Lula's trip to London resulted in a R$500 million contribution to the Amazon Fund

Posted on 06/05/2023 at 03:55

(Credit: Ken Cheung/Pool/AFP)

LONDON – If in Brazil President Luiz Inácio Lula da Silva is having difficulty implementing the projects that interest the government in Congress and sees the economy moving at a slow pace, abroad he is making progress in the process of reintegrating the country into international politics. Yesterday, he achieved one of his biggest victories since he began traveling the world: the Prime Minister of the United Kingdom, Rishi Sunak, announced a contribution of 80 million pounds sterling, or about 500 million Brazilian reals, to the Amazon Fund. From the British leader’s official residence, 10 Downing Street, Lula went to a closed-door meeting with King Charles III, who will be crowned today. Only a little more than a dozen heads of state were present.

Brazil and the UK have been far apart. There was huge resistance from the British government and royal families to the previous administration, led by Jair Bolsonaro, who was seen as an environmentalist. Sunak insisted that the two countries were now on the same page, whether to expand trade, currently worth just $6.5 billion a year, or to work together on the serious problems posed by climate change.

The meeting with Sunak lasted 45 minutes, during which the British Prime Minister announced investment in the Amazon Fund. Germany, Norway and the United States are already part of the group of financiers. The fund was suspended under the previous government, due to lack of commitment to environmental issues.

Lula told Sunak that Brazil had large reserves, was participating in climate meetings and had pledged to stop deforestation in the Amazon by 2030. “I have spoken to all the rich countries and asked them to stick to the agreements signed in the poorer versions of the COP,” he said, noting that countries needed help to preserve their forests and the climate that society needs (to live).

“I am delighted to announce on this occasion that we will be investing in the Amazon Fund, and all this is thanks to your work, your leadership and your fight (for the environment),” the British leader said. He expressed his pleasure in welcoming Lula to his official residence, and stressed that the competition between the two countries is limited to football only, when England and Brazil play on the field. He pointed out that “our conversation will be better than the competition in England’s matches at the World Cup. In addition to football, we have a lot in common. Economic relations, trade flows, climate change.”

change plans

The Brazilian government greeted the prime minister’s announcement with celebration. Lula had already given up on travelling to London for the coronation of King Charles III. But the prospect of a bilateral meeting with Sunak made him change his plans.

In the field of trade, the President and the Prime Minister said they needed to improve relations between the two countries. Adding imports and exports, the flow reaches US$6.5 billion per year. According to the Brazilian government, British investment flows to Brazil remain high, and are aimed primarily at the oil and gas sector. The total investment balance is concentrated in the extractive, financial and transport sectors. According to the Central Bank, in 2021, the United Kingdom invested US$22.6 billion in Brazil according to the direct investor criterion (sixth largest) and US$36 billion according to the final observer criterion (fourth largest).

The UK is second among the 17 countries that have applied for the Investment Partnership Programme, with R$59 billion (US$11 billion), behind only China, in 10th place, with R$2.2 billion (around US$440 million). The UK is also the 10th largest recipient of Brazilian direct investment, with its shares in 2020 worth US$5.1 billion.

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