RIO DE JANEIRO, BRAZIL – Saudi Arabia has announced that it will invest US$10 billion in Brazil, the equivalent of about R$40 billion. The amount was enthusiastically welcomed by the federal government and is regarded as President Jair Bolsonaro’s best achievement in his tour of Asia and the Middle East.
The resources are significant for Brazil, which still struggles with its economy, yet small compared to other investments announced by Saudi Arabia – one of the largest powers in the Arab world, which is trying to put into practice an ambitious plan to diversify its wealth and reduce its dependence on oil.
Saudi Arabia has announced a US$100 billion investment in India alone, according to Saudi Trade and Investment Minister Majid bin Abdullah Al Qasabi. The figure is ten times what the Arab nation will allocate to Brazil.
The pledge to India was made earlier this year, and the Brazilian announcement was made last Tuesday, October 29th.
The Indian Prime Minister, Narendra Modi, was in Riyadh, the Saudi capital, at the same time as Bolsonaro. Like the Brazilian, he spoke at the Future Investment Initiative forum, aimed at investors and dubbed the “Davos of the desert”, in reference to the Swiss city that hosts the World Economic Forum.
Both met with the king of Saudi Arabia, Salman bin Abdulaziz, and the crown prince, Mohammed bin Salman.
Brazil’s current population is 210 million, according to the Brazilian Institute of Geography and Statistics (IBGE). The Indian population is estimated at 1.3 billion, according to data from the UN (United Nations).
In addition to having a population approximately six times greater than Brazil’s, India is also the largest supplier of foreign labor to the Arab country, contributing 22 percent of its workforce, according to the Indian newspaper Hindustan Times.
India is still considered strategic for Saudi Arabia due to its location in Asia.
What will the Saudi investments target?
In the case of India, the allocation of a good portion of the money has already been settled. Saudi Arabia’s state-owned oil company, Saudi Aramco, in partnership with a company from the United Arab Emirates and three Indian companies, will build the largest refinery in the world in India.
The total investment will be US$ 60 billion and Saudi Arabia will contribute US$35 billion, as announced by Minister Al Qasabi on Thursday, October 31st.
The Indian government had chosen the site for the construction, in Ratnagiri, a port city, but was forced to backtrack after protests by local mango producers. “We are waiting for the Indian government to choose new land,” said Al Qatabi. “The ball is in their court.”
In Brazil, priority will be given to projects linked to agriculture.
He explained that Saudi Arabia is “highly dependent” as it imports approximately 85 percent of the food consumed in the country. Therefore, they need food security and are looking to Brazil as a strategic partner in the sector.
Al Qatabi added that Brazil has come a long way in services and logistics in recent years, so the Saudis will also be keeping an eye on privatization projects and infrastructure.
These projects should be enabled through the PPI (Investment Partnership Program), under the responsibility of the president’s Chief of Staff. A committee to provide technical assistance to the Saudis should be formed.
Source: UOL