State has to be what is necessary to induce development, says Lula

The federal government plans to invest R$ 106.16 billion in four years to boost Brazil’s new industrial policy. The announcement was made during the 17th meeting of the National Council for Industrial Development (CNDI), this Thursday (6th), at the Planalto Palace, in which President Luiz Inácio Lula da Silva participated.

The policy’s main financier will be the National Bank for Economic and Social Development (BNDES), with R$ 65.1 billion in resources. The Financier of Studies and Projects (Finep) and the Brazilian Company of Research and Industrial Innovation (Embrapii), the last two linked to the Ministry of Science, Technology and Innovation (MCTI), will make the other contributions.

President Lula pointed out that the government is going to allocate resources to the BNDES and create the conditions for investments in innovation. “The nonsense that the State has to be strong or has to be weak is over. The State has to be the necessary State to be able to direct and induce the country’s economic growth,” he said. “Let’s stop this question of saying who is better and who is worse, Brazil needs both, it needs the State and it needs the private sector. And it needs to train more qualified professionals if it really wants to return to being an industrialized country”, he added.

Lula reaffirmed that the economy will grow when money circulating in the hands of the population and that the investments in education cannot be considered expenses.

“Little money in the hands of many means income distribution, it means less poverty, more consumption power, it means improving the life of society, which is what we need to do. With the measures we have already taken here, the money is circulating. If the money reaches the bottom, it will not be invested in the stock market, it will not buy dollars; he goes back to trade. When you go back to commerce, commerce wins, industry wins, jobs win, everyone wins, you don’t need to be an honoris causa doctor to know that, ”he said.

For the president, Brazil has a window of opportunities and potential to attract new investments. He cited the energy transition, the gas industry and transport modes.

“Brazil has the chance it never had. The fact that Brazil has been exiled from the world for the last six years has given the world a thirst, a need for Brazil. And we need to take advantage of the fact that Brazil has no disputes with anyone, Brazil likes everyone and everyone likes Brazil”, said Lula, arguing that this is one of the reasons for the country to maintain neutrality in relation to the war between Russia and Ukraine.

Deindustrialization

The vice-president and minister of Development, Industry, Commerce and Services, Geraldo Alckmin pointed out that the country is facing an early de-industrialization process. Alckmin presented data showing that, in the 1970s, the manufacturing industry represented more than 20% of the Brazilian Gross Domestic Product (GDP – sum of goods and services produced in the country) and today it has fallen to around 10%.

“It’s the size of the challenge we have ahead of us”, said Alckmin, opening the meeting.

The CNDI is linked to the Presidency of the Republic and chaired by the Minister of Development, Industry, Commerce and Services. Created in 2004, the collegiate held its last meeting in 2015. It is composed of 20 ministers of State and the president of the National Bank for Economic and Social Development (BNDES), today Aloízio Mercadante, and 21 councilors representing civil society.

According to the Presidency of the Republic, the council returns with the mission of building a new industrial policy for Brazil, “of an innovative, sustainable and socially inclusive nature”.

The president of the National Confederation of Industry (CNI), Robson Andrade, highlighted that, in recent years, the main and most industrialized countries, such as the United States, China, Germany and France, decided to invest massively in the industrial development of their already industrialized countries. .

“(They) realized that, to face this new moment that we live in the world, of inflation, of, mainly, unemployment, of the need to generate quality jobs, knowledge and technology, only the industry really would be able to provide such needs for these countries”, he said, citing landmarks of the Brazilian industry and the importance of new investments in the sector.

The president of the Central Única dos Trabalhadores (CUT), Sergio Nobre, stated that the working class has always fought for an industrial policy, but recalled that the installed industry needs to have the same attention.

“There are important regions, traditional regions, and it is this industry that kills a lion a day, fights against all kinds of adversity, to continue surviving and maintains important regions of the country”, Nobre pointed out. “It’s an industry that hasn’t reached the neo-industry yet, it’s struggling to leave the second Industrial Revolution and go to the third”, he emphasized.

high interest

The basic interest rate of the economy, the Selic rate was criticized during the meeting, with the argument that the announced investments will not be efficient to boost the industry with the high cost of credit.

The rate is set at 13.75% per annum. Although it stopped rising in August last year, it is at the highest level since the beginning of 2017, and the effects of monetary tightening are felt in the rise of credit and the slowdown of the economy.

The president of the CNI pointed out that the country needs credit with low interest rates. “It’s the battle that we all have today to reduce interest rates in Brazil, and I think we have all the conditions for that, so that this reduction in interest rates begins”, said Robson Andrade, also defending the approval of the tax reform.

The CUT representative added that the issue needs to be dealt with in the Federal Senate, which is the body that approves nominations for the Central Bank directorate, which sets the Selic rate.

“We can have the best industrial policy in the world, the best tax reform in the world, now with the interest rate at 13.75%, forcing the BNDES, which is the main development bank, to take out a loan with 13.75% %, plus the cost of the bank, which reaches 20%, 21%, how are we going to grow?”, he questioned.

According to the president of the BNDES, from January to May of last year, the cost of the interest rate was R$ 187 billion for the government, since the Selic index is the public debt index. “From January to May this year, it was R$297 billion — that’s R$110 billion more in tax costs. So, in addition to inhibiting investment, they are increasing the public debt, which is the Central Bank’s biggest goal, the debt / GDP ratio, ”he said. “We need to reduce interest rates, the Senate has to have this debate with transparency,” added Mercadante.

Adverts

Also this Thursday, the expansion of Brasil Mais Productivo (B+P) was announced, a program launched in 2016 that offers technical consultancy with solutions to increase productivity, innovation and generate more digital transformation for micro, small and medium-sized Brazilian companies. .

The program, coordinated by the Ministry of Development, Industry, Commerce and Services DIC, with the support of the Brazilian Agency for Industrial Development and in partnership with the National Service of Industrial Learning (Senai), Brazilian Service of Support to Micro and Small Companies (Sebrae ), BNDES and Financier of Studies and Projects (Finep), has already served more than 100,000 companies throughout Brazil. The reformulation of B+P aims to benefit around 185,000 companies by 2026, with a special focus on the industrial sector, with an investment of BRL 1.5 billion between 2023 and 2026.

A technical cooperation agreement was also signed to promote technological development and increase the supply of machines, implements, equipment and technologies adapted to the needs of family farming. In addition to the MDIC, the ministries of Agrarian Development and Science, Technology and Innovations, Embrapa Brasileira de Pesquisa Agropecuária (Embrapa), BNDES, Finep, Embrapii and the banks of Northeast Brazil, Brazil and Amazon.

The act is part of the resumption of the Mais Alimentos program, as announced on the 28th, at the Crop Plan for Family Farming.

new industrial policy

According to the government, the process of early deindustrialization involves a production structure increasingly focused on primary sectors, less robust linkages between the links in the production chains and exports concentrated on products of low technological complexity.

“The resumption of industrial policies, innovation and promotion of more competitive qualified international insertion involves overcoming productive and technological backwardness. This is the challenge that the CNDI proposes to resolve”, explained the Presidency of the Republic, in a statement in which it cites, among the principles proposed for the new policy, socioeconomic inclusion, professional training and income improvement, reduction of regional inequalities and sustainability.

In the coming months, the CNDI will focus on the six missions of industrial policy, derived from the country’s social and development problems:

– Promotion of sustainable and digital agro-industrial chains for food and nutrition security

– Resilient health industrial economic complex to reduce the vulnerabilities of the Unified Health System (SUS) and expand access to health

– Sustainable infrastructure, sanitation, housing and mobility for productive integration and well-being in cities

– Digital transformation of the industry to increase productivity

– Bioeconomy, decarbonization and energy transition and security to guarantee resources for future generations

– Technologies of interest to national sovereignty and defense

Divided into working groups, members must dialogue with the various industry segments, identify bottlenecks in chain consolidation and decarbonization, and design strategies and actions to boost industrial activity in these areas.

The next steps in the work involve defining the technological routes for the different sectors to be developed, as well as the instruments to be used in these processes, such as financing and guarantees, research and development and quality infrastructure.