Brazil’s public policy seeks to align the country with practices of a new international landscape.
The Action Plan for Reindustrialization, known as the Nova Indústria Brasil plan (NIB), is not just a step but a significant leap in Brazil’s industrial development. Unveiled in January 2024 by the Brazilian federal government, it stands out for its unique political, historical, and contextual factors. In a world where industrial policies are making a comeback, the Nova Indústria Brasil plan is set to revolutionize Brazil’s industrial landscape.
The geopolitical tensions, particularly the deepening commercial and other conflicts between the US, China, and Russia, have created a crisis and served as a catalyst for Brazil’s urgent reindustrialization efforts. This underscores the pressing importance of the situation.
Geopolitical change requires strengthened domestic value chains
Of that geopolitical change, a new paradigm of relationships between international institutions is established, slows down globalization, and imposes central countries to adopt several internal policies, including industrial resumption for the recovery of supply chain production and technological development capacity, with less dependence on other markets due to of that instability in the relations between countries.
The nation’s industry, which will be revitalized in Brazil through NIB, has the potential to rejuvenate industrial segments that are far more complex and technological than what can be seen today. This new policy is not just a revival but a strategic move of great significance, aiming to re-establish the processes lost over time and steer Brazil’s industrial development in a new, more competitive direction.
It is an industrial policy that tries to stop deindustrialization, interrupting the process that disrupts supply chains in critical productive sectors in the country, as was the case with electronics. This state of affairs was mainly due to the inability of Brazilian domestic companies to compete with suppliers internationally, which is very competitive due to the cost of international capital and subsidies.
Reindustrialization is the goal of the Nova Indústria Brasil plan
The Nova Indústria Brasil plan has two key objectives. First, it aims to halt the deindustrialization process that has disrupted essential manufacturing sectors in the country, such as electronics. Second, it seeks to connect Brazil with recovering its industrial fabric by supporting productivity and digital transformation for micro, small, and medium-sized companies through the Brasil Mais Productive Program.
The third objective focuses on international opportunities from an environmental point of view, as Brazil has an advantageous positioning in the face of the climate crisis and related issues.
Therefore, industrial policy becomes a decisive instrument of economic progress related to social demands and does not separate the worker class, as happened in past industrial policies.
On the contrary, workers organized in Brazil’s largest trade union, the Central Única dos Trabalhadores (CUT), a forum that brings together the confederations of the metallurgical, chemical, clothing, food, civil construction, and wood industries with the participation of the Labor, and the Industry and Development Institute debated and created the Industry 10+ Productive, Technological and Social Development Plan. This effort was organized by the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese) with the contribution of different social actors, including teachers, university students, representatives of industrial segments, economists, sociologists, and scientists.
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Industry 10+ Plan is a component of Brazil’s efforts to reindustrialize
Industry 10+ Plan, a set of guidelines for the reindustrialization of Brazil, was delivered in 2022 to the then campaign coordinator of Inácio Lula da Silva, Aloizio Mercadante, and the coordinator of the Transitional Government, Geraldo Alckmin, vice-president and current minister of Development, Industry, Commerce and Services.
In April 2023, the National Industrial Development Council, CNDI, was recreated, and with the participation of workers, it was ensured that the essence of the 10+ Plan was included in the NIB.
An update of the Industry 10+ Plan adopted the concept of missions, developed by Professor Mariana Mazzucato, which establishes that public policies to encourage industry must be linked to social and human development, being able to resolve issues that improve people’s lives or that is, that industrial policy is aimed at solving problems that society faces, such as hunger, lack of basic sanitation, housing deficits, and health, education, and transport issues.
NIB is ensuring a floor of R$300 billion for industrial policy, of which R$250 billion will be mobilized by the National Bank for Economic and Social Development (BNDES) and the remainder by the Studies and Projects Financier, Finep until 2026.
A comparison is the Safra Plan, which made rural resources available to agricultural producers for approximately R$651.38 billion over the last two years. More than double the forecast for the industry.
Organizations such as Embrapa, in the case of agriculture, and Embrapii, Apex, and ABDI, in the case of industry, are fundamentally important for creating solutions and strengthening the Brazilian economy’s capacity to reinvent itself and innovate.
The Action Plan for Neoindustrialization needs to maintain and expand dialogue with society, including interested actors who can collaborate with proposals and concerns regarding and transforming the NIB into long-term state policy.
It is hoped that in a short time, the results will materialize, productivity will improve, industrial complexity will increase, and direct investments in the industrial sector will expand so that it is possible to confront new challenges by bringing together government, industry, and workers in a functioning policy continuum.
Over the coming decades, the Nova Indústria Brasil plan could be improved and expanded, calling for new challenges independent of government, with the industrial sector committed to building the policy and demonstrating its results to the Brazilian populace.
The Nova Indústria Brasil plan is a central plan that addresses macroeconomics, political disputes, commercial agreements, international relations, and Brazil’s positioning in the world because the country cannot concede the economic sector that has contributed the most to the nation’s economy.
What Brazil has today materialized during the industry’s period of greatest boom. The country’s economic growth, education, and health advances emerged in this industrial cycle. The Reindustrialization of Brazil has to be considered and valued.
The Nova Indústria Brasil plan is a transformative initiative to reindustrialize Brazil by addressing historical challenges and contemporary geopolitical tensions. It seeks to halt the deindustrialization process, enhance productivity, and promote digital transformation across key sectors, especially for micro, small, and medium-sized enterprises. By integrating environmental considerations and aligning industrial policy with social development goals, the plan aims to create a resilient and competitive industrial landscape. The active involvement of various social actors, including trade unions and academic institutions, ensures a comprehensive and inclusive approach. With substantial financial commitments and strategic guidance from the Industry 10+ Plan, the Nova Indústria Brasil plan positions the country to navigate future challenges and sustain long-term economic growth and development, reaffirming Brazil’s vital role in the global economy.
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