Brazil: Mired in a political crisis but still a potential Islamic finance hub
As published in all the major international news media, unfortunately Brazil is facing a delicate moment from a political standpoint. The sitting president is currently under investigation for conduct which, if proven beyond doubt, may be deemed as a criminal offence. This situation comes at a time when the Brazilian economy is showing signs of recovering from a long recession. Hopefully, this turbulent scenario will soon be over and Brazil can return to normal economic activities.
Returning to an economy that is no longer under recession is important for Brazil due to several reasons including becoming an Islamic finance hub in South America despite the country’s very small Muslim community. Size does not matter as one may recall that Guyana, which is much smaller than Brazil, gained membership to the IDB in March 2016. The IDB has also already allocated some funds for projects in Brazil.
In my previous reports, I kept mentioning about some Islamic finance structures that could possibly work under Brazilian law like Musharakah or Murabahah, although Brazil has not yet enacted regulations dealing with Islamic finance.
Despite the recent investigation into the meat and poultry industry in Brazil, Korin, a Brazilian company, will be exporting to the UAE in the coming months, organic poultry — poultry without antibiotics where the corn and soya used in feeding are organic and duly certified.
A very important move in the relationship between Brazil and the UAE is duly reflected by Yahsat, a satellite operator with its head office in Abu Dhabi, which is developing a project to offer access to broadband in Brazilian territory. To do so, Yahsat will be entering into a partnership with Brazilian company Century.
Finally, after the visit of a Brazilian commercial entourage to the Middle East, including Qatar, Sheikh Abdul Aziz Ali Al-Thani, who is responsible for business planning of the Qatar Investment Authority, affirmed that Brazil is a strategic partner and expressed Qatar’s interest in making direct investments in Brazil.