Speech addressed by His Excellency Elim Dutra, Ambassador of Brazil in Cairo, at the Meeting of the “Egypt-Brazil Business Council”, on January 26, 2005 at the premises of the Egyptian Businessmen Association in Cairo.

I am honoured to have the opportunity to address such a distinguished audience. I am quite aware that you already know some important facts about Brazil. However, with your permission, I would like to introduce you to some new facts about my country.

Brazil is the largest country in Latin America with 8.5 million square kilometers, and a total population of 182 million more than 50% of which are economically active.

Brazil stands among the top 10 economies in the world and the largest in Latin America with about 50% of total GDP of the region. We have the 10^th largest industrial base in the world and the most diversified manufacturing sector in our region.

Brazil stands among the world leaders in the production of minerals, foodstuffs, steel, automotive vehicles, aircraft, textiles, chemicals, paper and pulp in addition to a variety of consumer goods.

Sustained growth for the Brazilian economy in 2005 is considered all but a fait accompli among top national and international economic analysts. The Institute of International Finance and the IMF predict a 4% growth in GDP in 2005.

These cautious forecasts are based on the strong economic performance during the past year. The latest figures published by the Brazilian Institute of Geography & Statistics show a GDP growth of 5.3% during 2004. This trend is expected to continue through 2005. Preliminary trade figures for the period January-December 2004 denote a trade surplus of about US$ 33.7 billion, a 36% increase over 2003. The balance of payment figures are a further indicator of the consistency of the economic expansion. The current account surplus during January/November 2004 recorded US$ 10.4 billion compared to US$ 3.7 billion in same period of 2003.

As you can see, trade results account for a good part of this performance. WTO data shows that sales during 2004 superseded the world average: Brazil’s export growth registered 32% against a world average expansion of only 18.4%. Brazilian exports recorded US$ 96.5 billion against US$ 73 billion in 2003, a contribution of 26.6% to GDP.

This undisputed growth reflects the emergence of a solid exporting culture. Today, the country is not only a leader in highly competitive markets like soybeans, meat, iron ore and sugar, among others, but is also in sophisticated segments with high aggregate value such as aircraft, shoes, vehicles and industrial machinery and equipment. In 2004, manufactured commodities represented about 55% of total exports whereas raw material and semi-manufactured goods stood at 30% and 14% respectively.

Brazilian imports also registered an unprecedented growth of 30%, from US$ 48.3 billion in 2003 to US$ 62.8 billion in 2004. Noticeably, however, is that the jump in imports is concentrated mainly in the acquisition of capital goods.

The domestic market is showing signs of economic health. During 2004, family consumption increased by 4.9%, reversing a negative index that has been persistent since the beginning of 2003. Industry grew by 6.3%, agriculture and livestock 5.6%, services 3.8% and civil construction 5.9%, while gross capital formation registered a growth of 11.8%, the highest accumulated rate since 1995.

Stimulated by robust industrial growth, employment underwent a sharp recovery. The unemployment index fell to 9.6% by the end of 2004, its lowest level since December 2002.

The greater confidence in Brazil’s economic outlook has been reflected in increased international investor confidence and consequently a pronounced drop in the “Brazil Risk” debt spread from 1800 points in July 2002 to 510 points in October 2004.

Brazil attaches a high importance to its foreign trade and to the diversification of its international trade partners.

President Lula da Silva’s foreign policy has been to create new commercial avenues in order to reduce developing countries’ dependence on purchases from the United States and Europe.

“We want to change the face of the world geography and create new alternatives for Brazilian products” says the President. It is certainly a difficult task, but it is not impossible.

During 2003, President Lula visited fifteen countries considered non-traditional markets for Brazilian products. The fruit of this diplomatic effort came soon after.

In the first half of 2004, this group of countries imported US$ 6.7 billion in Brazilian products, up 44% in relation to the same period of 2003.

After President Lula’s visit to five Arab countries, including Egypt, in December 2003, Brazilian exports to the Arab world grew almost 70% in the first six months of 2004.

Egypt, for example, bought US$ 561 million in Brazilian goods during January-November 2004 compared to US$ 414.5 billion during the same period of the previous year, a growth of about 35%.

Egypt is presently the most important partner of Brazil in the Middle East, since its trade exchange is not dependent on oil.

But there still is ample room for expansion. The current major Brazilian exports to Egypt include frozen meat, sugar, iron ore, soybean oils, automotive vehicles, paper and steel in addition to the entry of some new non-traditional items such as corn, wheat, meat & bone meal, and footwear.

Egypt’s exports to Brazil are around the US$ 35 million mark. In addition to nafta, Egypt is currently exporting fertilizers, cement and coking coal to Brazil. Egypt may still increase its sales to Brazil in other non-traditional commodities such as pharmaceuticals, carpets, agricultural produce, glass containers, and chemicals in addition to other commodities for which exists clear demand in Brazil.

Brazil and Egypt are secure tourist destinations. Tourist exchange between Brazil and Egypt, in addition to enhancing our business relations, may provide an effective vehicle to reduce the gap in the balance of payment between our countries since both countries provide not only an opportunity for leisure, but also a rich cultural heritage.

Businessmen and marketing delegations are welcomed to visit Brazil and explore the possibilities of mutual cooperation. There, they will find all possible assistance whether from government entities or trade associations. I think that the proposed “South American-Arab Summit”, scheduled for next May, in Brazil, provides an unique opportunity for such a rapprochement.

It is my firm belief that the “Egypt-Brazil Business Council” can play an important role in further strengthening our trade relations and reducing the disparity in our balance of trade.

The Council may find it opportune for a business mission to join with the official delegation attending the “South American-Arab Summit” which will have the added advantage of coinciding with the attendance of businessmen not only from Brazil but also from various South American countries.

So, I believe that relations between our countries are daily gaining in importance and may further be enhanced by increased awareness, by Egyptians and Brazilians, of the ample possibilities that both countries offer in terms of trade and investment opportunities.

This is a stimulating challenge for the members of the “Egypt-Brazil Business Council”, as well as to me as Ambassador of Brazil in Egypt.

Thank you.