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In an international context marked by polarization and geopolitical fragmentation, Latin America and the Caribbean, together with the Gulf States, gave a very promising sign of collaboration with potential to reinforce their positioning in the global economic map. During the last United Nations Development Financing Summit held in Seville, they announced the creation of an Investment Committee between CAF -development of Latin America and the Caribbean -, the Arab Coordination Group (ACG) and the International Development Fund of the Organization of Petroleum Exporting Countries (OPEC), thus opening outstanding opportunities for sustainable progress, the energy transition and digital transition of the region. This alliance not only responds to shared economic needs, but has deep geopolitical implications.
The relationship between Latin America and the Gulf states has traditionally focused on the exchange of raw materials. However, transformation in global dynamics and the need to diversify growth sources have driven both blocks to seek deeper and more strategic synergies. Latin America is an agricultural and energy power, with vast reserves of natural resources and a key role in food security and world energy transition. The Gulf states, meanwhile, have advanced in the diversification of their economies through ambitious national strategies, prioritizing sustainability, digitalization and renewable energies – such as the Saudi Vision 2030, Emiratí We Are Uae 2031, the Catarí Vision 2030 and the Kuwait Vision 2035-. The ability to complement is evident, and take advantage of it would allow to lay the foundations for a collaboration that transcends traditional trade and enters strategic sectors such as infrastructure, technology, clean energy and food safety.
In fact, this was shown by the recent investigation Strategic sectors: agriculture, energy, logistics and technology. Latin America is consolidating as a reliable food supplier for Gulf countries, which depend on imports due to their adverse climatic conditions. Only in 2022, Arab purchases of Latin American agricultural products reached 9.5 billion dollars, led by Brazil and Argentina, which concentrate 80% of this trade with exports of meat, soy and cereals. Gulf countries, meanwhile, export essential fertilizers for Latin American agricultural productivity, generating a symbiotic relationship in their value chains.
It is true that oil and gas trade remains fundamental, but the energy transition is transforming priorities. Saudi Arabia and United Arab Emirates, through their sovereign funds, have begun to invest in renewable energy projects in Latin America, highlighting initiatives- still incipient- green hydrogen production in Brazil and investment in energy infrastructure. In addition, the Public Investment Fund for Saudi Arabia (PIF) plans to invest 15,000 million dollars in the clean energy sector in Brazil, while companies such as Qatar Petroleum and Saudi Aramco have carried out substantial financing in the region.
Logistics efficiency is key to release the potential of this association. Investments in ports, storage centers and transport systems by the sovereign funds of the Gulf have improved connectivity and reduced traffic times in the region, and are configured as a worldwide example. Therefore, the resources of companies such as the Emiratí DP World – more than 5.5 billion dollars in logistics and port projects in Brazil, Peru, Ecuador and the Dominican Republic – are very good news so that Latin America and the Caribbean begin to overcome their traditional integration challenges.
Finally, the digital economy emerges as an area of shared interest. Gulf companies such as G42, from Abu Dhabi, are demonstrating the transformative potential of artificial intelligence in key sectors such as health and logistics. The exchange of technology and talent can accelerate the transition from Latin America to more diversified and resistant economies, if these technological developments are implemented in industrial areas where the region has global champions such as agriculture, finance, energy and mobility. In particular, the establishment in Latin America and the Caribbean of a Green Valley of green data centers for the development of the IA industrial applications is an area that this alliance can address.
Catalyst for a new stage
The creation of the Investment Committee opens a unique opportunity to channel financial and technological resources and strategically structure high -impact projects in Latin America and the Caribbean. This was the result of a work table held within the framework of the IV Development Financing Conference in Seville, where regional leaders and representatives of Arab funds agreed on the urgency of strengthening South-South cooperation against global challenges.
The Committee was born with the objective of identifying and prioritizing strategic projects in infrastructure, energy transition, food security and digitalization, as well as facilitating the exchange of technology and knowledge, accelerating the transfer of capacities and the formation of local talent. To do this, the design of innovative financial instruments adapted to the needs of the region will be key. From green bonds to finance sustainable projects and energy transition, through public-private mixed bonds that mobilize private and public capital towards strategic sectors, to debt exits by nature and other formulas that reduce the cost of financing and strengthen local capacities.
In particular, an area that we see little explored is that of digital development bonds, which, emulating the success of social and environmental bonds, could leverage incentives and public investments with resources from large technology companies to close the gaps in connectivity, cybersecurity, artificial intelligence or Greentech.
The geopolitical moment is now. The collaboration between Latin America and the Gulf States not only has a direct economic impact, but also strengthens the geopolitical position of both regions, at a time when bilateral or, directly, the law of the strongest seems to prevail. By leading sectors such as renewable energies and digitalization, they can position themselves as relevant actors in the international system. In addition, South-South cooperation promoted by the Committee reinforces the economic and financial resilience of both blocks, allowing them to reduce their dependence on the great powers and consolidate their strategic autonomy.
In an increasingly interconnected and challenging world, the alliance between Latin America and the Gulf States has the potential to convert both regions into sources of global solutions, economic growth, resilience and global leadership. The time to act is now.
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