18nov

-    It’s not your first time in Moscow, right? What are your expectations from this visit now when you are introduced to the Agrofinmost project? 


Dr Khaled Hanafy:
It is not my first time in Moscow, but it is my first time since the start of the Covid-19 pandemic, which has been a game changer. We are here to build a link between Moscow and countries of the Arab world. The idea is not to just enhance trade or business, but to set up a strategic alliance, which would take into account the changes the world is going through right now.
Russia is well positioned to be an excellent ally for establishing food hubs in the region, for instance in Egypt, in an African country and even in Latin America with the involvement of local allies. Discussions of similar projects have been going on for six years now, so there has been an extensive exchange of ideas and the concepts have matured by now. We are now ready to get down work.
There are two aspects to this. One is strategic and conceptual, the other is technical. From the strategic perspective, we believe there is great potential for connecting Russian suppliers, in particular smaller producers scattered across the country, which collectively account for a large share of output, to the end consumer in Egypt and many other Arab countries by building an integrated supply chain. This chain will encompass all the necessary elements from technology to finance, logistics, transportation, storage and will benefit from a network of allies around the globe.

Dr Sara Elgazzar:
Indeed, Covid-19 has changed the global supply chains and we need to decide now who will be our partners in the supply chain and how we shape our relations. We are among the largest importers globally, especially as far as some agricultural products are concerned. It is no secret that around 30% of food supply chain costs are wasted due to management inefficiencies. We need to find new models, which will ensure a higher efficiency of the supply chain by connecting our countries to partners all over the world through strategic alliances. Within such alliances, we will not be merely a food importer. Thanks to our geographic position, we will act as a hub and distributor of food from west to east or the other way around.

Dr Khaled Hanafy:
Yes, it is important to emphasize that we aim at building a strategic alliance rather than just enhancing trade volumes. Private sector will be key to the success of this endeavor.

-    There is much tension around the issue of food security and hunger globally and particularly for Middle East and Northern Africa. What is your take on that? 

Dr Khaled Hanafy:
Hunger as such is not a pressing issue for Arab countries. It is true that Arab countries are net importers of food, though, and our goal is to get a better deal on food supplies, if you will. We are generally able to get the food we need and in quantities we need, but we want to make sure that the supplies are stable and we get the best price for the food we buy.
It will be safe to assert that intermediaries stand to benefit the most from the current situation. If, however, we are able to establish a direct relationship between the suppliers and the consumers, match supply and demand, we will be able to improve efficiency as well as productivity. This is how the Arab will benefit from the strategic alliance we are discussing now. Currently, neither the producers nor the consumers determine the price or quantity of food. Other players do this for them. We want to change this by moving the markets towards more competition.


Dr Sara Elgazzar:
We are talking about food sustainability. This concept means that people have access to the quantity of nutritious food they want at the time they want. Food sustainability is directly related to the standard of living and the level of poverty. Even if food is generally available, it may not be of sufficient quality or may not be accessible to all people at reasonable prices. Inefficiencies of this kind arise due to the existence of multiple intermediaries all along the supply chain. If we are able to better forecast the amount of food we need and thus understand the aggregate demand to be contracted, we get more bargaining power in dealing with our counterparts in the supply chain.


-    Why do you think that Russia is the best partner for this? 

Dr Khaled Hanafy:
Russia is a major ally of many of the Arab countries. Having became an exporter of food and grains some time ago, Russia benefits from an environment with a limited number of intermediaries in the supply chain. Russia needs the Arab world as the Arab world needs Russia, so there is room for realizing mutual benefits.

Dr Sara Elgazzar:
In your search for a partner, you need to consider three elements: the political aspect, the economic aspect and the level of readiness. As far as the political aspect is concerned, Russia is accepted by the majority of the Arab countries. There are no political problems or stress between our countries, which is something very important at the beginning.
With regards to the economic aspect, there is what can be called a track record of economic relationship between Russia and Arab countries, be it in the form of bilateral trade or other agreements, which should be fine-tuned to be converted into more of a strategic alliance kind.
As for readiness, what we are now discussing is a concrete project to shape a strategic alliance. If we go ahead with this project in the near future, we will be able to achieve more than with any other partner we may consider apart from Russia.

Dr Khaled Hanafy:
We also feel strong interest from the Russian side to implement this idea for the benefit of Russia — to increase production in and exports from Russia. There is, accordingly, a strong potential for mutually beneficial cooperation.