Isaura Daniel, special envoy*
Brasilia – Behind the Arab and South American leaders who will meet this Tuesday and Wednesday in Brasilia for the summit of the two regions will be 34 countries which, together, represent an economy of more than US$ 1.8 trillion. The value is all the riches generated in one year by the nations which will be part of the meeting.
On the Arab side are world oil giants such as Saudi Arabia, Iraq and United Arab Emirates. On the Latin side, economies of diversified riches such as Brazil and Argentina, great agricultural producers, but also strong in the manufacture of finished products like shoes and automobiles.
Arabs and South Americans, despite having their economical activities centred in different fields, have similar economic potential. Out of the more than US$ 1.8 trillion the two regions obtained in Gross Domestic Product (GDP) in 2004, approximately US$ 1.07 billion correspond to South America and US$ 817.7 million to the Arab world.
While the majority of the South American countries import oil from the Middle East, which holds 70% of the world reserves, the nations of the region are great consumers of the food produced in South America. The Middle East imports 90% of the food consumed.
Among the 12 South American countries, Brazil is the greatest economy, with a GDP of US$ 732 billion last year, followed by Argentina. In the Arab world, Saudi Arabia is at the top with US$ 240 billion. The next coutnry is the United Arab Emirates, with US$ 90 billion, and Algeria with US$ 76.8 billion.
The countries that will participate at the summit for South America are Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela. The Arabs are United Arab Emirates, Lebanon, Saudi Arabia, Oman, Comoro Islands, Palestine, Egypt, Morocco, Sudan, Algeria, Bahrain, Djibouti, Yemen, Iraq, Jordan, Kuwait, Libya, Mauritania, Qatar, Syria, Somalia, Tunisia.
In spite of good part of the Arab riches being in oil, the Arab countries are working to reduce their dependence in the sector. The United Arab Emirates is one of the countries leading this front with investments, for example, in the agriculture area. Tourism is also an ascending sector in the region and is receiving a series of investments.
There are Arab countries that already hold a privileged international position outside the oil sector. Morocco is the world’s greatest sardine supplier. A similar position is held by Tunisia in the production of dates. Egypt is known for having one of the most noble cottons in the world and for producing bed and bath linen.
Brazil imports as much as the dates as the sardines and as the cotton products from the Arab countries. Last year, Brazil spent US$ 4.1 billion with Arab goods. Great part of this value, however, still corresponds to petroleum.
Brazil had a turnover of US$ 4 billion with sales to the region. The export basket is more diversified, but also centred on another kind of products: food. At the top of the list come sugar and meats. Trade agreements that are being negotiated between the Mercosur (customs union between Brazil, Argentina, Paraguay and Uruguay) and Morocco, Egypt and the Gulf Cooperation Council (GCC), where the discussions will have continuity during the summit, may increase the flow even more.
Countries of the South
The countries of South America should grow in average 4.7% this year of 2005. The forecast is of the Economic Commission for Latin America and the Caribbean (Cepal), organisation related to the United Nations Organisation (UN). Argentina will probably lead the ranking, with 6%, followed by Chile, with 5.7%, Peru and Venezuela, with 5.5%, Uruguay, with 5%, and Brazil, with 3%.
Economic and inflation stability is indicated as one of the main drivers in the economic growth. Also the increase in the prices of copper, produced in Chile, in coal, extracted in Colombia, oil from Venezuela, gas from Bolivia and the agricultural products, in Argentina and Brazil, should encourage this trend.
The region is also indicated by Cepal as one of the most favourable in the world to receive foreign investments. Last year, according to a report by the Commission, investments from abroad in these countries increased, in average, by 44% in relation to 2003.
Brazil
Brazil has strong trade relations with the other South American countries. Of all Brazilian exports last year, 16.2% had South America as their destination. The nations of the Arab League answered to 4.2%. And of the total imported by Brazil, 14.8% came from the South Americans and 6.6% from the Arabs.
Summit
The meeting for the heads of state starts on Tuesday, at the Blue Tree Hotel. Tomorrow, however, will be the opening of the Business Meeting, which will gather businessmen from the two regions up until Wednesday at the Ulysses Guimarães Conventions Centre. At the meeting there will be seminars and an investments fair, where the countries will present their potential. The Arab Brazilian Chamber of Commerce (CCAB) will have a stand at the place.
*Translated by Silvia Lindsey
