Production Incentive Policies will have US$ 143 billion
Valor Econômico - 03/25/2008
The new industrial policy that the government intends to announce in the next days is called "Productive Development Policy". It foresees, as Valor verified, the investment of R$ 251.6 billion (US$ 143 billion), between 2008 and the year of 2010, in 24 sectors of the economy. From the total to be invested, R$ 210.4 billion (US$ 119.5 billion) concern funds from BNDES and from the Ministry of Development, Industry and Trade. The remaining will come from the budget of the Ministry of Science and Technology and from the so-called PAC of the information and technology (IT) sector. In addition to those funds, the government studies measures of taxes' exoneration and of accelerated depreciation of investments. The new industrial policy, the second one of Lula's administration in four years, has ambitious goals. The first goal, according to the document Valor obtained with exclusiveness, is to expand the investment rate of the economy, measured by the Gross Formation of Fixed Capital, from 18.6% to 21% of the GDP until 2010. For such, the annual average growth of the GFFC will have to be 11.6%, a rate inferior than the one that has been obtained in the last quarters. If that happens, the economy will be investing the equivalent to R$ 604 billion (US$ 343.2 billion) in 2010. In 2006, R$ 390 billion (US$ 179.1 billion) was invested. The expansion of the investments at speed superior to that of the GDP is, according to a member of the economic team, crucial to sustain high growth rates in the next years, without losing control of the inflation or generating problems in the balance of payments. The second goal is to motivate the increase of the private sector expenses with research and development (R&D), from 0.51% to 0.65% of the GDP in the same period. In 2005 the companies invested R$ 12.5 billion (US$ 5.14 billion). If everything works as the government plans, they will invest the equivalent to R$ 18.2 billion (US$ 10.34 billion) in R&D in 2010. The third global goal is to increase Brazil's participation in the world exports from 1.15% to 1.25%, which would make the annual sales leap from US$ 160.6 billion, in 2007, to US$ 208.8 billion in two years. The expected expansion rhythm is 11% a year, below what has been seen in the last years. The fourth goal is to increase in 10% the number of personal computer and exporting small companies until 2010. In 2005, 9,500 small companies sold goods and services abroad. While the first industrial policy of the Lula administration, launched in March of 2004, aimed at benefiting four sectors (capital goods, software, pharmaceuticals, and semiconductors) that could generate systemic gains for the whole economy, the new plan aims at dealing with the problems and potentialities of 24 sectors. Based on that, the government decided to divide the sectors in three types of approach. In the first one are the programs that "mobilize in strategic areas" - health, energy, information and communication technologies, defense industry, nanotechnology and biotechnology. In the second one are the "programs to strengthen competitiveness", in other words, to help the sectors of the Brazilian economy with development and growth potential. In that category, 12 areas were listed: automotive complex; serialized capital goods; custom-made capital goods; textile and clothing; wood and furniture; hygiene and perfumery; construction; services complex; naval industry and coastal traffic; leather shoes and artifacts; agribusiness and plastics. In the third group are the "programs to consolidate and expand the leadership" of sectors in which Brazil is already strong from the international point of view: aeronautics, mining, metallurgy, paper and cellulose, petrochemical and beef. "The strategic orientation is to promote the expansion of the capacity, innovation, and productive modernization. In addition to that, the idea is to expand and diversify the Brazilian foreign insertion and the productive integration with Latin America", explained a high-leveled assistant of the government, adding that the new policy wants to decentralize production and stimulate micro and small companies. Besides ambitioning placing Brazilian companies and productive systems among the five biggest world "players", the government's strategy is to strengthen the national manufacturers and reduce the foreign dependence, reducing the commercial deficit registered in some sectors. An example is in the so-called "health industrial complex". The sector's productive chain represents something between 7% and 8% of the GDP, with activities involving funds around R$ 160 billion (US$ 91 billion). Nevertheless, the country depends on foreign high-density-of-knowledge-and-technology products.