The UAE's goal is to invest more in the South American giant, not only in raw materials but also in infrastructure projects such as the modernization of favelas.
In the future, the UAE aims to become more involved in Brazil in areas such as raw materials and infrastructure. The total investment is expected to reach approximately €16 billion (US$17.84 billion), which will be spent on projects such as pastureland reclamation, industrial development, agricultural exports, and infrastructure and defense projects. The investor is the sovereign wealth fund Abu Dhabi Investment Group (ADIG).
The idea of modernizing the low-income metropolitan area of Baixada Fluminense, on the outskirts of Rio de Janeiro, received particular media attention. Around three million people live there in slums, often in precarious conditions and with poor transportation connections to the city center.
Negotiations between investors, the Brazilian federal government, and the Rio de Janeiro state government focused on creating new housing options in the favelas and better connecting them to the city center via subways and high-speed trains, Zayed bin Aweidha, ADIG's director general, told O Estado newspaper.
The reasons for investing are purely economic: in the long term, selling metro tickets to millions of passengers, or a high-speed train, could also generate revenue.
Expanding relationships
Economist Felipe Rodrigues of the Fundação Getulio Vargas (FGV) business school told DW in an interview that "around $2.5 billion has recently been invested in the Brazilian economy," primarily in the areas of research and energy transition.
Relations between Arab countries and Brazil, a country considered key to the practical implementation of the energy transition, have evolved. According to Rodrigues, Brazil has managed to retain its strategic partners and gain new ones, in addition to the commitment to the free trade agreement between the EU and Mercosur and economic relations with India.
Infrastructure and energy projects
At the end of last year, Brazil and the United Arab Emirates signed two declarations of intent at the G20 summit in Rio de Janeiro, establishing a common investment base.
According to the Brazilian government, the funds will be used for infrastructure and energy projects. Mohamad Mourad, secretary general of the Arab-Brazilian Chamber of Commerce, said in an interview with DW that key sectors of the economy, including infrastructure, port and airport concessions, renewable energy, agribusiness, real estate, defense, and other areas, offer good investment opportunities for the Abu Dhabi fund.
How realistic are the ads?
In particular, the plan to modernize favelas raises hope, but the 2016 Olympic Games and the 2014 World Cup also gave people dreams that slums would benefit from infrastructure connections, yet that hasn't happened.
Furthermore, many still remember the corruption scandal surrounding the Odebrecht construction company, in which millions of dollars in bribes were paid in exchange for infrastructure projects, which has damaged confidence in Brazilian politics.
The case has yet to be resolved by the Brazilian courts, and the current government of President Lula da Silva shows little interest in it.
Residents of Baixada Fluminense, on the outskirts of Rio de Janeiro, have often hoped for improvements in infrastructure, but so far they have only experienced disappointment.
Bureaucratic and political obstacles
For the declarations of intent between the United Arab Emirates and Brazil to become a reality, bureaucratic and political ambiguities must be eliminated, Rodrigues warns. Furthermore, Brazil needs to think long-term: "Projects of this magnitude require certainty to move beyond the announcement stage. We're talking about projects with a duration of 15 to 20 years, at least ten years."
In January, both sides signed a declaration on cooperation in "mineral exploration, extraction, processing, refining, and marketing projects and the transfer of Arab technology."
"The agreement promotes innovation and competitiveness in the raw materials sector, especially for small and medium-sized enterprises, thus paving the way for a more sustainable and globally integrated future," said Minister of Mines and Energy Alexandre Silveira.
At least on paper, there are more signs of rapprochement. Now it's up to the partners to deliver on their promises.
