In a collaborative column for Estadão newspaper, published today, President Luiz Inácio Lula da Silva, commonly known as Lula, and Vice President Geraldo Alckmin depict their perspectives on a new industrialization era in Brazil.
They articulate the need to halt deindustrialization, given its dire impact on job creation and the nation’s GDP growth.
Despite its technological growth, the duo recognizes the value of raw material exports but warns about its vulnerability to global price fluctuations.
They argue that a knowledge-centric economy necessitates revitalizing the industrial sector, which is crucial for Brazil’s self-reliance in health, energy, communications, and defense.
However, they admit Brazil is losing ground in the competition for productive sophistication.
Lula and Alckmin lament Brazil’s plummet from the 25th to the 50th rank in economic complexity over the years.
They contrast this with countries like China that have ascended to the top of the industrial ladder, creating an economy more complex than Denmark’s and elevating millions from poverty.
In 2022, Brazil saw a 2% decline in labor income, a decade-low value.
The leaders emphasize the need for a shrewd industrial policy aligning with current global trends, a strategy being adopted by even the most liberal nations.
They advocate for resilient production chains to withstand shocks like the pandemic-induced shortages and the urgency of climate change.
Crafting an effective industrial policy is a matter of strategy, and for this, the revitalized National Council for Industrial Development (CNDI) will play a crucial role in representing societal views.
Industry’s goals will arise from the CNDI, with a focus on health and defense. These targets will complement other measures, like the new Semiconductor Industry Technological Development Support Program (Padis) and initiatives to tackle the Brazil Cost.
Lula and Alckmin foresee commercial prospects for Brazil as a green power.
The automotive industry’s transition from fossil fuels to electric cars and biofuels can be a potential export avenue, including flex-fuel engines to ethanol-ready markets in Asia, Africa, and Latin America.
They urge to rejuvenate trade within South America and the Atlantic Coast of Africa and exploit emerging Asian markets like India, Indonesia, Vietnam, and China, a possible destination for Brazilian cosmetics and food.
They believe Brazil’s resurgence on the global investment map and its robust renewable energy sector present further opportunities.
Brazil can attract green investments, with almost 90% of its energy matrix being clean and expanding wind and solar energy.
They also highlight the potential of the nation’s agribusiness strength to stimulate agribusiness, finance agricultural machinery exports, and reduce foreign dependency through the National Fertilizer Plan.
For neoindustrialization, they propose fair and efficient taxation reforms to unblock, de-bureaucratize, and simplify processes inhibiting industry.
These reforms aim to stimulate private investments, boost exports, tackle distortions, and enhance the business climate by reducing the ‘Brazil cost’.
Capital accessibility is also crucial.
They assert the government’s role in reducing capital costs to help entrepreneurs create and grow businesses with a new fiscal framework, enhancing economic stability and predictability.
Finally, they plan to invest in people. They believe well-educated human capital is critical for industry prosperity.
Hence, they laud investments in the new Bolsa Família, prioritizing children, primary education advancement, and the minimum wage valorization.
“Over the upcoming years, the industry will drive an economic policy that generates income and jobs that demand more knowledge, even in the service sector,” they conclude.
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