Isaura Daniel*
isaura.daniel@anba.com.br
São Paulo – The Brazilian industry may contribute to the diversification of economy in Arab countries through the establishment of production bases in the region. This is the opinion of the director at the Economic Commission for Latin America and the Caribbean (Eclac), João Carlos Ferraz, one of the lecturers at the 2nd Brazilian Congress of Innovation in Industry, which ended yesterday (25) in the southeastern Brazilian city of São Paulo. The director at Eclac, an organisation linked to the United Nations, spoke during the congress on the internationalisation of the Brazilian industrial sector. In an interview to ANBA, Ferraz talked about the interest of Arab countries in developing their economy to beyond petroleum, and claimed that the national industry may contribute to that diversification.
The director at Eclac said that the most promising Brazilian sectors regarding the implementation of industries are those that already have increasing exports to the region, such as jewellery, foodstuffs and vehicles, especially buses. This movement is already beginning to take place. Randon, for instance, a manufacturer of highway implements, has assembly lines in Morocco and Algeria, and should establish another one, in the Middle East, this year or in the next. Crystalsev, a Brazilian sugar processing company, is building a sugar refinery in Syria in partnership with other companies and investors. "These sectors opened up with exports, and the next step is to lay stronger local foundations in place," said Ferraz.
According to Ferraz, it will be advantageous for Brazil to invest in Arab countries. He claims that the growth of any given company cannot be restricted by national borders, and that operating outside of the country usually forces the base to operate in an even more satisfying way. During his lecture, Ferraz highlighted the fact that trans-national companies – those that operate outside their countries of origin – are responsible for 50% of worldwide investment in research. They also answer to two thirds of global trade and for 27% of the global Gross Domestic Product (GDP). Foreign direct investment made by Brazil, according to Ferraz, is still too focused in Latin America itself.
The congress, which was promoted by the National Confederation of Industries (CNI), focuses on innovation in the Brazilian industry. The development of research within companies, according to the lecturers at the congress, is key for their insertion in the international market. Ferraz called attention, in his lecture, to the growing importance of global trade to companies. Imports and exports answered to 38% of the global GDP in 1999, and now they have already surpassed 52%. The participation of primary commodities in global trade is decreasing, according to data presented by Ferraz, and that of manufactured goods, which are more elaborate products, is increasing.
The director discussed the growing participation of China in international trade, and claimed that, in order to reach its current performance levels, the country invested heavily in research. According to him, China has been doing this more than Japan, which is regarded as the top country in global technology. "China is not made only of cheap labour and government support, they have a lot of investment in research behind them," Ferraz told the audience. He also claimed, though, that Brazil is also adding value to its products. A significant share of the national industry – 42% – is comprised of sectors that use technology, according to him. This rate, said Ferraz, is 62.1% in developed countries. "We are falling behind if compared to developed countries, but on the other hand we are quite advanced if compared to the other developing countries," he said.
*Translated by Gabriel Pomerancblum
