Brazil’s Lula urges closer Saudi economic ties

Agence France-Presse | 17 May 2009

Brazil’s Lula urges closer Saudi economic ties

RIYADH (AFP) - Brazilian President Luis Inacio Lula da Silva hailed his country’s growing relations with Saudi Arabia and the Middle East on Sunday as he pushed for more trade and investment in the region.

On the landmark first visit by a Brazilian leader to Saudi Arabia, Lula told Saudi and Brazilian businessmen stronger economic ties would leave both nations less vulnerable to the kind of turmoil now besetting leading global economies.

"I am here because we need to find new partners," he said at the Riyadh Chamber of Commerce. "We have to diversify our trade."

Two business tie-ups were signed on Sunday — the first on petrochemicals cooperation between Brazilian state oil giant Petrobras and the Saudi firm Modern Chemicals.

The second was a joint venture to produce human insulin for the Gulf region, which suffers a high rate of diabetes, between Brazilian biotech firm Biomm and the Saudi Gabas group.

Lula said trade between the Latin American and Middle East giants had shot up 450 percent in the past six years. Abdurahman al-Jeraisy, the chamber’s chairman, said it reached 13 billion dollars (9.6 billion euros) last year.

Two-way trade is heavily biased in Brazil’s favour, with Saudi Arabia an important market for Brazilian grain, poultry, beef and manufacturing equipment.

Lula singled out Riyadh’s six-year, 400-billion-dollar capital investment programme as an opportunity for Brazilian business.

"Saudi Arabia has a great infrastructure programme and certainly Brazil would like to participate," he said.

He added that his country could become a "strategic partner" for Saudi Arabia in its search for farm investment opportunities abroad to develop greater food security.

"We have high expectations to receive Saudi investment in agribusiness."

Lula was in Riyadh on the first stop of a tour that will also take him to China and Turkey.

On Saturday night he met Saudi King Abdullah and offered support for the Saudi-crafted Arab Peace Initiative.

They also discussed problems blocking a free trade agreement between the six-member Gulf Cooperation Council and Latin America’s Mercosur trade group.

The talks have been held up mainly by the Mercosur’s defence of high tariffs on imported petrochemicals, the GCC’s main export after oil and natural gas.

source: AFP