Lula launches this Monday a plan to boost national industries

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Nova Indústria Brasil brings together actions to develop the sector until 2033, with subsidies and loans. Program was produced throughout 2023 and does not detail funding sources. President Lula and Alckmin, vice-president and minister of Development and Industry, during a visit to the electric bus factory Cadu Gomes / VPR President Luiz Inácio Lula da Silva (PT) participates this Monday (22) in the launch of a plan of actions to try to stimulate and develop Brazilian industries. The program provides, among other instruments, for the provision of credit lines, subsidies and public investments. The country’s new industrial policy will be presented after the approval of the central text of the proposal at the National Industrial Development Council (CNDI), led by the vice-president and minister of Industry and Commerce, Geraldo Alckmin. The event should include the participation of ministers; the president of the National Bank for Economic and Social Development (BNDES), Aloizio Mercadante; and representatives of the industrial sector. The proposal under discussion, obtained by g1 and GloboNews, establishes a series of goals and objectives to develop the industry until 2033. In parallel, it also foresees a short-term plan — until the end of Lula’s mandate, in 2026. The text was built over the last year, with the participation of CNDI members. Without detailing the sources of financing and executions, the Nova Indústria Brasil (NIB) plan brings together a series of government actions to stimulate industrialization in the country. In practice, it defines the government as the main driver of the sector’s development. In the document, the Executive states that the new industrial policy is also a response to a process of deindustrialization in Brazil and the low development and export of products with technological complexity. According to the text, the measures should “strengthen Brazilian industry, making it more competitive, and thus capable of generating jobs, increasing national income and reducing inequalities”. Goals Over more than a hundred pages, the document defines the objectives of the industrialization policy as improving productivity and national competitiveness, and repositioning Brazil in foreign trade. The plan for industries is divided into six axes — or “missions”, according to the document. Actions and goals will be developed specifically for each person. The axes are linked to the infrastructure, sanitation, housing and mobility sectors; agroindustry; health industrial complex; digital transformation; bioeconomy and energy transition; and defense technology. The list of measures linked to the axes includes, for example, reducing the time spent analyzing patent applications, rationalizing port fees and customs procedures, and encouraging innovation and research. The goals of the new industrialization policy will also be linked to “missions”. According to the draft resolution that must be adopted by the CNDI to establish the plan, these objectives must be achieved by 2033: agro-industries: increase the participation of the agro-industrial sector in agricultural GDP to 50% and achieve 70% mechanization of family farming establishments, with the supply of at least 95% of the market by nationally produced machinery and equipment, ensuring environmental sustainability health industrial complex: producing, in the country, 70% of national needs in medicines, vaccines, medical equipment and devices, materials and others inputs and technologies in health infrastructure, sanitation, housing and mobility: reduce travel time from home to work by 20%, increasing production density in the sustainable public transport chain by 25 percentage points digital transformation: digitally transform 90% of companies Brazilian industrial companies, ensuring that the share of national production triples in the segments of new bioeconomy technologies and energy transition: promoting green industry by reducing CO2 emissions by 30% per value added to the industry’s GDP, increasing the share of biofuels in the industry by 50% transport energy matrix, and increasing the technological and sustainable use of biodiversity by industry by 1% per year defense technology: obtain autonomy in the production of 50% of critical technologies for defense According to the NIB plan, the goals are a “reference”, which must be followed when directing government resources. Brazilian industry production grew 0.5% in November 2023 Incentives The new industrialization policy foresees that the objectives will be supported by “financial and non-financial instruments” articulated by the National Council for Industrial Development. “State action for industrial development must aim to densify the production of our national chains in order to guarantee the sovereignty and resilience of our economy and society in moments of building opportunities and facing difficulties that may exist in the international system”, he says the document. The plan establishes 13 instruments that the government may adopt to encourage industries and meet targets: government purchases loans subsidies public investment tax credits foreign trade technology transfer intellectual property quality infrastructure equity participation regulation technological orders and local content requirements Although not signal how these measures will be implemented, the plan mentions some mechanisms, such as the use of government purchases to stimulate industrial production. Reserves for government purchases are one of the impasses in the implementation of the trade agreement between Mercosur and the European Union. The European side defends that companies from the bloc participate, on equal terms, in tenders in Mercosur countries. And vice versa. These tenders involve, for example, the acquisition of goods, contracting of services and execution of works with public resources. President Lula is against the provision. In the Brazilian government’s assessment, in practice, the agreement makes it difficult for governments to prioritize local companies to stimulate domestic production, for example. In addition to the stimulus through government purchases, the plan also mentions the adoption of minimum percentages for the purchase of national products — the so-called local content requirement — by companies contracted for works under the New Growth Acceleration Program (PAC). The criteria, in this case, would be defined by a government commission. Concept 4.0 goes from the countryside to industry in the sugar-energy sector Biosul/Disclosure Neoindustrialization In a note, the Ministry of Industry and Commerce stated that the new policy is “based on international practices” and will have the objective of “implementing a neoindustrialization project, with an industry sustainable, strong and innovative”. “The new industrial policy will represent an improvement in people’s lives, increased competitiveness and productivity, more jobs, innovation and presence in the international market”, says the ministry. The resumption of policies to encourage national industry is one of the goals of President Lula’s third term. In July, at the first CNDI meeting, the PT member stated that the government would create conditions for the development of the sector. “My government has no time to waste. I did not return to govern this country to do the same thing I already did. We came back to try to do things differently. And bring about the industrial revolution in this country, so we can be truly competitive. The time is now,” he stated.

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