in terms of scale and number of the investments (Markusen, 2000). Water plays a vital role in these land transactions because acquiring access to water resources is one of the key objectives of foreign investors, and many of the investment plans occur in regions, which have formerly been farmed at both low-intensity and small-scale level. This occurrence, frequently known as “land-grabbing”, has acquired significant attention over the past years. A lot of people see key opportunities for low-income nations to create foreign capital inflow and directly needed investments in agriculture, whereas others bring up concerns as to food security as abundant agricultural terrain is dedicated to producing export products rather than staple food for the local population (Markusen, 2000). Nevertheless, the issue of water has, up to now, been given limited concern. Water administration is, to a great extent, an institutional issue. Institutions refer to the humanly created constraints, which structure human dealings, and water rights as one kind of institution regulates issues concerning the access, use, exclusion, withdrawal and alienation, and are based in numerous legal orders. In addition, water can be categorized into “green” and “blue” water, blue water articulating liquid water (surface water and groundwater), and green water (soil water), which is transpired and absorbed by plants (Markusen, 2000). As obtaining water rights has a significant role for a lot of investors, investment plans are most likely to persuade the institutional array for water management present in the region because the distribution of existing water resources should be re-negotiated between former and “fresh” resource users. Cooperation of water rights can become an issue of significant importance particularly in low-income nations where a huge percentage of its citizens rely on agriculture (Markusen, 2000). The effect of agricultural FDI on the local water situation has not, up to now, been offered sufficient attention, even though some attempts have been made. Critics, for instance, dispute that achieving water rights is a deliberation for agricultural investments, which can bring about a shift of water rights from local to international actors (Markusen, 2000). Numerous organizations have also mentioned possible effects of investments on local water rights in thought notes or first drafts of codes of conducts for agricultural FDI. Nevertheless, these first endeavors have not given examples of how agricultural FDI affects the local water system in low-income nations where most of the population relies on agriculture. Neither have they recognized the outcomes, characteristics and controlling factors of the potential institutional change, which happens due to investors getting into the market of a given case study (Markusen, 2000). Challenges of FDI Agricultural Investments in Africa There are numerous political and economic factors, which can either improve or detract from foreign investment chances in the food and agriculture sector (AlGhafli, 2013). Factors, which have an encouraging influence on investment comprise of the size of the host nation market, per capital GDP and GDP growth, cultural similarities between the host and home nation, natural resource accessibility, an encouraging exchange rate, as well as the labor output of the sector. But all these impacts and opportunities of foreign direct investments cannot come up devoid of any challenge, particularly in the agricultural sector (AlGhafli, 2013). The agricultural sector in most growing nations was typified by lack of proper infrastructure, which slows down the growth and development of foreign direct investments. Furthermore, being unable to offer essential land on time is greatly attributed to poor performance of foreign direct investments in the agricultural sector (AlGhafli, 2013). The other significant thing is the decrease in the price of agricultural goods in the global market since, in the past, numerous investors searched for non agricultural endeavor in the host nations. However, recently this matter is changing, and a lot of FDI investors are linking themselves in the sector with pleasure (AlGhafli, 2013). Also, in spite of the superior flow of FDI, the amount of executed projects has revealed a noticeable drop from 281 to 136 from 2008 to 2010 mainly because of the global economic crisis and the exceeding inflation and the equivalent shortage of hard money in numerous developing nations (AlGhafli, 2013). Financial constraints, poor infrastructure, absence of harmonization between regional and federal governments and on time provision of agricultural terrain land can be stated as the key factors for poor performance of foreign direct investments in the agricultural sector in African nations. The agricultural sector and distribution of FDI relies on the demand for global markets. The higher demand for agricultural products attracted more foreign direct investments to engage in this sub sector. Likewise, the other sub sector such as mixed farming system, which concerns both animal fattening and crop production, demand was also significantly increased in the global market. The leader of Saudi Arabia, in 2009, supported Saudi organizations to invest in international nations and regions. The king supported the organizations to invest $800 million international agriculture (AlGhafli, 2013). They leased and bought thousands of acres in nations, which had potential for agriculture, but lacked the vital skills needed for farming. Hence, Saudi Arabia was intending to offer food security for their citizens with sustainable food supply, as well as stable prices. The agricultural projects, which was aided by Saudi Arabia, was using the nation’s capital money to aid agricultural infrastructure in deprived nations through providing them equipment like tractors and irrigation pipes and training for vocations and storehouses set with cooling system and develop transportation and shipping lines in order to facilitate transporting them to Saudi Arabia. The international agricultural project led to a lot of rage to Saudi Arabia in nations such as Kenya and Ethiopia since they were regarded as neo-colonists through land grabbing in deprived nations for agricultural (AlGhafli, 2013). In addition, many African countries, which Saudi Arabia supported agriculturally, experienced starvation. The numerous challenges of FDI are comprehended where the host nation has some sort of national secret – an issue, which is not meant to be revealed to the entire world (Loewenberg, 2011). It has been witnessed that the security of a nation has faced risks due to foreign direct investments. Sometimes it has been witnessed that certain foreign principles are adopted, which are not acknowledged by the employees of the recipient nation. Foreign direct investment (FDI), at times, is also damaging for the nations that are making the investment themselves. Foreign direct investment might involve high communication and travel expenses. The variations of culture and language, which exist between the nation of the financier and the host nation, could also create harsh problems with regards to foreign direct investment (Loewenberg, 2011). Also, another key challenge of foreign direct investment is that there is an opportunity that an organization might lose out on its tenure to an overseas organization. This has frequently made many firms to approach foreign direct investment with some amount of caution and vigilance. The market size and condition of the host nation could be vital factors with regards to FDI (Loewenberg, 2011). In case the host nation is not well related with their neighbors, it created numerous challenges to the investors. Neo-colonialism In 2009, extensive acquisitions of farmland in Africa, Central Asia, Southeast Asia and Latin America made news in a spell of media reports all around the world. Lands that only a few years ago had little interest are now being wanted by global business entities to the tune of hundreds of thousands of acres. Also, while a failed endeavor to lease 1.3 million hectors in Madagascar attracted a lot of media attention, dealings reported in the global press constituted the main juice. This is truly a hot issue since land is so central to individuality, food security and livelihoods. Land Grabbing It is an ancient tradition in numerous African nations to frown from selling their land, especially to foreign investors. When land is bought by large agribusiness interests in these nations, it is experienced as a vicious breach of this custom, one that endangers the livelihoods and lives of entire generations to come. This occurrence of extensive land misuse, in reality, took off with the global food crisis of 2007-08. As the numerous cases of land grabbing recognized in Central and West Africa have shown, profit appears to be the only drive pursued. The entire model is unfavorable to the objectives of food sovereignty, which is essentially concerning human survival, particularly in African nations that are still mainly rural. Whereas water, seeds, energy and financing, are all vital to agriculture, there is one clear requirement, which comes prior to all of them: people cannot cultivate food without land. However, land grabbing by foreign regimes (Kuwait, Saudi Arabia, China and others) or by rich persons, be they nationals or foreigners, deprives small-scale farmers of that essential factor in the food equation. In reality, it converts them into farm workers over their own land. Land grabbing presently ongoing in Africa is not limited to Western countries, which colonized African nations during the 19th century, but instead numerous nations in Asia, Middle East and Latin America, for instance Brazil, Saudi Arabia, china and UAE, have all joined the race to purchase and lease huge chunks of land in the African continent. Nevertheless, a majority of these nations had undergone oppression in the colonial era (Hallam, 2009). Therefore, foreign investors searched and secured between 37 million and 49 million hectors of productive farmland in the rising nations only from 2006 to 2009. Reports from the media also give examples of government support for privately managed deals. King Abdullah Initiative for the county’s agricultural development aids agricultural investments by Saudi organizations in nations with high agricultural potential (African nations), with an aim of promoting international and national food security. Strategic food crops comprise of rice, barley, wheat, corn, green fodders and sugar, in addition to fish and animal resources. A Saudi Arabian firm, Hadco, allegedly obtained over 25,000 ha of farmland in Sudan, with over 60% of the project’s expense being granted by the legislative Saudi Industrial Development Fund (SIDF) (Hallam, 2009). Likewise, the Abu Dhabi Fund (ADF) for growth and development financed the development of over 28,000 ha of cropland in Sudan in order to grow alfalfa to be utilized as animal feed and also maize, potatoes and beans for export purposes to the United Arab Emirates (UAE). Case Study: Hairong Africa is basically considered as a continent with extensive uncultivated or unexploited farmland and unspeakably low levels of food output (Hairong & Sautman, 2010). Following the sharp rise in food prices and oil in 2007 and 2008, very few nations with scarce farmland looked to African for land acquirement in what has come to be considered as 'land grabbing.' These nations, comprising of South Korea, Saudi Arabia and some Gulf States, have rented land in Ethiopia and Sudan in an effort to produce staple crops or biofuels, which will be shipped back to their respective nations. Nevertheless, their regulations have experienced backlash and have been condemned on environmental, economic, and social grounds (Hairong & Sautman, 2010). Long-standing land rents are also controversial since they are considered as neo-colonial. In some cases, land on the African continent, which is thought to be vacant might be owned by minor rural farmers. Chinese farmers have purchased land in a number of African nations because of the long history of Chinese presence in Africa, from 1960 (Sumanjeet, 2009). Today, China has also been associated with long-term land leasing in the continent, and even thought these sources are not always confirmed, it is worth assessing. Currently, China's farmlands have become rare, whereas the country’s consumption of agricultural goods has witnessed a stunning growth. Since the 2000’s, China has been a key importer of agricultural products and it has been proposed that China might have to invest in foreign nations – Africa in particular – in order to feed its population (Hairong & Sautman, 2010). However, African regimes have encouraged the rising interests of Chinese firms and have aided the sharing of skills and knowledge between local farmers and Chinese (Hairong & Sautman, 2010). Negative Aspects of FDI Agricultural In Africa, almost 90% of rural terrain is under customary tenure. This means that 90% of the land is formally held as government terrain, but used by societies for the sake of reducing wrangles often for generations. Among the most depressing effects of foreign direct investments projects in agriculture is the thrashing of croplands currently utilized by local citizens for actions such as cattle crossing, dry farming and pasture (Barraclough & Ghimire, 2000). This culminates in a weakening of livelihoods because of the production on marginal lands, as well as a much tougher access to water for farming. Numerous projects bring about deforestation, which involves a loss of both natural and manmade resources for daily life and sources of revenue for instance charcoal and firewood. In other cases, for instance the Mali Markala Sugar Project, thousands of farmers are dislodged, lose their land and customary income-generating endeavors are no longer doable (Barraclough & Ghimire, 2000). According to some case studies, it is not yet possible to say if the new jobs will provide the same or better livelihood than the subsistence mode of operation lifestyle did. In a number of case studies, it was seen that projects are labor intensive during the first phase, but turn into mechanized intensives later on, thus dropping future income opportunities (Barraclough & Ghimire, 2000). In Mali, 100,000 ha of land were availed to the Malibya Agriculture firm devoid of any kind of consultation or involvement of local citizens in the decision process (Wiggins, 2010). Hence, no form of social and environmental impacts assessment was conducted. Also, compensation for affected farmers did not meet lawful obligations because the firm did not make any worthy provision to recompense farmers who would be harmed or displaced by their plan (Barraclough & Ghimire, 2000). This brought about wrangles with cattle breeders since their customary grazing routes and areas were not put to question. In Madagascar also, the Daewoo Logistics study revealed the significance of the proper records on land use rights and the acknowledgment of the community environment for instance the theory of Tanindrazana where land belongs to ancestors of the region and cannot be sold to anybody else, even to foreigners. Furthermore, the study on Ghana discovered that the area of fertile land remaining was dropping fast, and land matters were undervalued (Barraclough & Ghimire, 2000). Likewise, in Senegal, farming land, as well as water resources, were lessening and more land acquisitions were being carried out by foreigners who did not meet the requirements of local farmers. This reveals that the use of legal frameworks to acquire land was not put into full effect. Recommendations As discussed above, foreign direct investment (FDI) in the agricultural field can potentially deliver advantages to the host nation (Beintema, Avila & Pardey, 2001). However, whether these advantages will become visible or not will rely to a huge extent on measures and policies executed by the host nation itself. Rooted in the findings of the above case studies, the following suggestions can be made to the Saudi Arabian governments wanting to invest internationally. First of all, Saudi Arabia’s government should confirm that the present regulations, policies and institutions are tolerable so as to maximize the optimistic impacts of global investment while reducing the risks (Beintema, Avila & Pardey, 2001). Regulations should favor nationwide interests such as food security, export earnings, natural resources and employment along with those of the local community where the project will be situated, while granting attractive circumstances to international investors (Beintema, Avila & Pardey, 2001). For instance, the fiscal policy must decide the suitable tax rate, which attracts investors devoid of foregoing excessive tax revenue. Second, Saudi’s regime should commence preliminary studies to evaluate the economic, social, technical, as well as environmental probability of the project prior to its implementation. The potential risks on both the environment and the local community should be cautiously assessed, as well as possible impacts on food security. The diverse users, along with right holders of the land, must be recognized, including customary use and rights (Beintema, Avila & Pardey, 2001). The local community must be consulted prior to the government’s signing of the contract with the foreign investor. The entire process must be carried out in a clear way. The consultations must be recorded and kept for future reference. Conclusion In conclusion, this paper has talked about global food security with the spotlight on Saudi Arabia. The global food shortage, as we saw, hit the world most in during 2007 and 2008, and many factors such as FDIs were the vital issues that led to this crisis. Therefore, the affiliation between host-nation governments, as well as multinationals, needs thorough revision. Countries such as Saudi Arabia need to put all their matters on the table when they want to form foreign relations with other African countries in order to trade fairly (Loewenberg, 2011). Feeble results on taxes as vital factors of FDI might reflect the fact that, whereas multinationals do not like taxes, they still treasure strong educational, physical and institutional infrastructure, which taxes bring. A few works have talked about the supposed "New Financial Geography" with the concept of the multinational. It is vivid that results from the literature on the unsteadiness of varying equilibria in the occurrence of reasonable trade costs stop working when multinational organizations are incorporated: horizontal multinationals come about specifically when nations are similar and trade costs are modest to high, and equilibria, on the other hand, in the multinationals are stable. However, much still more remains to be carried out concerning this matter. References AlGhafli, A. (2013). Telephone interview, Janaury 07. Barraclough, S. L., & Ghimire, K. B. (2000). Agricultural expansion and tropical deforestation: poverty, international trade and land use. New York: Earthscan/James & James. Beintema, N. M., Avila, A. F. D., & Pardey, P. G. (2001). Agricultural R & D in Brazil: Policy, investments, and institutional profile. Washington, DC: International Food Policy Research Institute. Demeke, M et al. (2009). 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