Trade and investment flows could increase considerably, according to the speakers at the conference held by the Arab Chamber this Wednesday (5) in the city of São Paulo.
There is a considerable untapped potential in trade and investment flows between Brazil and the Arab countries, despite the strong improvements seen in the last few years and the current global economic downturn. This is one of the conclusions shared by the speakers in the Brazil-Arab Countries Economic Forum organized by the Arab Brazilian Chamber of Commerce this Wednesday (5) at the Tivoli Mofarrej hotel in São Paulo.
“Besides being a 380 million people consumer market, the Arab world is the best gateway to Africa, Asia and Mediterranean Europe,” said the Arab Chamber’s president, Marcelo Sallum, at the event’s opening. “Brazil has the means to be the region’s main partner and a platform to reach the other South American countries,” he added.

To him, Brazilians and Arabs need to take advantage of their economies’ complementarities, in addition to diversifying trade. “We could and should take advantage of these complementarities,” he underscored.

Sallum mentioned that trade between Brazil and the Arab countries totaled USD 19.2 billion in 2015 and that its total increased by more than 200% in fifteen years. “This improvement didn’t come by chance, it was the result of a lot of work,” said the executive, highlighting the many relationship, intelligence and trade promotion actions implemented by the Arab Chamber. “We have learned that trade relations need to be continuous and in both directions,” he said.
For the dean of the Council of Arab Ambassadors in Brazil, Ibrahim Alzeben, the act of hosting the forum reveals “Brazil’s will to build cooperation with the Arab world.” “There are means to improve this cooperation,” said the diplomat, who is also Palestine’s ambassador in Brazil.

Alzeben said that the huge community of Arab descendents in Brazil could help in this regard. “We hope that the Arab community will take part in the building of bridges between Brazil and the Arab world,” he said.

He said, however, that Brazilian business owners can’t look at the Arab regions simply as a readily available source of capital. “We don’t have a warehouse of cash that we don’t know how to use.” he declared. According to the diplomat, Arab business owners pay attention to detail and look for well-structured projects that can offer benefits to both sides.

Scenario

After the event’s opening ceremony, ambassador and Arab Chamber International Relations vice president Osmar Chohfi presented a panel on the global economy featuring speakers Egypt’s deputy minister of Investment, Mona Ahmed Zobaa, and the chief economist of investment firm XP Investimentos, Zeina Latif.

Chohfi presented an overview of the global scenario, mentioning recent studies by the International Monetary Fund (IMF), the World Trade Organization (WTO) and the World Bank. For instance, he said that the global economy should grow less in 2016 than previously expected and that since 2012 global trade has grown at half the annual average from previous years, but that in 2017 the global Gross Domestic Product (GDP) is expected to pick up, mostly due to emerging and developing countries.
Regarding Brazil, Latif said that there’s improvement in consumer and business confidence indexes, but that this is more a reflection of future expectations than an actual recovery of the economy, which is in recession. “We don’t see signs of a recovery yet,” she said.

However, she has a positive outlook regarding the chance of Congress voting and approving economic measures submitted by the Executive branch. For the economist, the absolute priority is the fiscal adjustment, especially the proposal of a constitutional amendment that sets a cap for government spending and the Social Security reform.

In turn, the Egyptian deputy minister discussed investment opportunities in her country in logistics, industry, agriculture, and energy, including renewable sources, especially in the areas around the Suez Canal. She also said that “huge” natural gas discoveries were made in Egyptian territorial waters in the Mediterranean and the Western Desert, which could “solve many energy problems” for Egypt.

Logistics

Next, Arab Chamber CEO Michel Alaby moderated a debate on logistics and transportation featuring Dener Souza, the cargo manager of Emirates Airline’s cargo arm Emirates SkyCargo, and the Trade & Marketing director with container and vessel company Maersk, João Momesso.

Earlier in the day, Alaby said an Argentinian diplomat told him that the free-trade agreement between the Mercosur and Egypt might be ratified by the end of November by the Parliament of Argentina – the only country in the South American bloc that’s yet to ratify the deal signed in 2010.

Regarding transportation, the CEO stressed that solutions must be found to cut shipping time and freight costs; the trip between Brazil and the Arab world takes an average of 49.5 days.

Momesso said his company is working towards that, because weak global trade growth led all of the world’s 20 biggest vessel operators to report losses in the past quarter. In order to enable nonstop routes and cheaper fees, however, the volume of goods shipped must increase.
“Brazil is a key source of food to the Arab world, and it probably will remain so,” Momesso argued. In order to eliminate or reduce the number of transshipments, however, the vessels must also be full in the return trip, which is not the case right now. The amount of containers shipped from Brazil to the Arab world, for instance, is far higher than the other way around.

Since the countries in Middle East and North Africa are fertilizer producers, one solution would be to fill the containers up with those for the trip back, which is something Maersk does in routes to Russia, and has tested in routes to Morocco.

Souza, in turn, revealed that Emirates plans to double the amount of cargo it shipped from Brazil in 2014, 2.3 million tons, by 2020. He said the company flies lots of hatching eggs, fresh flowers, fruit, auto parts and pharmaceuticals.

“The simple fact of having a nonstop route has led to an increase in trade,” Souza remarked. “In the past, there used to be a demand, but not the service,” he added.

Alaby also explained the online process created by the Arab Chamber, which has reduced processing times and the cost of issuance of certificates of origin. The system should be up and running this year for exports from Brazil to Egypt. In 2017, it will be implemented in sales to Saudi Arabia and Jordan.
Source
http://www2.anba.com.br/noticia/21872861/business-opportunities/forum-reveals-business-potential-between-brazilians-and-arabs/