The role of SMEs in boosting the trade relationship between Brazil and the UAE

Brazil and the UAE have more in common than one might think, particularly when it comes to trade. Small businesses play a disproportionately large role in the economies of both countries, accounting for 99 per cent of all enterprises in Brazil and 95 per cent of private sector companies in the UAE. And they are equally important in international commerce, with micro and small companies representing 40 per cent and 51 per cent of all exporters from Brazil and the UAE, respectively.

Therefore, there’s a lot to learn from each other in terms of sharing experiences, strengthening the promising trade relationship between the two nations and forging closer collaboration between the two countries’ small business communities.

For Brazilian small businesses who want to explore the Middle East and African market, the UAE offers an ideal platform due to its strategic position as a trade hub and a gateway to the rest of the region. From here, Brazilian businesses can easily access the 22 countries of the Arab League and the wider Middle East and Africa.

There’s a thriving existing trade relationship between Brazil and the UAE upon which to build. According to the Brazilian Chamber of Commerce, Brazilian exports to the Middle East increased by nearly half over the past year, from $8.8bn to $12.27bn. Commodities account for more than 70 per cent of this volume, including poultry, sugar, beef, corn and iron ore.

Açaí foodstuffs and cosmetics are among the goods produced by Brazilian small businesses already popular with UAE consumers.

Small businesses everywhere face unique challenges. First, it can be difficult for small businesses to access export markets without the economies of scale larger companies enjoy. Second, they often lack working capital and struggle to raise financing. Third, many small business owners have limited knowledge of navigating government red tape.

Additionally, small businesses hoping to access the Middle East market need support in various ways, such as export strategies and adapting products and services to local standards and regulations. For example, the required Halal certification to export meat products to the Arab world is complex and covers every stage of the product journey and often applies to third parties providing services to an exporter.

To overcome these challenges, small businesses need to boost their bargaining power through associations that can engage with policymakers to help create a more conducive environment for small enterprises to succeed. There’s also the need to work together to access low-cost financing through partnerships with banks and other financial institutions. In the modern trading environment, smaller businesses require assistance to access the latest digital tools and technological innovation to help lower overheads and boost productivity.

Expo 2020 in Dubai offers an ideal opportunity for Brazilian businesses to engage with the regional business community. A select group of small business owners from the South American country made the trip to Dubai to explore opportunities, share their experiences and learn.

As home to nearly two-thirds of the Amazon rainforest, Brazil’s special relationship with natural diversity needs little introduction. Sustainability is a focus of Brazil’s participation in Expo 2020 and was high on the agenda of the small business events Brazilian businesses participated in the UAE. Mobility, another theme of Expo 2020, is of particular interest to Brazil, with populated urban centers such as São Paulo, home to more than 12 million people. Innovation and entrepreneurship in these critical domains, protecting natural diversity and sustainable mobility, could be an essential source of collaboration between UAE and Brazilian businesses, large and small.

Facilitating knowledge exchange between Brazilian companies and their counterparts overseas is another area of mutual benefit. For example, Brazilian producers take great pride in their national origins and actively promote their national identity in their marketing. More MENA-based producers could adopt a similar strategy, an essential consideration in a global marketplace where consumers increasingly prioritize authenticity and sustainable supply chains.

More than ever, we need policies that promote collaboration and remove the barriers small businesses face to compete in an increasingly global marketplace. While the future remains difficult to predict, I do not doubt that small businesses will remain crucial in securing the sustainable prosperity of the UAE, Brazil and the world.

Carlos Melles is the president of Sebrae