Govern injects US$ 13 billion in industry
O Estado de S. Paulo - 05/13/2008
After months of expectation and last-minute adjustments, the government released yesterday, in Rio de Janeiro, its new industrial policy, aimed at exportation, investments, research, and innovation. Named Productive Development Policy (PDP), the program is based on tax exemptions of R$ 21.4 billion (US$ 13 billion) until 2010, the end of President Luiz Inácio Lula da Silva's second term in office. The PDP also includes the speeding of the financing resources from the National Bank for the Social and Economic Development (BNDES) to industry and to services that may amount to R$ 210 billion (US$ 127.3 billion) from 2008 to 2010. This value excludes the growing loans for infrastructure provided by the bank of development. Another component of the PDP are the measures to lessen the cost of the BNDES' financing lines, at the cost of R$ 350 million (US$ 212.1 million) a year. The new program was launched with all due formalities at the headquarters of the BNDES, with the presence of President Lula and 11 Ministers, ten governors, and a long list of businessmen. In his speech, President Lula said that "investing, exporting, and innovating are our goals at this tunning point". The greatest purpose of PDP is "to consolidate the long-term growth of the Brazilian economy". The program specifically aims at "preserving the strength of the Brazilian balance of payments", giving support to "a high rate of expansion of the exports" and creating "favorable conditions for the attraction of a great volume of foreign direct investments". The PDP is the second industrial policy initiative of the Lula government - the first one was in 2004. One basic difference between both policies is that PDP is strongly structured on a system of goals. This structure is divided into "macro goals", or "Country-Goals", related to the investment rate, private expenditure on Research and Development (R&D) and exportation; and goals for the specific programs of the PDP. Another aspect in which the new industrial policy is different from the previous one is the emphasis on the systemic initiatives - that is, those initiatives that seek to improve the competitiveness of the group of sectors and companies (and not of specific sectors and companies) with fiscal and tax measures, measures of financing of investments and innovation, and for the guarantee of judicial security.