By TBY | Qatar | Mar 24, 2015
Qatar has quickly become an active international trade player, with the obvious catalyst behind the evolution of the oft-overlooked peninsula in the Gulf into a now ambitious and globally recognized […]
Qatar has quickly become an active international trade player, with the obvious catalyst behind the evolution of the oft-overlooked peninsula in the Gulf into a now ambitious and globally recognized nation being its abundant gas reserves. In the early stages of Qatar’s economic development, Asia, most notably South Korea and Japan, became its main trading partner as long-term gas contracts were signed. As of today, the relationship with these countries remains paramount to Qatar’s foreign policy and international trade strategy. However, as the international status of Qatar has risen and its downstream gas infrastructure and capacity expanded, so too has its ambition to reach out to other regions in the world. A prime example is Latin America, which has become a continent of great interest to Qatar.
This recently increased attention on the region is best illustrated by the 2013 visit of the then Emir HH Sheikh Hamad Bin Khalifa Al Thani to three Latin American states, namely Peru, Colombia, and Ecuador. The series of official state visits was the result of Qatar opening diplomatic missions in the area over previous years. A Peruvian government official then stated that “the visit to Peru and the other two Latin American countries of Qatar’s Emir is the beginning of a strengthening of existing bilateral ties between this country and the entire Latin American region.”
Through its 12 embassies on the continent and a string of trade missions in recent years, Qatar is undoubtedly among the most actively involved Arab nations in Latin America. Although Qatar and the larger South American countries have maintained diplomatic relations since its independence in 1971, as of 2011 the bilateral infrastructure was too critically underdeveloped to accommodate the rapidly increasing volumes of trade. Over recent years, important work has been done in order to establish various bilateral legal frameworks that support a high number of transactions and investments across the ocean. Despite the change of Emir and cabinet in the summer of 2013, Qatar has maintained its interest in Latin America, and vice-versa, as official state visits between the two are at their most frequent.
Now, several years down the line, one can see the first results of Qatar’s efforts at strengthening ties with Latin America. A clear case in point is the fact that bilateral trade between Qatar and Brazil increased by 315% between 2009 and 2013 to a total of $915 million. Then, in 2014, Qatar Petroleum acquired a 23% share, worth $1 billion, in Brazil’s Parque das Conchas offshore project, proving that circumstances for investment are favorable. Another interesting case is the development of trade and investment between Qatar and Argentina. The improvement in trade regulations with this more economically unstable country has resulted in substantial growth in economic activity. Due to increased Qatari interest in Argentina’s agriculture and infrastructure sector, and Argentina’s demand for gas, bilateral trade in 2013 grew by 150% compared to 2012 to a total just short of $1 billion. Expectations are that investments will grow as Argentina seeks to acquire Qatari support to build new LNG terminals.
In addition to the strong growth in trade with Brazil and Argentina, recent developments in bilateral relations between Qatar and smaller Latin American nations support the idea of a clear pattern in this reinvigorated relationship. Through links with Latin America, Qatar aims to secure its food supply by investing heavily in local agriculture while simultaneously seeing opportunities to secure LNG contracts on the continent. In the near future, one can expect more activity as Qatar is already exploring the idea of increasing investment in mining activities on the continent to support its industrial sector, which is a strong pillar of the national objective of economic diversification.
When evaluating recent global diplomatic efforts in Qatar, one can conclude that Latin America has undoubtedly been a focal point. The impact of Qatar’s activities has been massive as the small Gulf nation pursues investments and trade deals in practically every country on the continent and trade volumes have amplified. This is a clear example that illustrates the changing world order in which South-South relations have become increasingly successful as economies become complimentary to each other and bilateral trade regulations modernize. In this specific case, all indicators suggest that the economic relationship between Qatar and Latin America will only grow further.