Sao Paulo, Brazil – Saudi Arabia’s funding minister was met with boisterous claps and cheers earlier this 12 months as he gave an optimistic outlook on the potential to deepen his nation’s financial ties to Brazil.
Addressing the first-ever, Brazil-Saudi Arabia funding discussion board in Sao Paulo in July, Khalid al-Falih mentioned that regardless of the 1000’s of kilometres separating them, the 2 nations have extra in frequent than meets the attention.
“Brazil and Saudi Arabia, two proud members of the G20 and vitality producers, are properly positioned to be strategic companions, with us being the financial leaders of our respective areas,” al-Falih mentioned.
“With our strategic pursuits aligned and personal sectors sturdy, we might turn out to be a high 5 investor in one another’s economic system. I consider this can be potential.”
Flush with money following a file $161bn revenue for state oil giant Aramco final 12 months, Saudi Arabia has ploughed billions in investments into Brazil’s mammoth mining and meatpacking sectors.
Whereas the 2 international locations have lengthy been buying and selling companions, the dominion’s newest Brazil investments tie in with its bold, “Imaginative and prescient 2030” reform programme to diversify the Saudi economic system and cut back its dependence on oil revenues, specialists say.
“It’s a part of a broader technique to reinforce, invigorate and broaden Saudi Arabia’s world linkages,” mentioned Robert Mogielnicki of the Arab Gulf States Institute, a assume tank in Washington, DC.
For Brazil, it is a chance to draw Saudi investments in trade and infrastructure, in addition to safe provides of the dominion’s fertilisers to make use of for agricultural manufacturing.
“There’s some huge cash the Gulf international locations have that Latin American international locations are prepared to draw to their very own international locations and areas,” mentioned Guilherme Casaroes, a political scientist with Brazil’s Getulio Vargas Basis.
Saudi Arabia’s Brazil investments have thus far prompted not one of the public controversy typically related to the Gulf nation over its human rights file, with no vital backlash from rights teams or progressive politicians.
“Brazil doesn’t intrude within the affairs of different international locations, it’s a cornerstone of our international coverage,” Hussein Kalout, who served as secretary of strategic affairs within the authorities of Brazil’s former President Michel Temer, instructed Al Jazeera.
The deepening ties have been within the highlight in latest weeks as Saudi and Brazilian authorities officers made journeys to one another’s international locations to debate better commerce and investments.
Days earlier than the funding discussion board occasion in Sao Paulo, Saudi agency Manara Minerals introduced its $3.4bn acquisition of a 10-percent stake in Brazil mining colossus Vale’s base metals sector, which incorporates the nickel, copper and cobalt important for the production of electric vehicles.
“Manara Minerals goals to contribute to the resilience of worldwide provide chains and speed up the worldwide vitality transition,” the corporate mentioned in an announcement.
The transfer, Mogielnicki defined, highlights Ridyah’s push to search for methods “to faucet into crucial mineral provide chains and ensure that they’ve a seat on the world desk”.
Based in January, Manara is backed by the dominion’s sovereign wealth fund PIF, one of many world’s largest, which lists the Brazil funding programme on its homepage.
In the meantime, in late July, Brazil’s Agriculture Minister Carlos Favaro led a delegation to Saudi Arabia, after which he mentioned the dominion had authorised Brazil goat imports.
Across the similar time, Brazilian meatpacking large BRF agreed to enter a three way partnership with PIF-backed Halal Merchandise Growth Firm, days after one other PIF subsidiary, SALIC, acquired a ten.7-percent stake in BRF, based on the Reuters information company.
“What we see is that with Brazil-Saudi investments, there aren’t any borders,” mentioned Tamer Mansour, head of the Arab-Brazilian Chamber of Commerce, a Sao Paulo-based enterprise affiliation.
Saudi Arabia and Brazil have been one another’s predominant buying and selling companions of their respective areas for many years, with commerce on an upward curve for the reason that 2000s.
Brazil – itself a serious oil producer – largely buys Saudi oil and fertilisers whereas the Gulf nation largely buys meat from Brazil, the world’s largest exporter and producer of halal meats. The 2 international locations have had embassies in Jeddah and Brasilia since 1973.
However lately, the partnership has deepened: In early August, Saudi Arabia invited growing nations, together with Brazil and Argentina, to a gathering in Jeddah to hunt assist for Ukraine’s peace plan amid the Russian invasion.
Later that very same month, Saudi Arabia was invited to join the BRICS financial group, of which Brazil is a founding member, however has not but confirmed its ascension.
Regardless of some latest, high-profile hostilities between Riyadh and Washington, most analysts don’t understand Saudi Arabia’s deepening ties with international locations corresponding to Brazil and China as a snub to conventional companions, corresponding to the USA and Europe.
“They don’t seem to be investments in competitors,” Kalout mentioned of the dominion’s conventional investments, corresponding to UK actual property or US authorities bonds. “It’s simply that their financial matrix has expanded.”
However analysts additionally say that Saudi Arabia and different Gulf international locations’ rising curiosity in Brazil displays wider geopolitical adjustments within the wake of Russia’s conflict in Ukraine and rising tensions between the US and China.
“This latest intensification of Saudi Arabia seeking to make investments extra in Brazil, it’s a consequence of the change within the financial geography of the world,” Kalout instructed Al Jazeera.
Nonetheless, the burgeoning enterprise ties aren’t completely with out controversy, a minimum of on Brazil’s half.
The nation’s former President Jair Bolsonaro has been embroiled in a scandal involving undeclared diamond jewelry acquired by an aide in 2021 and the sale of two luxurious watches, all gifted by Saudi Arabia whereas Bolsonaro was in workplace.
The far-right leader, his spouse and a number of other allies have been referred to as in to testify earlier than federal police on the finish of August however selected to stay silent, based on native media stories. Some authorized specialists have speculated that Bolsonaro might face embezzlement fees.
In the meantime, some analysts stay sceptical concerning the potential of the Brazil-Saudi relationship because the Gulf nation seeks out new partnerships within the face of criticism of its rights file.
But in the end, Casaroes on the Getulio Vargas Basis instructed Al Jazeera that enterprise pragmatism, versus ideology, would doubtless information the connection’s progress.
“Brazil will promote meals, promote assets and get some investments. That’s in all probability the way it’s going to appear to be within the upcoming years.”