By Jennifer Bell
With vast resources and more than half-a-billion people, the Dubai Chamber of Commerce and Industry is convinced Latin America is a new economic frontier. Having inaugurated its first office in Sao Paulo, Brazil last week, the chamber is poised to support exponential growth in business between its members and the expansive region.
By building a bridge of commerce and conversation spanning more than 11,000km, Dubai is strengthening trade ties with a group of countries far away — but rich in opportunity.
With more than half a billion people and economies eager to evolve, Latin America is proving to be a land of immense potential for global businesses and industries. The World Bank estimates that half of Latin America’s population will rise into the middle-class bracket by 2030, making it ripe for investors.
Dubai is keen to be ahead of the pack. The Dubai Chamber of Commerce and Industry (DCCI) last week opened its first Latin American office, in Sao Paulo, Brazil. It also took a group of business people on a trade mission to the region to explore new openings for trade and investment between the emirate and Latin America, while helping Dubai-based firms achieve global growth.
The seven-day trade mission — the first in Latin America — included Brazil, Argentina and Paraguay, countries that have each sought to develop closer business ties with the UAE. Tourism, real estate, finance and manufacturing are expected to be the most likely areas where new business can be forged, while logistics, renewable energy and agribusiness are also on the agenda.
“Compared with the rest of the world, large parts of Latin America remain relatively stable and promising as a trade destination,” Dubai Chamber president and CEO Hamad Buamim tells Arabian Business. “It is one of the world’s most dynamic and resource-rich regions, and offers plenty of exciting trade and investment opportunities. It is also home to the world’s leading agricultural producers and exporters, meaning there is plenty of scope to expand trade in this area and enhance collaboration between the GCC and Latin America in the field of food security.
“Meanwhile, GCC businesses can provide their Latin American counterparts with much-needed infrastructure investment, and offer their expertise in key sectors such as logistics, tourism and aviation.”
The trade mission follows the inaugural Global Business Forum on Latin America, which was organised and hosted by Dubai Chamber in the emirate last year. More than 800 experts and specialists including policymakers, CEOs, key business thinkers, and banking representatives from Brazil, Mexico, Argentina, Colombia, Chile, Peru, Panama, Cuba and Ecuador attended the forum to discuss how new and shifting patterns of global demand can benefit business. They also discussed how Dubai can be a pivotal player in boosting trade links between not only Latin America and the emirate but the entire GCC and beyond to Africa, Asia and the rest of the Middle East, and how the two regions can use their respective expertise to gain a competitive edge.
The potential for economic diversification through such links is huge. Brazil, Colombia, Chile, Peru and Mexico have announced that they will invest billions of dollars in the development and operation of infrastructure projects — projects that will require foreign investment. Renewable energy — a key priority for the UAE and other GCC nations — is one of the most important investment sectors in Latin American markets. In Chile, investments in the sector soared by 151 percent in 2015.
In tourism, Peru’s annual investment tops $2bn, and Brazil aims to invest $4bn in the sector over the coming years. Mexico is focussing on agricultural exports, which already total nearly $30bn.
The similarities in ambitions between Dubai and Latin American countries have revealed the potential for their partnership. The trade mission will see Dubai business people follow up on investment opportunities identified during last year’s forum with concrete deals and agreements.
The Dubai Chamber said delegates were invited to join the trade mission based on their strategic growth objectives and nature of business, reflecting the programme’s aim of matching these objectives with business opportunities existing in the target market by providing them with access to key industry decision-makers and government officials.
“The visit represents an ideal opportunity for delegates to learn more about the business environment in Latin America, and meet with key stakeholders from the private and public sectors in Brazil, Paraguay and Argentina,” Buamim says.
“Our new representative office in Sao Paulo, Brazil, will seek to boost bilateral trade and assist UAE-based companies that want to enter Latin America.
“By establishing a presence in this dynamic region, we can more effectively promote Dubai as an attractive trade and investment hub, and attract Latin American companies that plan to expand to Dubai and access markets in the GCC and Africa. The office will open the door to plenty of new opportunities for UAE businesses that will help them to expand globally and boost their competitive advantage.
“As a global agricultural powerhouse, Latin America would benefit from collaborating with the UAE on food security, while Dubai can serve as a key re-export hub for traders that want to reach the GCC and Africa. Staying actively engaged with the region’s private and public sector players is the most effective way to take our trade relationship to the next level.”
Dubai Silicon Oasis deputy CEO of operations and client affairs, Dr Juma Almatrooshi — one of the leading figures in a 7.2 sq km government-owned free trade and incentivisation zone — is unequivocal about the potential for new bilaterial business frontiers to be forged with Latin America.
“Dubai Chamber of Commerce and Industry has been successful in strengthening ties between UAE and Latin America in the past years, through exploring opportunities in Brazil, Argentina, Paraguay, and other Latin American countries, which sets up a business-to-business platform,” he says.
“We would like to explore the business opportunities that the Latin American market provides, while, at the same time, delivering to the business communities in Latin America the opportunity that Dubai free zones has to offer, considering the fact that Dubai is an excellent hub from which to reach the GCC region as a whole.”
Dubai Multi Commodities Centre Authority (DMCC) executive chairman Ahmed Bin Sulayem, who leads a free zone with more than 13,100 members ranging from multinationals to start-ups, and where commerce covers everything from gold and precious metals to food and industrial materials, is particularly interested in Panama.
He says Latin America’s emerging-but-relatively-established markets hold “truly transformative opportunities”, and points to Panama in particular because its trade focus is similar to Dubai.
“Much like Dubai, Panama is a hub for trade and commerce with commodities, and has maritime trading routes and free zone infrastructure, which enables international businesses to thrive and grow,” he says. “We believe that increasingly close collaboration between our two countries will provide valuable opportunities for both.
“For Panama, this provides access to emerging markets in Africa and Asia through DMCC’s gateway to global trade; for DMCC businesses, it provides access to promising Latin American markets. This would present us all with a very bright future in terms of trade.
“Panama is an important trading partner for the UAE, and I believe we can unlock new opportunities that benefit us both. This is evident in the UAE’s plans to open an embassy in Panama this year, and Panama’s decision to upgrade its consulate in the UAE — encouraging developments that further cement our desire to create new gateways through Latin America and the Middle East, Africa, and Asia.”
Diamonds, according to Bin Sulayem, could also be the best friend of commonality-driven commerce between the two countries. “We both have the status of being important regional hubs in the global diamond trade,” he says.
“Panama’s World Jewellery and Diamond Hub was established to serve as a trading headquarters for the diamond, gemstone, and jewellery sectors of Latin America and the Caribbean, serving as a trade gateway for the regional industry supply chain. Likewise, the Dubai Diamond Exchange is an important bridge between producer and consumer markets.
“Our objective is to foster greater trust throughout the global diamond industry, while enabling access to new markets. As the sole points of access for our respective regions, we have a unique opportunity to share insights and best practices, and enhance global governance frameworks and trade practices for the benefit of the global diamond community.”
From crystals to crops, Latin America offers promising trade avenues for the MENA region. Al Ghurair Resources operates regional supply chain facilities for milling wheat and feed, and, according to the company’s CEO, Djamal Djouhri, the role of Argentina, Brazil and Paraguay as important suppliers of soybean, corn, wheat, and barley opens up the possibility for connections to be made.
He says that production from these countries is tipped to “significantly outperform rivals in the decades to come”, and this creates potential bilateral opportunities in providing the infrastructure required to cater for this expansion.
Enhancing cooperation between UAE businesses and their Latin American counterparts also supports the objectives of the 2030 Dubai Industrial Strategy, which aims to stimulate the industrial sector, draw foreign investment to key sectors, and increase the emirate’s gross domestic product (GDP) by $45bn by 2030.
Dubai attracted $7bn in foreign direct investment in 2016, maintaining its position among the top ten cities for inward FDI. It also secured 247 new investment projects, and was placed third worldwide — behind only London and Singapore — for new investment initiatives last year. Both of these areas are critical to realising the goals of the strategy and also the Dubai Plan 2021, which share a focus on expanding the emirate’s high-value economic activities base.
Dubai’s economy also continues to expand faster than the rest of the GCC and higher than the world average, with growth of 3.2 percent and 3.7 percent forecast for 2017 and 2018, respectively.
Buamim says the Global Business Forum series is a key platform to help accelerate further economic growth. The second Global Business Forum on Latin America will be held in Dubai next year.
“The forum series was initiated as a platform to engage key business and government leaders in developing trade and exploring new investment opportunities in emerging markets across the globe. It falls in line with the chamber’s efforts to expand its global presence, and promote Dubai as a gateway to the world,” he says.
Since its first forum four years ago, focussing on Africa, the series has evolved quickly, expanding to the Commonwealth of Independent States (CIS) and now Latin America, with 2016 seeing inaugural forums for both of these regions. Ten heads of state, 74 ministers and dignitaries, 5,400 CEOs and other high-ranking delegates from 65 countries have attended the forums.
“The events have helped to strengthen local stakeholders’ understanding of the business environment in emerging markets, and provided an ideal opportunity to showcase the various advantages and benefits that Dubai can offer businesses abroad, as an important trade hub providing access to markets in the GCC, Africa and Asia,” Buamim says.
“Beyond the high-level networking opportunities, informative sessions, and panel discussions, hundreds of bilateral meetings are held on the sidelines of these events, with the aim of facilitating new partnerships and strengthening trade ties.”
He believes Dubai’s approach to seeking new trade ties and opportunities is defined by its openness, its dexterity of vision and purpose.
“Whether it be agriculture in Latin America, precious metals and commodities in the CIS region, manufacturing in China, or pharmaceuticals in India, each of these markets offers plenty of scope for expanding trade ties with the UAE and Dubai,” Buamim says.
All of this sends the clearest possible signal that Dubai is open for business, and that to form trade links with the emirate is to create a partnership where there can only be winners — on all sides. For Dubai, the biggest win is the progression, through greater global trade and commerce, of its mission to diversify its economy in readiness for the post-hydrocarbon era.
“Trade remains the cornerstone of Dubai’s economy and a driving force behind its diversification,” Buamim says. “Our strategy of exploring promising markets around the world enhances the competitiveness of Dubai and its business community, while it also helps attract more foreign investment to key non-oil sectors within the emirate.”
With the opening of the new office in Sao Paulo last week, the chamber has opened the door to a sea of new opportunities. Starting from a small base of barely a few billion dollars in trade annually, growth is expected to be exponential.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.