Latin America (LATAM) is set to become a “key focus” for Dubai in the coming years as the emirate looks to increase foreign trade around the world, according to the chairman of Dubai Chambers.

Opening the 2022 edition of the Global Business Forum (GBF) LATAM on Wednesday, Abdul Aziz Al Ghurair stated that “the 27 countries of LATAM and the Caribbean offer a wealth of untapped potential,” aided by post-COVID-19 digital acceleration.

“As Dubai works towards the target [of] boosting foreign trade to $544 billion within the next five years, LATAM will be a key focus for our ambitious strategy,” the chairman said. “Looking at the latest economic indicators, you can see just how far Dubai and the Latin American market have come in developing and expanding their business ties.”

Al Ghurair highlighted how Dubai imports from LATAM were worth “well above $6 billion” between 2018 to 2020, with food being a major contributor. That figure reached $4.8 billion between January and September last year alone, he added.

“Dubai continues to build partnerships with countries in the region to enhance food security and serve as a re-export hub [for Latin American traders that supply markets across the Middle East, Africa and Asia],” he said.

Exports from Dubai to LATAM, meanwhile, reached $687 million between January and September of last year, exceeding the total exports of 2020, Al Ghurair continued.

“This is a sign that more companies in the UAE are tapping into trade opportunities across LATAM, with [the] vast majority targeting Brazil, Mexico, Colombia, and Chile.”

A “PIVOTAL TIME” FOR TRADE

Taking place on Wednesday and Thursday at Expo 2020 Dubai, the fourth edition of GBF LATAM comes at a “pivotal time” for trade, Al Ghurair asserted, as “economies around the world look outwards for new global partnerships and opportunities that can drive sustainable growth in the post-COVID [era] and beyond,” he said.

“Dubai holds the key of unlocking LATAM’s economic potential, as one of the world's fastest-growing city economies that can offer valuable expertise in key sectors, such as logistics, infrastructure, retail, tourism, and finance,” he added. “[This is] in addition to the right level of investment needed to support the sustainable growth development of Latin American companies and economies.”

With the number of Latin American companies registered with the Dubai Chamber of Commerce increasing to 400 since 2017, Al Ghurair concluded that the organisation is “fully committed to facilitating exchange” between the UAE and LATAM business communities through “initiatives and activities beyond GBF LATAM”.

TRADE BETWEEN THE GCC & LATAM

In data released by Dubai Chambers this week, Latin American countries reportedly witnessed economic recovery in 2021, with the region’s GDP growing by 6.5 percent, following a contraction of 7 percent in 2020 after being amongst the regions hardest hit by the pandemic that year.

Prior to the pandemic, bilateral trade between the entire GCC and LATAM was growing, with imports into the GCC from LATAM – notably gold, meat, iron ore, cereals, sugar and coffee – rising from $9.6 billion in 2016 to $17.2 billion in 2019, before falling to $15.4 billion in 2020.

Known as the largest producer and exporter of halal meat to the world, Brazil currently accounts for the largest share of GCC imports from LATAM, at an estimated 42 percent.

In comparison, the total value of exports from the GCC to LATAM is relatively low, approximately $2.5 to 3.5 billion a year between 2016 and 2020, focusing on fertilisers, plastic polymers, aluminium, ammonia and oil.

“There is a complementarity in our bilateral trade,” said Osmar Chohfi, president of the Arab Brazilian Chamber of Commerce (ABCC). “We provide food security to the GCC and the Arab world in general, and they provide us something indispensable for our agribusiness: fertilisers.”

GCC & LATAM FDIs

As for the GCC’s foreign direct investment (FDI) in LATAM, data shows an estimated $4 billion was invested in the region between 2016 and 2021, with 77 percent originating from the UAE, 22 percent from Saudi Arabia, and 1 percent from Qatar.

More than half of the total investment has been directed towards logistics, distribution and transport companies, with a large share sourced from the UAE’s DP World, Dubai Chamber said.

FDI from LATAM into the GCC during the same period was much smaller, estimated at less than $500 million, with 85 percent sourced from Brazil and 13 percent from Argentina.

(Reporting by Rachel McArthur; editing by Seban Scaria seban.scaria@lseg.com)