São Paulo – Enhancing economic exchange is the primary purpose of Brazilian president Jair Bolsonaro’s tour of the UAE, Qatar and Saudi Arabia from October 26 to 31. The information was made public this Thursday (10) in Brasília by ambassador Kenneth Félix da Nóbrega (pictured, on the right), the Brazilian Ministry of Foreign Affairs’ secretary for Bilateral Negotiations in the Middle East, Europe and Africa.
“The main aspect of the visit is to inform these countries about the macro and microeconomic reforms underway in Brazil, which will enable the country to transition into a phase of sustained growth, i.e. to provide the economic reforms program with an external interface,” the diplomat told journalists at a briefing.
The idea is to present Investment Partnerships Program (IPP) projects to sovereign funds and other investors in those three countries. According to Nóbrega, there are 18 projects in place, worth a combined BRL 1.3 trillion (USD 317 billion), the majority of which are concessions and privatizations. He said opportunities will also be publicized in renewable energy, the medical and hospital industries, defense and infrastructure.
“These countries have major sovereign funds,” the ambassador said. He noted that UAE funds hold over USD 1 trillion in assets and have some USD 5 billion invested in Brazil. The Qatari sovereign fund manages USD 300 billion in assets according to Nóbrega, and its investments in Brazil also come out to about USD 5 billion, “Considering our IPP portfolio, the potential is there to attract more investment by these funds,” he argued.
Saudi funds hold about USD 850 billion, according to the diplomat, but the amount invested in Brazil is small and has been dwindling since 2015, as a result of recession. The challenge here is to bring Saudi investment back.
“This visit will also serve the purpose of advertising investment opportunities in Brazil and increasing exchange between our exporters and potential exporters to that region,” the ambassador said.
Trade
Nóbrega remarked that the Gulf countries are major importers of Brazilian agribusiness products, and that “the outlook is very good regarding exports of defense material to that region.”
Brazil-UAE trade came out to USD 2.6 billion last year, with a surplus of nearly USD 1.5 billion on the Brazilian side. The ambassador said food security is a key concern for the Arab country, which is looking to Brazil “as a reliable supplier.” Apart from the import of goods, there’s an interest in investing in agriculture and livestock farming in Brazil.
The same holds true of Qatar. Bilateral trade amounted to USD 540.5 million in 2018, with Brazil running a a USD 5.3 million deficit. The Gulf country supplies mostly fertilizer, oil and gas to the Brazilian market.
Brazilian-Saudi trade was USD 4.4 billion last year, with a USD 218.6 million deficit for Brazil. Nóbrega pointed out that Saudi Arabia is the source of 33% of Brazil’s oil imports.
Saudi Arabia is a major buyer of food products from Brazil, and one of the leading importers of Brazilian chicken products. According to the diplomat, there’s room for Brazilians to invest in agriculture and livestock products in Saudi territory.
According to the Brazilian Foreign Ministry, 120 executives have registered to join the presidential tour. The Arab Brazilian Chamber of Commerce will also participate.
Agreements
First stop will be in the UAE, where Bolsonaro will meet authorities such as the crown prince of Abu Dhabi, Mohammed Bin Zayed Al Nahyan, and participate in a Brazil-UAE business seminar called “Prospects of macroeconomic environment and Brazilian business scenario.”
Agreements that may be signed include documents on the fund for strategic cooperation in defense, cooperation in science, technology and innovation, mutual assistance in customs administration, civil aviation, biodiversity, food production, cultural cooperation, and law cooperation in civil matters.
In Qatar and Saudi Arabia, negotiations are expected to start on agreements to avoid double taxation over income from reciprocal investment, as well as a Cooperation and Investment Facilitation Agreement. Brazil has already signed such agreements with the UAE.
In Doha, Bolsonaro will meet Qatar’s emir, Tamim Bin Hamad Al Thani, and prime minister, Abdullah Bin Nasser Al Thani, as well as joining a seminar on the same topic. Still in Qatar’s capital city, agreements may be signed for visa exemptions, science, technology and innovation cooperation, between both countries’ Defense ministers, cooperation in healthcare, between both country’s diplomatic training institutions, mutual customs assistance, sea transport, and cooperation in large events. Brazil hosted 2014 World Cup and 2016 Summer Olympics Games, while Qatar will host the 2022 Cup.
In Saudi Arabia, Bolsonaro will have meetings with king Salman Bin Abdulazis and crown prince Mohammed Bin Salman; join the Future Investment Initiative, a forum nicknamed “Davos in the Desert;” and will be in the corporate event in the Council of Saudi Chambers of Commerce.
Negotiations are underway for a memorandum on visa granting, a defense cooperation agreement, a science and technology cooperation, peaceful nuclear energy, customs administration, culture, and between BNDES and the Saudi Fund for Development.
Politics
Other goal of the trip, Nóbrega said, falls into the government’s foreign policy to strengthen Brazil’s relations to both Israel and the Arab world. He pointed out that Bolsonaro visited Israel last March and now will go to the Arab countries. In 2020, the president may also visit Kuwait and other Arab nation yet to be revealed.
Bolsonaro’s campaign promise to move Brazil’s embassy from Tel Aviv to Jerusalem caused tension in the country’s relations to the Arab countries. During his visit last March, however, he announced he’ll just open a trade office in Jerusalem, which may occur in November or December.
When asked what Bolsonaro will say if asked about this in the Gulf countries, the ambassador said: “The answer will be the one in the joint announcement made during the visit to Israel, which clearly states the Brazilian government’s decision to open an office for fostering business, science, technology and innovation in Jerusalem to be run by Apex (Brazilian Trade and Investment Promotion Agency). Israel is an innovation power. So that’s what he’ll say, that was the decision… Unless the president… That’s the information Itamaraty has, that this was the decision composed in the joint statement and that’s the decision.”
He also added that Bolsonaro will talk to the countries’ authorities not just on business but political prospects too. “It’s time to hear at first hand how the chiefs of states perceive what’s happening on the region, the current tensions in the Gulf,” said Nóbrega. Saudi Arabia and the UAE have ruptured their relations to Qatar, and a belligerent rhetoric is escalating between Saudi Arabia and its allies against Iran.
During the travel, Bolsonaro will be joined by the minister of Foreign Affairs, Ernesto Araújo, Economy, Paulo Guedes, Environment, Ricardo Salles, Science and Technology, Marcos Pontes, Chief of Staff, Onyx Lorenzoni, Defense, Fernando Azevedo e Silva, and Citizenship, Osmar Terra. The Minister of Mines and Energy, Bento Albuquerque, will join an event in Saudi Arabia two days before the presidential trip.
Translated by Gabriel Pomerancblum & Guilherme Miranda
