The New Industry Brazil – 02/03/2024 – Celso Rocha de Barros

On the 22nd, the government announced the Nova Indústria Brasil (NIB) program, which seeks to resume Brazilian industrialization, interrupted in the 80s of the last century.

The NIB was received with suspicion by those who remember the failure of previous governments’ interventionist policies, such as the attempt to create “national champions” or the Dilma government’s tax exemptions. These things were expensive, did not reverse the declining trend of the Brazilian industrial sector and failed as an attempt at a “pact between capital and labor”: they ended up with Fiesp’s ducks in the street. A disaster.

NIB’s critics therefore have their reasons. But it is not a case of discarding the NIB on principle. Many countries pursue industrial policy successfully.

In an interview with Sheet, the director of Planning and Structuring of Projects at BNDES, Nelson Barbosa, said that the mistakes of the past will not be repeated: the loan rate for the private sector will be the market rate, contrary to what occurred during the Dilma government. Targeted rate loans would target sectors that can produce positive externalities, such as the ecological conversion of the economy or technological innovation.

It’s an important and positive difference. But the government still needs to tell us much more detail about what it intends to do, especially when we are responsible for paying the taxes of someone who will be exempt.

      
Nor did it seem clear to me how universities and research centers would be integrated into technological innovation projects, and the very idea of ​​”digitalization” (mission 4) seemed vague to me (perhaps due to my ignorance). I did not find it sufficiently demonstrated that the proposed measures are sufficient, for example, for superconductor industries to set up in Brazil.

I completely agree that encouraging innovation should be a priority. But I still don’t understand how the new plan is better, in this area, than previous initiatives, such as the Lei do Bem, of 2005, which NIB proposes to update in a way that is not yet very clear.

In fact, an important part of the NIB is outside what is conventionally called industrial policy: the ecological conversion of the economy (NIB mission 5) and investments in urban infrastructure (mission 3), for example, seem more like investments in infrastructure than industrial policy, and they are both good ideas.

Finally, we must ask ourselves who will coordinate the immense ministerial integration effort foreseen in the NIB. In a text produced at the request of the Brazilian government (“Innovation-Driven inclusive and sustainable growth: challenges and opportunities for Brazil”), economist Mariana Mazzucato noted a certain overlap of policies: the Treasury has the ecological conversion, the Civil House has the PAC, the MDIC proposed the NIB missions, the BNDES has its own projects.

Mazzucato suggested centralizing control in the Civil House (page 9) or the National Council for Industrial Development (page 14). I doubt this dispute will be peaceful.

Ultimately, if the government is aware that industrial policy can complement, but not replace, institutional reforms and investment in human capital, the debate is welcome.

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