Under Attack, Brazilian Culture Positively Impacts Economy with R$170 Billion in Revenue

RIO DE JANEIRO, BRAZIL – “This movie generated 800 direct and indirect jobs.” With this sentence in the final credits, ‘Bacurau’, one of the most celebrated national films of the year, winner of the Jury Prize in Cannes, left a clear message to the government of Jair Bolsonaro, who during the first year of his mandate canceled funding approvals due to the content of the movies produced, threatened to extinguish the National Film Agency (ANCINE), removed the Federal Culture Incentive Law (Rouanet Law) and made ideological appointments to strategic positions in the incentive to the arts.

‘Bacurau‘ led over 730,000 people to theaters and generated an income of over R$11.2 million, according to the distributor Vitrine Filmes.

The numbers are impressive, particularly for a national production in a year in which the government suspended (albeit temporarily) the screen quota policy for national cinema, which led to ‘Avengers: Endgame’ to occupy more than 80 percent of theaters at its premiere in the country in late April.

On December 24th, a decree was finally published, signed by the President, containing the rules for showing national movies, providing legal security for producers and movie theaters.

‘Bacurau’ is only a small example of how culture impacts the Brazilian economy. The cultural sector corresponds to between one and four percent of the national GDP. The Creative Economy Secretariat of the former Ministry of Culture and the Federation of Industries of the State of Rio de Janeiro (FIRJAN) estimates that culture accounts for 2.5 percent of GDP, the equivalent of R$170 billion.

Nichollas Alem, president of the Institute of Law, Creative Economy, and Arts and an expert in Economic Law of Culture, explains that the variations occur because the study of the creative economy is recent – it emerged globally in 1990 – and there is debate about which indicators and activities should be included in the calculation.

“Developing these indicators is the first step towards creating a public policy that sees culture as generating results, be they educational, economic or social. For a long time, there was a sense that culture was only public spending, in the sense that it was the State’s obligation to promote it, but culture also has a strategic dimension, it is a sector with a great tax impact and generates employment,” explains Alem.

In 2018, the cultural sector employed over five million people, both formally and informally, according to data from the National Continuous Household Sample Survey (PNAD Continuous), representing 5.7 percent of the total number of people employed in Brazil.

The structural economic surveys, which are based on a sample of companies within a universe smaller than the Central Registry of Companies, but which consider the volume of the creative economy (ranging from crafts to the advertising market, for instance) estimated that in 2017 there were 223,400 companies directly or indirectly associated with the cultural sector, which formally employed 1.7 million formal people and generated a net revenue of approximately R$539 billion.

In 2010, data from the Ministry of Culture showed that the creative sectors represented approximately 2.84 percent of GDP, the equivalent to R$104.37 billion that year, exceeding the participation of the extractive industry (R$78.77 billion) and the production and distribution of electricity, gas, water, sewage and urban cleaning (R$103.24 billion).

Between 2005 and 2010, the sector’s annual growth was 6.13 percent, higher than the average annual GDP growth – which stood at 4.13 percent in that same period. “This is a sector that can reinvent itself in times of crisis. Culture is invigorating, it’s strategic,” Nichollas Alem says.

The specialist refers to the Comic-Con Experience, a pop culture show focused on videogames, comics, films, and series, which was conceived as a niche event (for nerds and geeks) and now moves millions: in its last edition, in early December, over 280,000 people raised R$265 million in the city of São Paulo alone.

Alem emphasizes that this economic activity has “high added value and very low environmental impact”, in addition to generating positive impacts that were not necessarily predicted in the initial investment. “The installation of cultural equipment in an area considered dangerous, for instance, has an impact on public safety that was not even initially assessed. People are now more likely to visit that region, which can foster local businesses and thus occupation of the streets”, he comments.

“Another option is the promotion of tourism chains, such as the tourism of visits to movie rentals. It’s something so common in other countries that there’s a fiscal incentive for productions that will generate tourism in the medium and long term,” he adds.

The power of audiovisual

In Brazil, the audiovisual is a separate chapter in the culture economy. This sector alone corresponds to between 0.5 and 1.5 percent of Brazil’s GDP – almost half of the cultural GDP – according to data from FIRJAN and the Creative Economy Secretariat.

In 2018, the national cinema released a record 185 productions (the largest in the 2009-2018 historical series), which sold more than 24 million tickets, representing an audience share of nearly 15 percent of the total, according to the Brazilian Film and Audiovisual Observatory.

“We need to free ourselves from the notion that, in liberal countries, the state does not invest in culture. Hollywood’s background has always been very tied to the opening of international markets. Brazil has this great potential to convert audiovisual into foreign trade assets. There is talent, human resources, and creativity that is recognized outside”, says Alem.

In fact, in 2019, Brazilian cinema was highlighted in awards around the world: Divine Love at Sundance and at the Berlin Film Festival in February, where the movie from Pernambuco ‘Waiting for the Carnival’ was also a highlight. ‘In the Heart of the World’, in Rotterdam, as well as ‘Bacurau’ and ‘The Invisible Life of Euridice Gusmão‘ in Cannes.

Alem also remarks that the ANCINE has always been an essential tool for this development, particularly since the establishment of the Audiovisual Sector Fund and the Rouanet Law (through which sponsors can deduct the amount contributed to cultural projects from their tax due).

The historical balance shows that, since 2001, sponsorship by means of fiscal incentive exceeds public investment in culture. In 2016, Rouanet’s sponsorship incentive accounted for 73 percent of tax spending on culture, according to data from the Federal Revenue.

“This is an important policy because it is the market that chooses which projects to finance, without an ideological slant,” says Alem.

The Rouanet Law has been criticized since the 2018 elections by conservative political sectors precisely due to allegations of its use for “cultural indoctrination” projects. The budget allocated in 2018 for the Rouanet Law was R$60 million, which was reduced by the current government to R$1 million, hindering even the smallest productions.

In a meeting with theater producers in São Paulo last week, the Secretary of Culture, Roberto Alvim, announced that he will readjust the funding ceiling to R$10 million, but only for musicals.

“The Constitution, in its Article 215, says it is the State’s duty to guarantee all cultural rights and access to national culture. It’s not an ideological issue,” Alem says.

Source: El Pais