Saudi Arabia and Brazil Forge Strong Economic Partnership, Eye Billions in Trade and Investments

Saudi Arabia and Brazil are looking to strengthen their economic ties and deepen trade and investment between the two countries. The investment minister of Saudi Arabia, Khalid al-Falih, expressed his optimism about the potential for strategic partnership between the two nations at the Brazil-Saudi Arabia investment forum held in Sao Paulo.

He highlighted the similarities between the two countries, such as their membership in the G20 and their roles as energy producers, and emphasized the possibility of becoming top five investors in each other's economies. Saudi Arabia, flush with cash after a record $161 billion profit from state oil giant Aramco, has already invested billions in Brazil's mining and meatpacking sectors.

These investments are in line with Saudi Arabia's "Vision 2030" reform program, which aims to diversify the country's economy and reduce its reliance on oil revenues. The investments also contribute to Saudi Arabia's broader strategy of enhancing its global linkages.

Brazil sees these investments as an opportunity to attract Saudi investments in industry and infrastructure, as well as secure supplies of Saudi fertilizers for agricultural production. There has been no significant backlash from rights groups or progressive politicians in Brazil regarding Saudi Arabia's human rights record, which is often a subject of controversy.

Recent deals between the two countries include Saudi firm Manara Minerals' $3.4 billion acquisition of a 10 percent stake in Brazil mining colossus Vale's base metals sector, and Brazilian meatpacking giant BRF's joint venture with PIF-backed Halal Products Development Company.

The deepening ties between Saudi Arabia and Brazil reflect changes in the global economic landscape, as well as geopolitical shifts following Russia's war in Ukraine and growing tensions between the US and China. While some analysts remain skeptical about the potential of the Brazil-Saudi relationship, business pragmatism is likely to guide its growth.

However, there have been controversies surrounding the relationship. Former Brazilian President Jair Bolsonaro has been involved in a scandal involving undeclared diamond jewelry and luxury watches gifted by Saudi Arabia while he was in office, potentially leading to embezzlement charges.

Overall, the Saudi-Brazil economic partnership is expected to focus on trade in food and resources, as well as attracting investments, driven by business pragmatism rather than ideology.