by Miguel Jorge

The model which Brazil adopted to develop the economy of the Amazon region when it founded the Free Trade Zone centered in Manaus has been in force for just over 40 years. In that time, thousands of companies from all over the world and the rest of Brazil have taken advantage of the tax benefits and set up assembly and production plants. Hundreds of thousands of jobs have been created and Manaus has been transformed into a thriving commercial city which attracts businessmen as well as tourists to the Amazon. In this article, journalist Miguel Jorge, who is also Brazil´s minister for development, industry and foreign trade, comments on what he calls a Brazilian success story.

As the Manaus Free Trade Zone approaches its 41st birthday, it can look back on important achievements for the Amazon region and ahead to important future results for Brazil as a whole. In 2007, the Zone showed record revenues of R$25.7 billion and an increase in the number of jobs created. This growth is likely to continue in 2008 and shows that the policy adopted by Suframa, the body which supervises the Zone, to strengthen the development model has been correct and points to a promising future.

From its creation as a free port, the Free Trade Zone model has proved to be strong enough to adapt to market difficulties and reposition itself as necessary.

The investments Suframa has made in intellectual capital, partnerships with well-known research institutions and the agreements with governments and institutions to expand  into other areas of the Amazon have been part of its policy to make the region less dependent on the fiscal benefits it offers.  The Manaus industrial hub will be able to strengthen its innovative process and remain in the vanguard  of high technology consumer products. As a result, it will be possible to develop a bio-industry and even help the Amazon become a great center for providing environmental services to the rest of the world. By creating intellectual capital, we will be able to identify sustainable economic alternatives which are still unknown in the Amazon region and do not necessarily require incentives to attract investors.   

The federal government is investing R$192.2 million in the region this year. Suframa has 187 agreements with governments and research and teaching institutions in the region which are aimed at meeting one of the most important missions of the model – to extend development to the parts of the Amazon which are most needy and isolated. The resources will be used to finance economic infrastructure projects as well as projects aimed at training, research and the industrialization of regional products.

Within the context of Brazil´s national industry, the Manaus hub has shown itself to be one of the most important and we are committed to support Suframa´s policies. We need to be alert to predatory investments from the foreign market so that our industries are on the same playing field as their foreign competitors. This should be done through the existing legal mechanisms to prevent undercharging and dumping. By doing so, we will remain on the ball and strengthen the Free Trade Zone model.

© Brazil Politrical and Business Comment 2008

Note: This is a free translation of an article which first appeared in the February 2008 edition of the magazine “Suframahoje”, published by Suframa – www.suframa.gov.br. We are grateful to Suframa for allowing us to publish it.