SCO and BRICS: SCO and BRICS: Brazil: Russia's strategic partner in Latin America
24 December 2020

Brazil is one of the Russia's most important foreign economic partners and the leading trade partner of the Russian Federation in Latin America. According to purchasing power parity, the total volume of the Russian and Brazilian economies exceeds $ 8 trillion. In total the territory of the both countries occupies the one-fifth of the entire land area on the planet with a population of more than 360 million people.

According to the RF Federal Customs Service, for the period of January – September 2020, the trade turnover between the two countries amounted to 2.81 billion US dollars, which is 17.2% less than in the same period in 2019. The Russia's exports to Brazil amounted to $ 1.31 billion (-27.6% by 2019). The main share of exports fell on chemical products-77.09%, mineral products-13.69%, metals and made of them products - 3.83%.

By 2019 the Russia's imports from Brazil decreased by 5.21 and amounted to $ 1.49. The majority of deliveries fell on food products and agricultural raw materials-72%, machinery and equipment-10.65%, chemical industry products-7.53%. Brazil occupied the 27th place in total Russian trade turnover as a result of last year’s outcome. The review on trade and economic cooperation between Russia and Brazil in 2019, prepared by experts of the World Trade Center Moscow, can be found here.

The Russia - Brazil Business Council, established under the Chamber of Commerce and Industry of the Russian Federation in 2004, has identified among its tasks the development of business contacts between entrepreneurs of the two countries, mutual promotion of businesses and attracting investment for the implementation of a number of promising projects. In 2019, the Council of Entrepreneurs, headed by «PhosAgro» CEO Andrey Guryev, and Brazilian Export and Investment Promotion Agency signed a Memorandum on mutual support for export activities and attracting investment. Currently, the volume of Russian investments in Brazil is estimated at about $ 1.5 billion.

The joint "Investment Partnership Program" envisages 117 projects in various sectors of the Brazilian economy, including oil and gas industry, electronics, extractive industries, ports and airports, railways and highways. The Russian companies also are ready to participate in privatization of the Brazilian state-owned enterprises, the total value of which is estimated at more than $ 500 billion. This, in particular, concerns the privatization of deep-water ports and the creation of hubs for the further promotion of products along the Amazon for export to Brazil and import to Russia.

In August 2020, the Russian Direct Investment Fund and the government of the Brazilian state of Parana signed a Memorandum of Understanding on the development, testing and production of COVID-19 vaccine. The research and release of the vaccine will be supervised by the Parana State Institute of Technology, Tecpar. RDIF calls the memorandum a «strategic agreement», under which the production of a vaccine is being created on the basis of pharmaceutical enterprises in the state of Parana for its further use in Brazil and other Latin American countries.

Also, the «Cromis» company, a joint venture between RDIF and the «HimRar» Group of companies, has also signed a licensing and cooperation agreement with the Brazilian «Axis BioTec» company for the supply the first Russian medicine «Avifavir» used in the treatment of COVID-19. By the end of 2020, the «Cromis» company will supply 100 thousand packages to Brazil, and in 2021, Brazil will purchase another 200 thousand packages.

Brazil and Russia also have great potential for cooperation in the field of energy. Today, «Rosneft» is implementing a major gas production project in the Solimoes River basin, in the Amazonia. The volume of investments in this important project is estimated at $ 1 billion. Another promising area is nuclear energy. Joint projects with «Rosatom» сorporation, in particular, on the creation of a floating low – power nuclear power plant, the completion of the unit of the Brazilian «Angra» nuclear power plant, are under development. The power unit construction works have been started in 1984, but, for a number of reasons, are not completed yet. Currently, a large contract is being implemented by «Rosatom» for supply of isotopes for medical purposes.

In addition, our countries actively cooperate in the field of space exploration. With the participation of «Roscosmos», four stations of the global navigation satellite system GLONASS were put into operation in Brazil: two in the central west (Brasilia), one in the north - east (Pernambuco) and another in the south, in the city of Santa Maria. An agreement was reached on the placement of two additional stations. In the city of Itajuba, Minas Gerais, an optoelectronic complex for detecting and measuring the parameters of the movement of space debris has been put into operation. In March 2019, the Russian Helicopters Holding Company opened a service center for the repair and maintenance of previously delivered Mi-35M helicopters in the Brazilian city of Belo Horizonte.

The agricultural sector is one of the main aspects of cooperation between two countries. Today, the Brazilian market is the largest consumer of mineral fertilizers in Latin America, and also one of the key ones for Russian exporters. One of the important things is the absence of customs restrictions on phosphorus-containing fertilizers. In 2019, the «PhosAgro» company exported more than 900 thousand tons of fertilizers to the country out of 1.6 million tons of total shipments to Latin America.

Brazil is actively involved in the process of global digitalization. Thus, the growth of the IT sector in the country increased in 2019 by 10.5% (the global average is 6.7%), reaching the eighth place in the world and the second after Argentina in Latin America. In the country, the most growing areas are those of information technology, where Russian companies have serious developments. Among them there are cloud technologies (the fourth place in terms of growth in 2019) and information security (the first place in 2019).

The Brazilian focus on these sectors developing is explained by the growing level of financial fraud, which accounted for 19% of all cybercrimes last year. The country also ranks first in the world in phishing attacks. Today, a large number of Russian companies operate on the Brazilian information security market.

Since 2006, «Kaspersky Lab» has started selling its products in this country through a distributor, and since 2012, it has opened a representative office, which later became responsible for all of Latin America. Another Russian company that supplies information security solutions to the Brazilian market is «SearchInform», whose main product is the DLP (Data Loss Prevention) system.

The Russian companies are also working in another promising area of the Brazilian IT market - the introduction of cloud technologies and digital infrastructure for business. Since 2014, the company «Softline» has been operating in the country. Another digital solution provider is «Voximplant» (a developer of a cloud platform for implementing voice, text, and video communications in applications and web interfaces).

In Brazil, Russian Promobot V. 4 robots work as consultants at retail sales points in Rio de Janeiro. A contract worth 280 thousand dollars was signed with the manufacturer «Promobot» and the Brazilian company «Águia Real» in 2019 during the international Web Summit conference in Lisbon, the capital of Portugal. In 2020, another 12 similar robots will be purchased, and later it is planned to open a service center in Rio de Janeiro.

Brazilian entrepreneurs actively participate in the Moscow food fairs "Prodexpo" and "World Food". More information about the exhibition "Prodexpo-2020" can be found in the materials of the WTC at the link. Many companies have been on the Russian market for the long time. Thus, the company" Schreiber Foods", the cheese manufacturer, has been exporting its products to Russia since April 2015, starting cooperation with the McDonald's, and more recently, acting as a distributor of HoReCa.

Food products imported from Brazil are also nuts and grains. The leading position is occupied by peanuts. In 2019, Brazil exported more than 80 thousand tons of peanuts to Russia, which is approximately 65% of the total export volume. «Francfort Trade» has been selling peanuts on the Russian market for ten years and has importers in five cities: Moscow, St. Petersburg, Novorossiysk, Krasnodar and Penza.

The leading supplier of coffee to Russia is the Brazilian company "Jorgensen Foods". "JBS" - the largest Brazilian company producing beef, pork and chicken-has been presented on the Russian market for 18 years. The company's main customers are meat processing factories, most of which are located in Moscow. In August 2019, Brazil opened market for Russian beef and derivative products. Currently, the supply of poultry meat from Russia is being discussed.

Cultural contacts are also developing between the two countries. A landmark joint project in this area was the first and only foreign School of the Bolshoi Theater, operating since 2000 in the city of Joinville. In September 2020, the II International «War Legacy Movie Festifal », dedicated to the 75th anniversary of the World War II, was held at the Victory Museum and the World Trade Center Moscow.

Within the framework of the festival, meetings were held with the cultural attaché and representatives of the Brazilian Embassy, as well as a presentation of the Brazilian documentary movie "Give them Hell!" about the actions of the fighter group of the Brazilian Air Force during World War II. (For more information see the WTC materials at the link).

In recent years, the Russian-Brazilian relations have been characterized by steady positive dynamics. A number of joint programs has been launched within the framework of BRICS. Despite the political changes in Brazil, the difficulties caused by the pandemic, the experts still see the both countries’ great potential for developing bilateral cooperation.

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