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Jun 12, 2024, 2:53pm EDT
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Semafor Signals

Saudi officials in Brazil for talks as global powers vie for influence in South America

Insights from Bloomberg, Americas Quarterly, Al Jazeera, and Atlantic Council

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Reuters/Adriano Machado
Brazil’s President Luiz Inacio Lula da Silva
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The News

Saudi officials meet with Brazilian President Luiz Inácio Lula da Silva this week at a summit aimed at building closer ties between the two countries.

Brazil and Saudi Arabia have a long-standing relationship, and exchanged trade worth $7 billion in 2023. A Saudi non-profit estimates that the market will grow to $10 billion by 2030, Bloomberg reported, but the oil-rich Middle Eastern kingdom’s ambitions in the region are not limited to Brazil.

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SIGNALS

Semafor Signals: Global insights on today's biggest stories.

Brazil is just the start for Riyadh

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Source:  
Americas Quarterly

The summit in Brazil is a first step for the Saudis’ push into Latin America as a whole, Americas Quarterly noted. The kingdom wants to diversify its economy away from oil under its ambitious Vision 2030 plan, including by setting up new trade partnerships and global initiatives. To fund some of these projects, it recently sold shares of its national oil company, Aramco. Strengthening ties with Latin America is part of that diversification strategy. The kingdom is considering opening an embassy in Colombia and striking a deal to build or assemble Brazilian airliners in Saudi Arabia. Aramco also recently acquired a Chilean fuel retailer. “They want all of Latin America close to them,” an analyst told Americas Quarterly.

Brazil wants investment in infrastructure and industry

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Sources:  
Bloomberg, Al Jazeera

Brazil has a lot to gain from deepening ties with the Saudis, and it hopes to attract more investment in industry and infrastructure, as well as get its hands on fertilizer from the Gulf for agriculture, Al Jazeera reported. Other potential areas of collaboration include food security, climate, and energy — talks with Saudi investors to launch a $600 million fund to invest in the sector are reportedly underway, Bloomberg reported — and defense cooperation. So far, Riyadh is pouring a lot more money into Brazil than the other way around, Bloomberg added, about $1 billion versus $300 million in 2022. It may take a few years before Brazil starts investing more in the kingdom, an analyst said.

China and Russia are also building clout in Latin America to challenge the US

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Source:  
Atlantic Council

The United States, Russia, and China have ramped up their efforts to bolster their own relations across South America, but their approach and goals vary, the Atlantic Council noted. China and Russia are both trying to challenge the US’ dominance and create a more “multipolar” world. China is taking a more comprehensive approach that’s focused on economic investment, particularly through its Belt and Road Initiative, while Russia has so far prioritized military cooperation and security pacts with autocratic regimes like those of Cuba, Nicaragua, and Venezuela — which are all major customers for Russian military equipment sales, too.

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