Saudi Arabia seeks to strengthen its presence in Latin America and the Caribbean with new trade ties

Saudi Arabia He did not hide his interest Latin America And this Caribbean. Cooperation between the Arab nation and the region was already expressed last November, when a group of leaders traveled to Riyadh for the inaugural summit. Caricom He came back with investment commitments along with Saudi Arabia USD 2.5 billion For Caribbean Development.

“It is time for Guyana and CARICOM to find non-traditional partners in the pursuit of their development goals,” said the Georgetown President. Irfan Ali.

However, this is only a small part of the reconciliation between the parties, which is expected to continue to increase in the coming years.

Riyadh is on its agenda Vision 2030 Project – announced by Crown Prince Mohammed bin Salman in 2016- through which he seeks Diversify your economy It should not be limited to oil, which is close to 40% of its nominal GDP. Instead, the kingdom seeks profit from all its money To encourage investments abroadMainly in less liquid areas and also indirectly New jobs should be created for the youth (63% of your community).

Although it maintains a lower profile than other countries such as Russia and China, Riyadh already has several alliances in the region and will do so. “The Saudis are seen as very aggressive in strengthening ties around the world, and Latin America is part of that,” commented the former US ambassador to Yemen and current director of Saudi affairs for the Arabian Peninsula at the Middle East Institute. Gerald Feuerstein, In conversation with Americas Quarterly.

Last August, Investments Minister Khalid al-Balih toured seven Latin American countries where he “explored opportunities. Strengthen and deepen investment partnerships“, with a view to confirm raw materials Y Access to markets.

For example, the National Oil Company made its first investment in the retail sector this year Get Chilean fuel distributor Esmaux Open its first gas station in the country, with the possibility of opening 300 more in the next two years. Meanwhile, the Saudi Fund for Development announced in June 2023 150 million USD loan to Guyana, construction purpose of bridges and houses. And, in his case, he has already received more than 235 million USD since 2016.

In ColombiaThe kingdom values Embassy openingThis may promote a reconciliation between the parties.

however, A very remarkable case Brazil. There, relations have reached another level and will continue to grow. Their relationship is ancient 1970 And their trade-offs are already around 8 billion US dollars, according to official estimates. Only in 2023, there were exports to Arab countries USD 3.200 Millions The highest in a decade—and expected 20 billion USD by 2030.

“Latin America is a natural partner (for Saudi Arabia) because it exports plant and animal proteins,” he said. AQ Najad GhauriFounding partner and principal researcher of the Middle East Studies and Research Group.

Brazil is the world’s leading exporter Carne Halal -that is, produced and processed according to the principles of Islam- which makes the kingdom dependent on exchanges with the South American giant. That’s why, last year, local firm PRF announced an alliance with Halal Products Development Company, a subsidiary of the Saudi Arabian sovereign wealth fund.

Had an eye on Riyadh too Mining Department. In recent months, Brazilian company Vale sold 10% of its base metals unit to Manara Minerals, a joint venture between the Saudi Arabian Mining Company and PIF, for $2.5 billion.

At the same time, Saudi Arabia’s National Industrial Development Center and AHQ team reached out to local people Embraer And they got contracts for the construction or assembly of the aircraft in the Arab country.

“With the evolution of the Global South, the shared values ​​between Brazil and Saudi Arabia, combined strategic interests and strong private sectors … why can’t we become one of the top five investors in each other’s economy?”Investment Minister Khalid Al-Falih made the comments during the Brazil-Saudi Arabia Investment Forum in Sao Paulo last July.

They are “deepening trade relations with Brazil in all areas” and “I think it is a very strategic plan to use Brazil’s resources as fuel for its national development plan.”“said Elcinia de Castro, professor of international relations at Anhembi Morumbi University.

However, all this is not possible without one High level diplomacyThis guarantees a balanced relationship.

In November, during the summit in Riyadh, the President Luis Inacio Lula da Silva He defended his country “Saudi funds are not only interested in knowing how much they can invest in Brazil, but how much Brazilian businessmen can invest in Saudi Arabia”. For its part, the Kingdom commented that it was analyzing an opening Investment Office there.

It won’t take long to see the next steps. Next June 11, in Rio de Janeiro, The Priority Summit in Latin AmericaFor two days, the Kingdom is the place to look for new investment opportunities among industry leaders, government officials and many former regional leaders.

Meanwhile, at the end of the year, in November, Lula will hold G20 Summit, a constituency in which both countries are members. Also, earlier in the year, Brazil joined the alliance OPEC+Invited to join Saudi Arabia in August 2023 BrixAlthough its admission is still pending.

On the other hand, another CARICOM-Saudi Arabia meeting is scheduled to take place in 2026, in which the Arab country will continue to assert its interest.

Riyadh “thinks regionally. “They don’t just want Brazil, they want all of Latin America close to them… Part of their grand plan is to become the leader of the Global South, along with Brazil, India and others, later on. Hold this position.”Castro concluded.