MARKETING AND

REGIONAL
INTEGRATION FOR
FOOD SECURITY IN
THE ARAB WORLD
Macromarketing and the Crisis of the Social
Imagination
According to most analyses, the region faces serious
food insecurity and the gap between production and
consumption of food is widening. The Middle East /
North Africa (MENA) region currently imports almost 50
percent of its food needs, by far the largest dependence
on imported food of any region in the world
Meanwhile, food imports mainly come from countries outside the MENA region. These sources
Meanwhile, food imports mainly come from countries outside the MENA region. These sources may become
may become increasingly unreliable, with quotas and export restrictions at times of shortages
increasingly unreliable, with quotas and export restrictions at times of shortages and reduced reserves in supplier
and reduced reserves in supplier countries. GCC countries have been very active in using their
countries. GCC countries have been very active in using their capital surpluses to buy agricultural land around the
capital surpluses to buy agricultural land around the world for more assured supplies. In recent
world for more assured supplies. In recent years, however, the potential political cost of too much such
years, however, the potential political cost of too much such investment is becoming apparent.
investment is becoming apparent. Often, such foreign investment is viewed as ‘land grab’
Often, such foreign investment is viewed as ‘land grab’
Nevertheless, all the elements needed to alleviate the food security problem in the Arab region are available, but
Nevertheless, all the elements needed to alleviate the food security problem in the Arab region
they are not coordinated, and thus, at present, do not contribute much to solving the problem. Egypt and Sudan,
are available, but they are not coordinated, and thus, at present, do not contribute much to
the main areas of food production, are somewhat distant from important markets, and lack coordination to
solving the problem. Egypt and Sudan, the main areas of food production, are somewhat distant
optimally supply dispersed multi-segment demand. The GCC, the main area with ample financial and energy
from important markets, and lack coordination to optimally supply dispersed multi-segment
resources to substantially upgrade agriculture, lacks productive capacity. From both the supply and demand side,
demand. The GCC, the main area with ample financial and energy resources to substantially
inefficiency and waste are rampant in the region
upgrade agriculture, lacks productive capacity. From both the supply and demand side,
inefficiency and waste are rampant in the region
This study will propose a framework to improve food security in the Arab region. We focus
This study particularly
will proposeon Egypt and Sudan,
a framework which
to improve have
food potential
security for Arab
in the massregion.
agricultural production, and the
Gulf, which
We focus particularly onhas
Egyptample
and capital
Sudan, and energy,
which have as well as for
potential high-spending power on the demand side. The
mass agricultural
basicthe
production, and idea is not
Gulf, whichnew, but
has we approach
ample it using
capital and macromarketing
energy, as well as high-concepts, looking at the problem
fromon
spending power supply chain and
the demand distribution
side. The basic channels
idea is notperspectives
new, but we approach it
using macromarketing concepts, looking at the problem from supply chain and
distribution channels perspectives
We adapt the resource-advantage framework to examine the case for economic integration between Egypt, Sudan, and the
GCC.
-Resource-advantage theory maintains that economic growth is produced by the process of vigorous R-A competition
-Firms scramble to gain advantage in particular market segments through use of tangible and intangible resources they have

RESOURCE ADVANTAGE
available. Various resources have differential value, depending on their quality and how they are used, and the value seen by the
customer depends on market segment. Resources also have different costs, so both effectiveness and efficiency are important.
So is innovation, because finding new or improved ways of using resources can change the value customers see, and change the
cost structures of employing the resources.

We translate the R-A framework back to the national level and look at how Egypt, Sudan, and the GCC, operating as an
integrated region, would have strong competitive advantage on the world stage

• natural resources (e.g., land, water, energy, minerals, climate) • capital resources (e.g., financial assets, liquidity, and reserves)
• physical infrastructure (e.g., roads, transportation and storage facilities, utilities, ports) • human resources (e.g., skilled labor) •
entrepreneurship (e.g., management with strategic planning knowledge and experience) • technology (e.g., state of the art
know-how, and research capability) • institutional (e.g., industry structures, organizations, supply chain, channels of distribution)
• legal infrastructure (e.g., agriculture regulations; land ownership laws, pricing, subsidies and tax laws; business, trade,
environmental, anti-trust, safety, quality control, consumer protection and marketing laws and regulations).
EGYPT&SUDAN
Non-energy natural resources:advantage
R-A comparment
Abudant land, plenitufl water, but some
political risk from claims by upstream
countries.Most agricultural land can be
very productive, but needed capital and
technology to fully exploit this is scarce
Energy resources:parity
Moderate levels of energy resources at
moderate prices, but these barely meet
current demand.Additional capital and
technology needed to expand output for
future needs
Capital:strong disadvantage
Substantial goverment budget deficit, and
weak indward FDI
Physical Infrastucture:disadvantage
Both countries rank low on infrastructure,
Notably logistics capability
GCC countries
Non-energy resources:strong disadvantage
Very limited arable land and water
resources.Heavy investment in modern
irrigation methods and technology by
Saudi Arabia has be sucessfull, but at very
high cost
Energy resources:strong advantage
Very rich in both oil and gas, far in excess
of local demand.GCC as a whole is one of
the main exporting-energy regions of the
world.
Capita:strong advantage
Large goverment budget surplus in most
countries, and substantial inward FDI.GCC
is also a major source of outwards FDI
Physical Infrastructure: advantage
Many GCC countries rank high by world
standards on infrastracture, and specifically
Skilled labor for agriculture (and industries
such as food processing) is abundant and
cheap.Cereal crop yields are highest in the
Arab world
Human resources (managerial): advantage
Shortage of skilled labour, most is
imported.Saudi Arabia has high yields, but
ist agriculture is very costly and water
intensive
Human resources (managerial): disadvantage

Abundant managerial and techincal talent, Domestic supply of managerial and technical
although much of it works outside the country talent is insufficent. GCC countries rely on
talent from outside, inculding Egypt
Entrepreneurship : advantage Entrepreneurship : disadvantage
Egypt has a high rate of self-employment Many Gcc countries essentially guarantee
compared to most Arab countries.This is jobs for citizens, so enrepreneurship is weak,
because of a poor economy, but it indicates except among expats.Kuwait be among the
a large pool of experience operating small most extreme-nearly 80% of employed
business.The home grown private citizens had public sector jobs.Expats, almost
equity/venture capital industry is the largest 83% of the labor force, were mostly private
in MENA, accouting for 39% of commited sector
capital in 2007 in the Arab region
 Economic Integration for improved food security in the Arab region

Economic integration is now a must for economic advancement and prosperity in the MENA region.
Free flow of goods, services, capital, and labor in an integrated region increase productivity of resources as each
resource will move freely to where it is needed most.
• free flow of goods and services inside the two integrated regions
• free flow of capital
• common standards
• common external tariff
• common agriculture policy
• common monetary and fiscal policy.
• common currency.
• free flow of labor and management.

If efficient marketing is added to the mix (as implied by several of the key resources in Table 1), many shortage areas
will disappear, imports from outside this integrated area will significantly decrease, and many food products will be
available for export
 The Role of Marketing
THE ROLE OF MARKETING
Marketing research and marketing information systems are needed to conduct feasibility studies, linking information about
demand to production of food products, and then about demand on the production side for inputs. Before production,
producers need to know about market demand for each product in terms of quantity and quality desired by consumers.
Currently, farmers produce many crops in quantities, varieties, and qualities not needed by customers, which wastes agriculture
resources. In most Arab markets, customers end up purchasing food imported from outside the region and leave many domestic
food products to rot. The information must be current and available to farmers, channel members, and suppliers. Market
information is often poor for small farmers in the main production areas, both for agricultural output that the farmer must sell,
and for agricultural inputs (including innovations) that the farmer may wish to consume. For example, extension services have
been neglected in dryland farming areas of Sudan for decades, so farmers have little opportunity to learn of new technology and
techniques.

With economic integration and effective marketing, food supply and food distribution in the Arab region have the potential to
increase significantly in both volume, and value. If this concept is applied to 22 Arab countries, it could be expected that the
food security problem in region would be greatly alleviated, if not eliminated. Of course, the positive impact of regional
economic integration and of effective marketing in the region will go far more than just solving the food security problem.