Government launches “neoindustrialization” with proposals from previous administrations

The Luiz Inácio Lula da Silva (PT) government will present this Monday (22) a program aimed at what it calls the “neo-industrialization” of the country for the next ten years. The announcement will be made by Vice Geraldo Alckmin (PSB), also Minister of Development, Industry, Commerce and Services.

In practice, these are policies already used in previous administrations, criticized by economists and which did not contribute to the development of the segment, which has been losing share in the National Gross Domestic Product.

As a basic premise, the project entitled “New Industry Brazil” envisages the induction of development by public authorities, with the implementation of credit lines, subsidies and local content requirements to promote national companies.

The plan defines missions, goals and guidelines for the ten-year period, until 2033. The missions are linked to the sectors of agroindustry, health industrial complex, infrastructure, sanitation, housing and mobility, digital transformation, bioeconomy and defense technology.

In each of the areas, the plan brings different references to be pursued. The goal is to increase the share of the agro-industrial sector to 50% of the agricultural GDP (Gross Domestic Product). Currently, the segment corresponds to 23%, according to data from the 2017 Agricultural Census. Family farming establishments must reach 70% mechanization, that is, almost quadruple the current figure, which is 18%.

In the health area, the plan foresees that the country will produce 70% of the volume consumed internally with medicines, vaccines, equipment and other inputs and technologies. National production currently accounts for 42% of the country’s needs.

National companies will have priority for government acquisitions

National companies will be provided with credit lines with favorable conditions so that they can take on works under the New PAC (Growth Acceleration Program). They will also have priority in government procurement contracts. The Interministerial Commission for Innovations and Acquisitions of the New PAC will define the sectors in which the acquisition of manufactured products and national services may be required.

The government must also give preference to national or local manufactured products and services, even if the price exceeds that of competing imported items by a previously defined percentage.

In the past, the requirement for high percentages of local content in industrial production did not produce the expected results. Especially in the oil sector, which ended up generating extra expenses for companies like Petrobras. The state-owned company failed to comply with the minimum limits for purchases and ended up being fined.

Project includes defense industry and ecology, without defining instruments

The defense industry was awarded strategic projects by the Armed Forces. The idea is to obtain autonomy in the production of 50% of technologies by 2033, in addition to defining instruments for financing and guarantees for exports of defense products and resources for space development. The government is trying to get closer to the military.

Without revealing instruments or fiscal policies, it also foresees government subsidies and subsidies in the implementation of the ecological transformation proposal.

The plan included the participation of members of the CNDI (National Council for Industrial Development), which is made up of 20 ministries, the BNDES (National Bank for Economic and Social Development), as well as entities representing civil society, the productive sector and workers.