Brazil Reasoning to Go to Iran: Let’s Make a Deal Before the Chinese Do It

Miguel Jorge with president Ahmadinejad Brazil’s minister of Development, Industry and Foreign Trade, Miguel Jorge, just went to Iran with 86 Brazilian businesspeople and he has told them that what they have to do is negotiate deals and do business.

 

The minister has prodded them with the Chinese menace: “If you people don’t sell our stuff to them the Chinese will sell their stuff to them. The Chinese are coming. The Chinese are all over the place,” is more or less what he is reported to have said to the group.

The group of Brazilians represent, among others, food, automobile, furniture, home appliance and medical supplies segments of the economy, along with contractors who build infrastructure.

The commercial road show is taking place a month before a state visit by Luiz Inácio Lula da Silva who has become very popular in certain circles in Tehran because of his support for the Iranian nuclear program – as long as it is for peaceful purposes. Lula is very much in the news in Iran.

According to the executive secretary of the ministry, Ivan Ramalho, “Iran sees Brazil as a gate into the rest of Latin America. And our objective is to wipe the slate clean in order to do business.”

One problem doing business with Iran is that there is no credit. Big banks do not operate in the country. In fact, triangulation is the name of the game. That means that financing is done in third countries, outside Iran.

And that adds to delivery costs and means delays, along with higher prices of goods to the final consumer and lower profits. But the latest news from Brazil is that official state-run banks are studying the possibility of opening credit lines directly to Iran for Brazilian exporters and importers.

Back in Tehran, speaking to the businesspeople in his entourage (there are 15 women in the group) minister Miguel Jorge sums it up this way: “Brush the difficulties aside and close the deal.” In other words, says Jorge, as there is no immediate solution in sight, skirt the problems and just do business.

In fact, the Brazilian commercial mission has transformed the biggest conference room in Tehran’s Parnasian Esteghal International Hotel into a gigantic bazaar. In the Brazilian bazaar, the Brazilian women in the group dress Iranian style: headscarves and clothes that cover all of the body.

The Brazilians also follow local custom in the way they interact with Iranians (which is quite different from the way they do it in Brazil): do not look people of the opposite sex in the eye or touch them. Men, in fact, are not even supposed to look at women in public.

At the moment, Brazil is the biggest exporter to Iran of beef and chicken (whole chicken). But the Iranians are interested in soybean, sorghum, sugar cane, soy oil and ethanol.

There are also many opportunities for construction companies in Iran. In 2009, Brazilian imports from Iran rose 28%, to US$ 19 million. Exports were US$ 1.2 billion. Commerce with Iran is less than 1% of Brazil’s world trade.

ABr

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