São Paulo – The Arab Brazilian Chamber of Commerce signed this Tuesday (10) a memorandum of understanding with Brazilian Defense and Security Material Industries Association (Abimde) to reinforce the partnership in promoting Brazilian defense and security products in the Arab market.
The event featured Abimde president Roberto Alves Gallo Filho (pictured above, on the right), and Arab Chamber president Rubens Hannun (pictured above, on the left), during a seminar to look into how to take advantage of the doors that have been opened by the president Jair Bolsonaro’s trip to the United Arab Emirates, Qatar, and Saudi Arabia in late October. The event took place at the Arab Chamber headquarters in São Paulo.
The Arab Chamber and Abimde already have an ongoing partnership and the agreement should boost the tandem work according to Hannun. “A memorandum will bring a larger exchange of information, a tandem plan for missions,” said Arab Chamber president. According to him, one of the goals of the agreement is following up the relationship of the security and defense industry in the Arab market after Bolsonaro’s visit.
President Jair Bolsonaro toured three Arab countries leading a corporate mission with a heavy presence of defense companies and featuring the Defense Ministry, which also worked on planning activities in the countries. In the UAE, they signed a memorandum of understanding allowing the operation of private funds from a country in the other’s defense industry.
A defense agreement is also set to be signed with Qatar by next April, said divisional general and Defense Ministry Trade Promotion Department director Luis Antônio Duizit Brito during the seminar. Saudi Arabia is studying the possibility of signing a similar memorandum with Brazil.
“It’s a recognition by both governments that private funds will operate in the Brazilian defense market,” Brito told ANBA, pointing out that the instrument allows for Brazilian funds to operate in the other country’s defense industry too. “For defense industry investment, the Brazilian state must be aware that the fund will enter into share holdings, acquisitions or dealings with the defense industrial base.”
Arab Chamber Institutional Relations manager Fernanda Baltazar showed during the seminar how the Brazilian defense and security industry has grown in the Arab market. According to her, the Arab countries have gone from the seventh destination of the industry’s product from January to November last year to the third destination year-to-date. Its revenue reached USD 148.8 million from exports last year and USD 182.78 million year-to-date, up 26.2%.
Baltazar presented factors that weighed on this increase, such as a significant growth in purchases from Mauritania driven by radar and aircraft acquisitions, as well as a strong growth in exports to the UAE and Qatar.
The manager said that Bolsonaro’s trip opened up markets and urged the companies to think on how to follow up the relations with the Arab countries. She said that the Arab Chamber and Abimde are interested in doing so bringing up several complementing industries together in the foreign market, not only defense. “It’s worthy saying that we’re talking about a narrow trade flow of a few products,” Baltazar talked about imports to Arabs, which has grown but is still too concentrated.
Arab Chamber secretary-general Tamer Mansour said that the presidential trip showed its importance for the commerce. “The trip showed how a governmental umbrella can be an assurance for us to enter into a new era for our relationship with the Arab countries,” said Mansour. He presented market possibilities for the defense industry in the Arab countries, which need to reinforce security in their borders.
Abimde president Gallo said that for the last ten years three Arab countries – Saudi Arabia, the UAE, and Qatar – have been among the ten-top end-markets of the industry abroad. He presented the Arab market as a potential for the defense and security industry due to their immediate need to buy military capacity, local projects for diversifying their industry, and large investment funds.
Gallo said that exports are extremely important for the Brazilian defense industry and that officialdom is relevant for this industry in the Arab world, and this should be observed by the companies. “Since many countries are monarchies or monarchy-like, the state apparatus at the beginning or during the relationship carries more weight than the corporate presence. The president’s visit has certainly opened doors that would remain closed otherwise,” he said.
Defense Ministry director Duizit defended the need for a long-term relationship with the Arab defense market. “We want to do business with the Arab countries for 30, 40, 50 years,” he said. The general talked about the industry’s results from the presidential mission to the Arab countries and, besides the fund memorandums signed, he mentioned the framework agreement signed in Qatar and Saudi Arabia. Brazil and the UAE already had one signed.
Translated by Guilherme Miranda
