In wake of G20, Gulf states boost ties to Brazil, Latin America

Middle East analysts are welcoming a bid of agreements concluded during the caller acme successful Brazil of the 20 biggest economies, saying they unfastened caller avenues for Gulf Cooperation Council states to fortify economical relations with emerging markets crossed Latin America.

Among different developments, Crown Prince Khaled bin Mohamed bin Zayed of the United Arab Emirates signed a memorandum of statement with Brazilian President Luiz Inacio Lula da Silva. It is designed to found a associated mechanics “aimed astatine promoting UAE investments successful strategical sectors successful Brazil,” according to the Abu Dhabi quality tract Gulf News.

A 2nd memorandum of statement betwixt the overseas ministries of the 2 countries called for unspecified practice successful Africa, Gulf News said.

Saudi Arabia, for its part, concluded a memorandum of statement establishing a Saudi-Brazilian Coordination Council that is intended to foster practice crossed sectors that see economic, diplomatic and strategic, according to the Saudi Press Agency.

The agreements physique connected well-established ties betwixt the Gulf Cooperation Council states and Brazil, a large cultivation exporter whose efforts to code planetary nutrient insecurity align with the GCC’s request to unafraid captious cultivation imports, including meat, cereals and coffee.

The Gulf countries, for their part, are good positioned to supply Brazil with phosphate, aluminum and oil.

Brazil is already the GCC’s largest trading spouse successful Latin America, followed by Mexico and Argentina. In 2022, much than 70% of Brazil’s exports to Arab countries consisted of cultivation products specified arsenic nutrient and grains.

Zubair Iqbal, a nonresident student astatine the Middle East Institute and erstwhile International Monetary Fund official, told VOA that Brazil offers the GCC states promising opportunities for commercialized and investment.

But helium noted that tangible advancement toward enhanced GCC-Latin American practice remains mostly reliant connected bilateral agreements alternatively than multination initiatives, limiting their impact.

“While determination person been wide exhortations for furthering commercialized relations, circumstantial responses volition beryllium a relation of bilateral agreements,” helium said. “Prospects for much commercialized and accrued concern stay strong, particularly with Brazil. However, it volition beryllium upon nationalist interests and alternate options.”

According to the latest disposable information for 2022, GCC countries, peculiarly the UAE and Saudi Arabia, person progressively expanded their concern footprint successful Latin America, totaling $4 cardinal betwixt 2016 and 2021.

The UAE’s sovereign wealthiness fund, Mubadala, has been a cardinal player, with investments exceeding $5 cardinal successful Brazil since the aboriginal 2010s. Notable projects see an lipid refinery, a toll roadworthy and collaborations with Brazil’s largest biofuel producer. Mubadala has plans to put an further $1 cardinal annually successful Brazil.

UAE-based JFR Investments, owned by an Angolan businessman, has meantime signed important mining agreements since 2022 with companies successful Brazil and Peru. And Dubai-based DP World manages larboard infrastructure crossed Latin America.

Saudi Arabia’s Public Investment Fund is besides deepening its ties successful Latin America. In June 2024, PIF hosted a league successful Rio de Janeiro, wherever it announced $15 cardinal successful planned projects for Brazil.

In August 2023, Saudi Investment Minister Khalid Al-Falih toured 7 Latin American nations to research opportunities successful sectors specified arsenic mining, nutrient processing, agriculture, transport, wellness care, entertainment, pharmaceuticals and biotechnology.

Prior Saudi investments successful the portion see the acquisition by Saudi Aramco of Chilean substance retailer Esmax and a $500 cardinal concern by the Saudi Fund for Development successful an Argentine state pipeline.

Kevin Funk, a governmental economist specializing successful Latin America, told VOA that Brazilian companies are meantime showing greater involvement successful investing successful the Gulf arsenic the portion diversifies its system distant from dependence connected oil.

There is present an array of ample and tiny Brazilian businesses operating successful the Gulf countries, and successful galore sectors, including food, covering and cosmetics, Funk said. Among them is Sao Paulo-based JBS, the world's largest nutrient processor, which has established a important beingness successful the Gulf.

“Yet the fundamentals of the interregional commercialized narration stay mostly constant, with Brazil and definite different Latin American countries mostly exporting superior products specified arsenic cultivation goods and minerals to the region, portion chiefly importing fossil fuels and fertilizers,” helium said.

Brazil's reliance connected Gulf fertilizers has grown, partially owed to proviso concatenation disruptions caused by Russia’s penetration of Ukraine.

However, home challenges successful Latin America — specified arsenic dilatory economical growth, governmental instability and inequality — person constricted the region's quality to prioritize interregional ties, Funk said.