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Ukrainian agro-cooperation prospects with MENA-countries

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The Ukrainian agro-industrial complex (AIC) has been traditional subject of both interest and scare for foreign investors. Despite high-yielding black earth lands, sufficient water resources, agricultural traditions and cheap yet qualified labour force, foreign companies are scared off by corruption and unfavourable business climate.

In addition, ownership of Ukrainian agricultural lands still may not be acquired – the government has not yet adopted the land sale moratorium. However, this does not prevent investors from working under long-term lease schemes, accumulating vast land banks and promptly earning money due to export of agricultural products.
There are at least 15 companies in Ukraine having farmland bank that exceeds 100,000 hectares. These are large latifundia that actively develop both plant production and storage and processing of animal products. As a rule, these are companies where Ukrainian stock prevails. However, even today large western companies, as well as Arabic companies operate both as traders and manufacturers in Ukraine. Such companies have adapted to the Ukrainian reality.
Firstly, it is important to mention NCH company with its headquarters in NY, as well as its regional offices in other countries within the region, in particular, Russia, Latvia and Romania. According to expert assessments this company cultivates 400,000 hectares of Ukrainian land. The Ukrainian Agrarian Investments Company founded by Russian Renaissance Partners Company has land bank of no less significance. This company has approximately 240,000 hectares of land under lease.

Swedish companies are also active market participants. Thus, Alpcot Agro controls 93,000 hectares of Ukrainian land concentrated mostly in the country’s West. In 2012 this Swedish company has focused on maize and wheat production and has harvested thousands of tons of grain and oil crops in 2012. In addition, there are also other Scandinavian participants on the market. Thus, Trigon Agri, with its headquarters in Copenhagen, operating also in Russia and Estonia, controls approximately 55,000 hectares of Ukrainian land, and the world known Swiss Glencore Company grows agricultural products on over 80,000 hectares of land.

French businesses are also among active market participants and one of them is AgroGeneration Company that has control over approximately 52,000 hectares of land. Recently it has decided to merge with the American SigmaBleyzer Company that also invests in the Ukrainian agro-industrial complex. As a result, Ukrainian market will meet a company cultivating approximately 120,000 hectares of the country’s land.

There is also a number of small agricultural enterprises with foreign stock that cultivate few thousands hectares of land. Thus, foreign companies control approximately more than 1 million hectares of high-grade lands while Ukraine has 40 millions of cropland in total. In addition, latifundia being considered large by Ukrainian standards and having land banks exceeding 50,000 hectares of land, controls about 5.5 million hectares of land. The rest of lessees are represented by small companies with performance decreasing every year, which are forced to sell their businesses to larger market players.

It is AIC market consolidation that is the main Ukrainian trend within the last 3-4 years. In 2012, 7 companies have increased their land bank by more than 20,000 hectares by way of purchasing smaller and weaker businesses. The leader is Kernel Company, which specializes in oil crops and has increased its land bank by 120,000 hectares in 2012.

Meanwhile, Eastern companies are only examining the Ukrainian market, first market entry attempts being made by Arabic companies. Their potential interest may be cultivation of more than 1 million of Ukrainian land. However, nowadays they only try to adapt to Ukrainian reality and follow the way of Western corporations.
Interest of Arab companies is easy to understand as Ukraine is one of the serious trade partners for Arab countries supplying grain crops to them. According to the 2011/2012 marketing year results Arab countries are apparent leaders in grain import in total share of Ukrainian export. Thus, their share in export of Ukrainian barley is 87% with fair share of 69% belonging to Saudi Arabia. Ukraine also exports 44% of wheat in these countries, and Egypt is its largest importing country with a 22% share. There is also 41% of maize export falling on Arab countries. The largest export share also falls on Egypt and comprises 26%.

Naturally, under such import performance entry of foreign companies to the production market is only a matter of time as Ukraine fits excellently the national foreign investment strategies to ensure food security.
However, Arab investors are now only beginning their entering the market. Thus, businessmen from UAE expressed their interest in entering the Ukrainian market already during Yushchenko’s presidency; however, these were just talks. At the same time, investors from Saudi Arabia are more decisive. This year consortium of Arab investors including such largest companies as Almarai and Al Rajhi, purchased Continental Farmers Group Company having small land bank in Ukraine and Poland (23.7 thousand hectares and 2.5 thousand hectares of farmland, respectively). It should be noted that, having production capacities in Agypt, Jordan and UAE, Almarai with its specializing in dairy, baking, juice and other types of production markets 65% of its products in Saudi Arabia. In its turn, Al Rajhi has been operating in Ukraine since 2006 through International Investment Co LLC., and is engaged in grain trade.

Ukrainian experience of these companies may become a litmus paper for activation of Arab investors on the market. Such investments have quite many potential stakeholders. Among Saudi Arabic companies one may mention Foras International Investment Co. This company has experience of work in Tatarstan (Russia) and Bosnia and Herzegovina and meanwhile develops AIC direction in African countries such as Mali, Senegal and Sudan. Among UAE companies we may mention Al dahra Agricultural Company as potential investor. This company has subdivisions in Egypt and Pakistan. In addition, governmental Abu Dhabi Fund for Development (ADFD) also is potentially interested in investments in Ukraine. This company has agricultural assets in Morocco, Mauritania, Senegal and Egypt. Among other Qatari companies with potential interest in entering the Ukrainian market we may mention national structure, the Hassad Food Company. This company is an active participant of land and AIC company sale and purchase markets in Pakistan, India, Australia, Turkey, Brazil, Nigeria, Ghana, Sudan, and, what is important for future work in Ukraine – in Russia. Among potential Kuwaiti investors to the Ukrainian AIC one may call Kharafi Group. Food industry is not primary business for this company; however, it has experience of successful work in this direction.

It should be noted that there will be no mass entry to the Ukrainian market of governmental structures from Arab countries which could purchase agricultural business directly as they do in Eastern African countries. In case of large inflow, investments shall be made by investors entering the existing Ukrainian companies with further increase of land bank in case of adaptation to social and economic reality.
There are also many talks in Ukraine about investments from China. However, there are currently no obvious practical steps by Chinese investors towards coming to the agricultural production sector observed.

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Eastern Europe

A New Phase of Escalation in the Russia-Ukraine War

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Photo: Grigoriy Sisoev, RIA Novosti

The month of September marked a new phase of escalation in what was being branded as a “grinding war of attrition”. Invading Russian forces, after having lost the momentum thanks to unwavering Ukrainian resistance supported by crucial military assistance from the West, kept narrowing down their military objectives, ultimately failing to achieve even those narrowed down aims virtually leading to a stalemate.

The tables started turning during the early part of September. Armed with cutting-edge Western weaponry and vital intelligence support, Ukrainian Army launched a two-pronged counteroffensive in the South towards Kherson and in the Northeast. While Ukrainians made some gains in the South, startling was their lightning recapture of the territory in the northeast, and even more startling was the rout of the Russian forces, which was such complete and absolute that Ukrainians recaptured more territory in less than a week compared to what Russians were able to take during past many months. The demoralized Russian troops hardly put up a fight and abandoned loads of arms and ammunition during the hastily carried out disordered retreat. Unsurprisingly, the Russian defense ministry sought to obfuscate the rout by cataloging it as a withdrawal aimed at regrouping. 

While the Ukrainian gains demonstrated the high morale and motivation of the Ukrainian troops, traits indispensable for winning wars — the Russian rout once again exposed the material and motivational shortcomings of what was for long regarded as one of the most powerful and capable military machines in the world: the Russian military. Though the Western military and intelligence support played a decisive role in the earlier stalemate and recently in the speedy Ukrainian gains, the heroism and unflinching commitment displayed by the Ukrainian nation and troops against all the odds marks the start of a new chapter in the national history of Ukraine — through which it is emerging as unified than ever.

Since it invaded Ukraine in February this year, Kremlin has been very careful so as not to transmit any signal implying weakness of its military or Putin’s control over the state of affairs within Russia. However, on September 21st, Moscow decreed the first mobilization, though partial, since World War II, which marked an implicit admission that Putin is failing to achieve his military objectives with the available military force. Though there has not been an official word on the exact numbers, media reports claimed that the numbers being mobilized are around 300,000 while other estimated, mostly based on the scale of the draft campaign in Russia reaching up to smaller towns and villages, placed the figure as high as 01 million. Irrespective of the exact numbers, the military draft marks a major escalation in the war and dims the hopes of a rapid Ukrainian triumph over the invading Russian force, which the Western observers started pinning after the lightning Ukrainian gains during the first half of the month.

Putin unquestionably has played a massive gamble. Western media has been reporting numerous incidents of people trying to leave Russia to circumvent being drafted; however, these reports can be highly exaggerated. Nevertheless, it must also be acknowledged that irrespective of how indoctrinated a country’s population is, being recruited forcibly for a seemingly wasted cause is unlikely to receive much traction in Russia. Even though at this time Putin does seem to be too worried about the decline in domestic approval, in the medium to long-term, the draft venture can turn the odds drastically against the Russian President, especially, if the death toll mounts and the campaigns designed to gaslight the masses do not have the desired impact.

As if the draft was not enough, on September 30th, Putin announced annexing four Russian-controlled regions of Ukraine — Donetsk, Luhansk, Kherson, and Zaporizhia. The move marks the biggest annexation of territory since World War II and makes up an estimated 15 to 20 of Ukraine’s landmass. After declaring the inhabitants of the annexed region as “our citizens forever”, the Russian President pledged to defend the Russian land, which as per Russian law also includes the annexed region, employing all available strength and means — phraseology that was translated as another nuclear threat in a long series hurled by the Russian President since the start of the war.

As the lines are being written, the Ukrainian Army has captured the city of Lyman on Donetsk while the Russian defense ministry has acknowledged the takeover again calling it a withdrawal by Russian forces. The takeover of Lyman, however, demonstrates that does not matter how many lines one draws on the map, the actual outcome of the war would be determined on the battlefield, wherein Ukrainians, at least for the time being, have the momentum on their side.

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Latvia is inundated with NATO

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Image source: mk.gov.lv

Ukraine has become the excellent excuse for NATO expanding of Europe. The Alliance justified numerous military exercises and weapons supplies to the European countries by the need to response to Russia’s actions in Ukraine. NATO Spokesperson, Oana Lungescu said that NATO has to reinforce its presence in the eastern part of the Alliance.

The most active recipients of such support are the Baltic States. It is interesting to note, that they are so involved in the process of foreign weapons and troops deployment on their territories, that do not realize the danger of such political decisions. The U.S. and NATO do not only deploy military contingents and weapons but even start to decide and speak for them in the international arena.

Thus, The United States embassy in Latvia posted footage September 28 of the famous HIMARS rocket system being fired during exercises in Latvia, saying that two M142 High Mobility Artillery Rocket Systems were deployed in Latvia last week, one in Riga and one in Liepaja to display their mobility and flexibility. A U.S. HIMARS artillery system destroyed training targets in the Baltic Sea during exercise Namejs 2022, held at the Škede range in Latvia.

“It’s another opportunity to say once again how important Article 5 of NATO is, where an attack on one member of NATO is an attack on all members of NATO,” said John Carwile, United States Ambassador to Latvia.

Though the demonstration was intended to show NATO’s readiness to defend the Baltics, in reality it showed the Alliance’s intention to use such weapons against Russia. The matter is, Moscow’s response will leave Latvia no chance to survive. It would be totally ruined.

NATO decides for Latvia. The country is unhappy to become the main possible target because it was turned into host nation for NATO troops and weapons which openly threaten Russia. In other words the country was fully annexed by NATO troops, weapons, ideas and political decisions. Latvia’s security today does not depend on Riga any more, its territory is inundated with NATO weapons which are more dangerous for the country itself than for much more powerful Russia.

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Ukraine war-induced crisis affecting women and girls disproportionately

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A mother and daughter flee violence in Bucha, Kyiv Oblast, Ukraine. © UNDP/Oleksandr Ratush

A new UN report reveals how the Ukraine war and its global impacts on food, energy, and finance are affecting women and girls disproportionately, both inside the country and around the world.

The policy paper developed by gender agency UN Women and the Secretary-General’s Global Crisis Response Group, describes how the war has widened gender gaps in hunger, education and poverty, and has also increased gender-based violence.

Dire situation

For example, school-aged girls are now at a higher risk of being forced out of school and into marriage, as a way for desperate families simply to make ends meet.

Women have also reduced their own food intake, so that other family members can have more, amid food price hikes and shortages.

Meanwhile, energy prices have left families with no choice but to continue using low-tech fossil fuels, exposing women and girls to household air pollution, which kills 3.2 million people each year.

UN Women also estimates that around 265,000 Ukrainian women were pregnant when the war broke out and have had to endure physical and health challenges in the past months.

Rural food insecurity

The document notes that women-headed households in Ukraine were already more food insecure before the war, with 37.5 per cent of them experiencing moderate or severe levels of food insecurity, compared to 20.5 per cent of male-headed households.

Currently, rural women in Russian occupied territories are not able to do agricultural work due to high insecurity and lack of resources. However, they are having to accommodate internally displaced people, multiplying their unpaid care and domestic work responsibilities.

Sexual violence on the rise

The report warns of an “alarming” increase in gender-based violence, transactional sex for food and survival, sexual exploitation, and trafficking, not only in Ukraine but worldwide, amid worsening living conditions.

“Systemic, gendered crises require systemic, gendered solutions.  That means ensuring that women and girls, including from marginalized groups, are part of all the decision-making processes.

“That is simply the only way to be certain that their rights and needs are fully taken into account as we respond to the clear facts before us”, said Sima Bahous, UN Women Executive Director.

Recommendations

The analysis highlights that as women continue to bear different and additional burdens of war, they must be represented in all decision-making platforms on de-escalation, conflict prevention, mitigation and other processes in pursuit of peace and security for the people of Ukraine and beyond.

The report calls on the international community to promote the right to food by targeting the specific nutrition needs of women and girls and accelerating the transformation towards more equitable gender-responsive and sustainable food systems.

UN Women and the UN’s Global Crisis Response Group also recommend world leaders to ensure equal access to affordable and sustainable energy, as well as boost reporting on gender statistics and sex-disaggregated data.

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