Brazil and Emirates Talk Exports

United Arab Emirates Opportunities for exports of services from Brazil to the United Arab Emirates were among the main topics discussed this Monday, May 12, in the "Brazil-United Arab Emirates Bilateral Foreign Trade and Investment Seminar", promoted at the offices of National Trade Confederation (CNC), in Rio de Janeiro.

The event finished with the announcement, by the federal government, of the new Production Development Policy, which includes the concession of tax benefits and credit for the export of services.

"With the inclusion of the service complex in the Industrial Policy, our exports will certainly be boosted," stated the Trade and Service secretary at the Ministry of Development, Industry and Foreign Trade, Edson Lupatini. The idea, according to him, is to expand the number of services made into export goods for the concession of benefits.

With this, according to Lupatini, several fields should prepare themselves to receive benefits that are currently only granted to the trade of products, including credit at lower interest rates and tax breaks. Today, in the area of services, only exports of software and services provided by professionals in the technical area have these benefits.

The new industrial policy has already expanded incentives to the fields of the transfer of funds for the promotion of services abroad, which is now free of income tax, and logistics services.

Further on, according to Lupatini, the government wants to include other sectors in this regime, like tourism, telecommunications, trade, engineering and architecture, among others. According to him, the government wants to expand service exports from the US$ 22.5 billion of 2007 to US$ 39.5 billion in 2010.

"This target is possible. If we consider all sectors, this is even conservative," he said. "And we have much to send there (to the Emirates) with very high added value in the case of technology," he added.

The possibility is in accordance with one of the country's current interests in the macroeconomical area, which is to maintain the foreign deficit under control. The president at the Logistics Chamber at the Brazilian Foreign Trade Association (AEB), Jovelino Gomes Pires, recalled that, although Brazilian exports of goods are growing below imports, the country still has a reasonable surplus, and the deficit in external accounts takes place mainly due to the service and income accounts.

He pointed out that the United Arab Emirates has managed to make the revenues of a mineral extraction product, oil, into an enormous service sector. That is, the country invested, and continues investing, petrodollars in the development of sectors like tourism, trade and the financial sector.

As an example, the director of the Dubai Department of Tourism and Commerce Marketing, Hamad Mohamad Bin Mijren, pointed out that tourism now represents 33% of the Gross Domestic Product of the emirate, while oil represents just 3%.

He presented a panorama of the works that are currently under development in Dubai, like the expansion of the local airport, the construction of the new Jebel Ali airport, as well as a series of homes, commercial buildings, hotels and resorts.

Brazil, in Pires' opinion, could take the Arab example and export several services, like medical treatment, transportation, distance learning, decoration and engineering.

In this respect, the institutional relations manager at construction company Odebrecht, Julio Brant, pointed out the company's experience in the Emirates and in other Arab countries. The company started operating in Abu Dhabi in 2003, where it is currently actively participating in the works for the expansion of the international airport; then, in 2004, the company built two port terminals in Djibouti and, finally, last year the organization entered the Libyan market.

"We are currently the largest Brazilian exporter of services," said Brant. Odebrecht has already developed, according to him, around 2,000 works in over 30 countries.

Initially the company planned to participate in the reconstruction process in Iraq, but, according to Brant, the continued violence made the company put this plan aside. Engineer João José Vasconcellos, a company employee, was kidnapped and murdered in Iraq. The natural alternative, then, was to turn his efforts to the Emirates, who were already living a boom in civil construction.

The reasons that took the company to the country, according to him, were political and social stability, the good receptiveness to foreign companies, peaceful coexistence between cultures and the local government's determination to modernize infrastructure and institutional stability, essential characteristics for the development of long-term projects.

The contract in Djibouti, in turn, was reached through Dubai Ports, a company in the Emirates that administers port terminals in several countries. "Apart from the execution of works in the Emirates, this shows that we may work in partnership with companies from the Emirates in other countries," stated Brant.

Lupatini recalled that exports of services, especially in the area of engineering, bring in their wake other business, like the sale of machinery and building material.

"The service sector should deserve special attention not just in the Emirates, but in the Arab world as a whole," declared the secretary general at the Arab Brazilian Chamber of Commerce, Michel Alaby, who mediated the panels of the seminar.

The seminar was organized by the Federation of Chambers of Foreign Trade and also counted on the presence of the organization's president, João Augusto de Souza Lima, of business attaché at the embassy of the Emirates, Ahmad Mohamed Bassis Al Taneigi, of the Production Development secretary at the Ministry of Development, Armando Meziat, and of diplomat Carlos Leopoldo de Oliveira, of the Middle East II Division at the Brazilian Foreign Office, among others.

Anba – www.anba.com.br

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