Brazilian President, Luiz Inácio Lula da Silva, will be leaving soon for the first visit to Saudi Arabia by a Brazilian head of state on May 16 and 17. The country is the largest economy in the Arab world. With king Abdullah Bin Abdulaziz Al Saud, in Riyadh, Lula is expected to discuss themes of global interest, like the frontier crisis, the reform of multilateral institutions like the United Nations (UN) and the conflict between Israel and Palestine.
According to the head of the Middle East II Department at the Brazilian Foreign Office (Itamaraty), Roberto Abdalla, there is interest of both governments in exchanging ideas about the crisis and the reformulation of international financial institutions, as both countries are part of the G-20, the group of 20 main economies on the globe, developed and emerging, which is at the heart of the economic growth multilateral decision making process.
According to Abdalla, both nations are also in favor of change in the UN Security Council, with the creation of permanent seats for developing nations. Today the only permanent members are the United States, Great Britain, France, Russia and China. Saudi Arabia, however, did not clearly pledge support to Brazil's claim to one of these possible new seats.
With regard to the question of Palestine, Brazil has, for some years, been seeking greater participation as a mediator and supporter to the Arab Peace Initiative, a Saudi proposal for solution to the conflict that was adopted at the Arab Summit in Beirut, Lebanon, in 2002, forecasting the existence of an Israeli state and a Palestinian state, with frontiers as they were before the Six Day War, in 1967.
All the South American countries endorsed this plan at the 2nd Summit of South American-Arab Countries (Aspa), which took place on March 31st, in Doha, Qatar.
Another theme to be discussed with Saudi authorities and with the secretary general of the Gulf Cooperation Council (GCC), Abdulrahman Al-Attiyah, is the unbarring of negotiations for a free trade agreement between the Arab bloc and the Mercosur, the economic bloc that includes Brazil, Argentina, Paraguay and Uruguay.
The process began in 2005, at the 1st Aspa Summit, but jammed on Brazilian petrochemical industry resistance, as the sector fears competition with companies in the Gulf. "The president should give signs for the unbarring of the agreement," said Abdalla. The GCC includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman.
At the 2nd Aspa Summit, in Doha, both parties disclosed a statement saying they were engaged in making the process advance faster and seeking "creative solutions" to the impasse. According to Abdalla, one of the possible solutions could be leaving aside the question of petrochemicals and advancing in areas of simpler negotiation, and returning to the theme at a later date. "The negotiations for the agreement cannot stop for four years due to one point of disagreement," he said.
In the bilateral area, both governments should sign at least six agreements, among them an expanded review of the general agreement for technical cooperation originally signed in 1976, and others are in the areas of political consultation, cooperation between diplomatic academies, higher education, cultural cooperation and sports. The number of agreements and themes of interest, however, is not yet closed and may be expanded.
Lula should travel in the company of a trade delegation that, in the sidelines of the official meetings, should participate in business roundtables with Saudi businessmen and visit local institutions like Sagia, the investment promotion agency, and the Council of Chambers of Commerce and Industry of Saudi Arabia, to promote a luncheon with the presence of the Brazilian president.
The president at the Arab Brazilian Chamber of Commerce, Salim Taufic Schahin, the Foreign Relations vice president at the organization, professor Helmi Nasr, and secretary general Michel Alaby should be included in the delegation.
Saudi Arabia is the main economic partner of Brazil in the Arab world. Brazilian exports to the country generated US$ 2.56 billion last year, an increase of 73.4% over 2007. The main items shipped were meats, ores, sugar, aircraft and partially manufactured iron and steel.
It is worth recalling that total imports of Saudi Arabia last year totaled US$ 191 billion and that the country is a great buyer of foods on the international market, as local production is not enough to supply the population of around 25 million inhabitants.
On the other lane, Brazilian imports of Saudi products totaled US$ 2.91 billion, growth of 70.4% over 2007. Oil and fuels answered to 93% of the basket, according to figures supplied by the Ministry of Development, Industry and Foreign Trade and compiled by the Arab Brazilian Chamber.
The Gross Domestic Product of Saudi Arabia was US$ 469 billion in 2008, according to estimates by the Economist Intelligence Unit (EIU), an economic information service provided by British magazine The Economist. The country is the main global producer and exporter of oil in the world and has the largest reserves of the commodity, evaluated at about 25% of world reserves.