Manaus Free Trade Zone as Brazil´s development policy for the Amazon (4th June 2015 – Paris) BRAZILIAN AMAZON Corresponds to 59% of the country 5.3 million square kilometers 23, 596 million people 20,000km of navigable waterways Equivalent to 80% of Sulamericana Amazon 1/5 of broadleaved forests primary the world Humid tropical climate - 26ºC to 36ºC Mineral Resources: oil gas bauxite casiterita niobium other THE CONTEXT OF THE MFTZ IN BRAZIL BRAZIL Area: 8,502,365 km2 GDP 2012*: 2,2(trillion – US$) GDP per capita 2012*: 11,320 US$ Population**: 204 million Current Prices *Source: World Bank 2014 ** Source: IBGE – Estimate 2014 Position held in the 100 largest capitals São Paulo/SP 1 Rio de Janeiro/RJ 2 Brasília/DF 3 Curitiba/PR 4 Belo Horizonte/MG 5 Manaus/AM 6 Porto Alegre/RS 7 Fortaleza/CE 8 Municipalities of the State Capitals GDP 2010 at current prices (PPP U$S 1,000) Relative Share of GDP (%) 228.348.530 101.021.794 78.300.578 27.048.017 26.692.626 22.783.200 21.949.887 19.846.445 11,38 5,03 3,90 1,35 1,33 1,14 1,09 0,99 Source: IBGE, GDP of municipalities in 2012 Conversion– Purchasing Power Parity for household Consumption Index - dec/2012 IPEADATA WHAT HAPPENED HISTORICALLY ? 1912 1957 1966 1967 – 1975 1ª CYCLE 1976 – 1991 2ª CYCLE SPEVEA SUDAM Lei 5.173 DECLINE CYCLE OF RUBBER - POPULATION Manaus: 100 mil hab. - REGISTRATION: 2.500 ABANDONED HOUSES - FLU EPIDEMIC 6 mil deads Law nº 3.173/57 - ZFM DEC. nº 288/67 DEC. nº 356/68 Law nº 1.435/75 - REPLACEMENT OF IMPORTS - GEOPOLITICAL - TRADE INTEGRATION OF THE AMAZON - COMMERCIAL TO NATIONAL SCENARIO TOURISM - AGRICULTURE - INDICES NATIONALIZATION : I.N - BASIS FOR CREATION OF FTAs (ALC´S) - POLULATE (Low Population Density) urban PRESSURES in Manaus - EXTENSION OF - First : rural exodus + immigration INCENTIVES WESTERN - Manaus: 284 mil hab. AMAZON JUSCELINO KUBITSCHEK Gen. CASTELO BRANCO Gen. ERNESTO GEISEL S SUPERINTENDENCE OF THE MANAUS FREE TRADE ZONE - SUFRAMA Suframa is an independent federal agency under the Ministry of Development, Industry and Foreign Trade (MDIC). Its objective is to manager and control the tax incentives granted to companies that set up in the Manaus Free Trade Zone, as well as to promote development strategies for the Western Amazon, assuming in this way the role of an investment stimulation agency. PRESIDENCY OF THE REPUBLIC Ministry of Development, Industry and Foreign Trade SUFRAMA THE CREATION OF THE MANAUS FREE TRADE ZONE (Law No 3,173/1957 modified by article 1st of Decree Law No. 288/1967) “The Manaus Free Trade Zone is a free trade area for import and export operations. It enjoys a few special tax incentives established for the purpose of promoting regional development by rising the industrial, commercial and agricultural activities, creating an economic enviroment that allows the growth regardless of regional factors and the far distances from the markets where its goods are consumed." INDUSTRIAL DISTRICT DISTRICT FARMING AND CATTLE RAISING AREA OF OPERATION AND CONTROL SUFRAMA VENEZUELA WESTERN AMAZON GUIANA Bonfim RORAIMA COLÔMBIA Boa Vista EQUADOR Tabatinga SURINAME AMAPÁ Macapá-Santana Manaus Itacoatiara PERU Cruzeiro do Sul* AMAZONAS Porto Velho ACRE BrasiléiaEpitaciolândia WESTERN AMAZON RONDÔNIA Ji-Paraná Rio Branco Guajará-Mirim HOME BUILDING – ADMINISTRATION OF SUFRAMA FREE TRADE AREAS (07) COORDINATION REGIONAL (05) BOLÍVIA Vilhena BRASIL AMAZON WEST (MANAGEMENT AREA AND CONTROL SUFRAMA) CONTROL SYSTEM foreign goods For Inputs: II Suspension of IPI exemption, reduction to zero of the PIS / COFINS For Products: Exemption II and IPI and reduced PIS / COFINS VENEZUELA 1º GUIANA Bonfim SURINAME RORAIMA COLÔMBIA AMAPÁ Macapá-Santana Boa Vista EQUADOR Manaus Tabatinga EXPORTS (ALICEWEB) TOTAL EXEMPTION Itacoatiara AMAZONAS PERU Cruzeiro do Sul* 4º ACRE BrasiléiaEpitaciolândia AMAZON WEST Regional coordination (05) 2º Porto Velho RONDÔNIA Ji-Paraná Rio Branco Guajará-Mirim Headquarters SUFRAMA Free Trade Areas (09) 3º CONTROL SYSTEM NATIONAL COMMODITY IPI exemption, reduction in PIS / COFINS zero BOLÍVIA Vilhena BRASIL SYSTEM OF INDUSTRY INDICATORS Reduction of 88% of II, IPI exemption, differentiated tax rate of PIS / COFINS 0.65% PIS and 3.0% COFINS STRATEGIC AREAS SUFRAMA ORGANIZATIONAL DEVELOPMENT INCENTIVE TAX MANAGEMENT LOGISTICS INVESTMENT ATTRACTION TECHNOLOGY AND INNOVATION INTELLECTUAL CAPITAL AND ENTREPRENEURSHIP PRODUCTIVE DEVELOPMENT Fonte: Planejamento Estratégico da Suframa INTERNATIONAL INSERT MAIN TAX INCENTIVES (MANAUS INDUSTRIAL POLE - PIM) 1. FEDERAL IMPORTS (II) TAX - 88% reduction on inputs for the industrialization and proportional to the national added value when it comes to information technology goods. SUFRAMA EXCISE TAX (IPI) – Exempt SOCIAL INTEGRATION PROGRAM (PIS) and SOCIAL SECURITY FINANCING (COFINS) Zero rate at the entrances and in domestic sales inter-industry and 3.65% in sales of finished products to the rest of the country. SUDAM TAXES ON INCOME (IR) - Reduction of 75% of Income Tax and non-refundable, exclusively for re-investment. Common throughout the Legal Amazon. 2. STATE SEFAZ/AM TAX ON THE MOVEMENT OF GOODS AND SERVICES (ICMS) – Credit Stimulus between 55% to 100%. In all cases the companies are required to contribute to financing funds to higher education, tourism, R & D and small and micro enterprises. COUNTERPARTS REQUIRED BY COMPANIES CONCESSIONS GRANTED INCENTIVES • Process compliance Basic Productive (PPB); • Job creation in the region; • Granting social benefits to employees; • Incorporation of product technology and production processes compatible with state of the art; • Increasing levels of productivity and competitiveness; • Reinvestment of profits in the region; • Investment in training of human resources for the scientific and technological development; and • Industrial design approval with annual limits import of inputs. LOCATION IN RELATION TO MARKETS NORTH AMERICA Tokyo EUROPE ATLANTIC OCEAN Los Angeles ASIA Miami Taipei Hong Kong CENTRAL AMERICA Taiwan PANAMA CANAL Manaus Capital Road route Marine route River route Air and sea route Air route POPULATION OF LATIN AMERICA AND THE CARIBBEAN : About 600 million inhabitants AFRICA Caracas Belém Porto Velho PACIFIC OCEAN São Paulo DISTRIBUTION LOGISTICS - ZFM AP ATLANTIC OCEAN BELÉM PEC MAO PA AM • MANAUS • FORTALEZA • SUAPE • SALVADOR • SEPETIBA • SANTOS • RIO GRANDE • MONTEVIDEO • BUENOS AIRES FOR SUA PORTO VELHO SSA RO BRASIL NORTH FACING POSITION PORTS Modal Transport : River-road most used Belo Horizonte Routes to Southeast and South of Brazil: SEP •Manaus – Porto Velho – Cuiabá – Campo Grande – São Paulo: average from 7 - 10 days (River-road) SSZ River -road •Manaus – Belém: 4-5 days (by way of Amazon river) Highway •Manaus – Porto velho: 3 days (by way of Madeira river) •Manaus – Boa Vista: 12-14 horas (highway) or 1 hour (airlift) Rio de Janeiro São Paulo •Manaus – Belém – Goiânia – Porto Alegre: average from 10 - 12 days (River-road) Porto Alegre RIG MVD BUE SOUTH FACING POSITION PORTS North South • BUENOS AIRES • MONTEVIDEO • RIO GRANDE • SANTOS • SEPETIBA • SALVADOR • SUAPE • CEARÁ • MANAUS SUBSECTORS PARTICIPATION IN ACTIVITIES OF BILLING PIM BILLING FROM JAN to FEB/2015 – PIM In% of Activities by Sub-sectors Thermoplastic 5,16% Metallurgical 4,54% Electronics 33,25% Chemical 12,03% Other 12,21% Two Wheels 15,87% (*) Until Feb– Partial data Computer Goods 16,93% Source: COISE/CGPRO/SAP – SUFRAMA Available in: Industrial Polo Performance Indicators Manaus, updated publication on 04/15/2015. INDUSTRIAL SECTOR BILLING OF INDUSTRIAL POLE MANAUS – PIM BILLING OF INDUSTRIAL POLE MANAUS - PIM In Billions Billing R$ 83,5 Billing US$ 73,5 69,0 71,7 61,6 50,5 41,2 35,1 37,5 38,6 31,1 26,0 12,7 4,7 2009 2010 2011 2012 (*) Until Feb– Partial data Source: COISE/CGPRO/SAP – SUFRAMA Available in: Industrial Polo Performance Indicators Manaus, updated publication on 04/15/2015. 2013 2014 2015 (*) INDUSTRIAL SECTOR PRODUCTIVE INVESTMENT- PIM PRODUCTIVE INVESTMENTS BY COMPANIES ACTIVE IN PIM In Billions PRODUCTIVE INVESTMENT IN em US$ 10,66 9,28 10,09 10,66 10,68 8,87 7,90 2009 2010 2011 2012 (*) Until Feb– Partial data Source: COISE/CGPRO/SAP – SUFRAMA Available in: Industrial Polo Performance Indicators Manaus, updated publication on 04/15/2015. 2013 2014 2015 (*) INDUSTRIAL SECTOR MOVEMENT OF WORKFORCE– PIM MOVEMENT OF WORKFORCE Workforce (*) 119.985 120.288 121.631 122.100 2011 2012 2013 2014 115.998 103.663 92.700 2009 2010 (*) Effective Workforce + Temporany + Outsourced 2015 (**) (**) Until Febrruary , Corresponding to a monthly average of informant System of indicators mith date companies plenums project approved by the board of directors of Suframa - CAS Source: COISE/CGPRO/SAP – SUFRAMA Available in: Industrial Polo Performance Indicators Manaus, updated publication on 04/15/2015. INDUSTRIAL SECTOR SOURCE OF PRODUCTION SUPPLIES - PIM SOURCE OF SUPPLEIS - PIM In % Foreign Source Regional Source National Source 53,84% 25,42% 58,52% 55,34% 22,30% 25,70% 60,60% 63,18% 63,00% 24,04% 22,33% 22,10% 67,13% 20,56% 20,74% 19,18% 18,95% 15,35% 14,49% 14,89% 12,31% 2009 2010 2011 2012 2013 2014 2015 (*) (*) Until Feb– Partial data Source: COISE/CGPRO/SAP – SUFRAMA Available in: Industrial Polo Performance Indicators Manaus, updated publication on 04/15/2015. UNIVERSITY OF THE STATE OF AMAZONAS - UEA Comprises the major part of the investment resources in R & D for goods from computer manufacturing companies and the counterparts by state incentives. 43 undergraduate courses; 22.562 students enrolled; 7 Masters degrees; 2 doctoral programs; Satellite students lessons for from any Amazonas community. HUMAN DEVELOPMENT INDICES FIGURE 1. POOR OF SPACE DISTRIBUTION IN BRAZIL NORTH IN 1991 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 2. POOR OF SPACE DISTRIBUTION IN BRAZIL NORTH IN 2000 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 3. POOR OF SPACE DISTRIBUTION IN BRAZIL NORTH IN 2010 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 4. CLUSTERS TO THE SPATIAL DISTRIBUTION OF THE PROPORTION OF POOR IN NORTHERN BRAZIL IN 1991 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 5. CHART WASTING MORAN FOR THE POOR OF PROPORTION IN BRAZIL NORTH IN 1991 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 6. CLUSTERS FOR DISTRIBUTION SPACE OF POOR RATIO IN BRAZIL NORTH IN 2000 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 7. CHART WASTING MORAN FOR THE POOR OF PROPORTION IN BRAZIL NORTH IN 2000 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 8. CLUSTERS FOR DISTRIBUTION SPACE OF POOR RATIO IN BRAZIL NORTH IN 2010 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 9. CHART WASTING MORAN FOR THE POOR OF PROPORTION IN BRAZIL NORTH IN 2010 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 10. SPACE OF IDHM DISTRIBUTION IN BRAZIL NORTH IN 1991 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 11. SPACE OF IDHM DISTRIBUTION IN BRAZIL NORTH IN 2000 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 12. SPACE OF IDHM DISTRIBUTION IN BRAZIL NORTH IN 2010 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 13. CLUSTERS FOR DISTRIBUTION OF SPACE IDHM IN BRAZIL NORTH IN 1991 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 14. CLUSTERS FOR DISTRIBUTION OF SPACE IDHM IN BRAZIL NORTH IN 2000 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 HUMAN DEVELOPMENT INDICES FIGURE 15. CLUSTERS FOR DISTRIBUTION OF SPACE IDHM IN BRAZIL NORTH IN 2010 Source: Makers for Economic Studies and Coordination for Companies – COGEC, using IpeaGeo Software 2.0.0 SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 16. DESCRIPTION OF THE FIVE LEVELS OF IPS IN THE MUNICIPALITIES OF THE AMAZON Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 17. IPS – MUNICIPALITIES OF AMAZON Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 18. SOCIAL PROGRESS OF CONTENTS – IPS FIGURE 3. CHANGE IN IPS AND DIMENSIONS (MINIMUM, AVERAGE AND MAXIMUM) IN THE AMAZON Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 19. RELATIONSHIP BETWEEN IPS AND INCOME PER CAPITA IN THE CITIES OF THE AMAZON Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 20. RELATIONSHIP BETWEEN IPS AND INCOME PER CAPITA IN THE MUNICIPALITIES OF THE STATE OF AMAZONAS. Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 21. HUMAN NEED BASIC (1 DIMENSION OF IPS) MUNICIPALITIES IN THE AMAZON Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 22. GROUNDS FOR WELFARE (2 DIMENSION OF IPS) IN THE CITIES OF THE AMAZON Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 23. GROUNDS FOR WELFARE (2 DIMENSION OF IPS) IN THE CITIES OF THE AMAZON Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. INDUSTRIAL POLE OF MANAUS - PIM The Industrial Pole of Manaus created economic alternative that allowed the preservation of 98% of native vegetation. 95,2 1,56 98,0 0,41 SAVANA FLORESTA ÁGUA 97,9 4,92 PIM 87,6 3,11 62,4 13,98 Agro-Negócio + Pecuária DESFLORESTAMENTO 81,3 31,6 Minério + Pecuária + Madeira 63,3 36,17 Agro-Negócio + Pecuária %Área Preservada %Contrib. Desmat. 85-03 Principal Ativ. Econ. 23,5 2,49 SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 24. GROUNDS FOR WELFARE (2 DIMENSION OF IPS) IN THE CITIES OF THE AMAZON Source: Social Progress Index in the Brazilian Amazon - IPS AMAZON 2014. BRAZIL COMPETITIVE PROFILE FIGURE 25. BRAZIL COMPETITIVE PROFILE Source: FGV Projetos FT graphic. Photos Dreamstime, Istock; Getty images: available Financial TimesAmazon SOCIAL PROGRESS INDEX IN THE AMAZON FIGURE 26. BRAZIL COMPETITIVE PROFILE Source: FGV Projetos FT graphic. Photos Dreamstime, Istock; Getty images: available Financial TimesAmazon Regional Social Contability and Input-Output Matrix TABELA 1 – RELAÇÕES PIB – BRASIL, AMAZONAS, PERNAMBUCO, MINAS GERAIS E RIO GRANDE DO SUL 2006, 2005 E 2003 Variáveis PIB AM 2006 39.157 BR 2006 PE 2005 MG 2005 2.369.484 49.922 192.639 BR 2005 RS 2003 2.147.239 131.053 BR 2003 1.776.475 VA Impostos s/ produto/PIB 32.976 2.034.421 42.936 167.301 1.842.253 119.584 1.547.141 15,8% 14,1% 14,0% 13,2% 14,2% 8,8% 12,9% Consumo total/PIB Consumo Famílias/PIB 56,7% 80,3% 99,8% 66,8% 80,2% 74,3% 77,8% 36,4% 58,9% 67,6% 49,6% 58,9% 57,9% 58,0% Taxa de investimento 19,7% 16,4% 13,3% 16,2% 15,9% 12,5% 14,6% Importação/PIB 97,4% 11,5% 68,2% 61,8% 11,5% 54,6% 11,6% Exportações/PIB 125,5% 14,4% 55,2% 77,9% 15,1% 64,7% 14,3% 2,23 0,26 1,23 1,40 0,27 1,19 0,26 GAE* *Grau de Abertura da Economia – Definição do Manual de Contabilidade Nacional (Nações Unidas) Fonte: Elaboração própria com base nas Tabelas de Recursos e Usos dos estados referenciados e do Brasil Regional Social Contability and Input-Output Matrix TABELA 2 – PARTICIPAÇÃO DE VARIÁVEIS EXTRAÍDAS DAS TRUS NOS RESPECTIVOS PIBS BRASIL, AMAZONAS, CINGAPURA E HONG KONG – 2005/2006 (%) Ótica da Renda Ótica da despesa Variável Brasil Amazonas Cingapura Hong Kong Consumo Final das Famílias 58,9 36,3 38,5 54,5 Formação Bruta de Capital Fixo 16,4 19,8 21,7 21,9 Exportações 14,4 125,5 232,7 205,5 Importações 11,5 97,4 203,5 194,1 Impostos Excedente Operacional Bruto e Rendimento Misto 15,3 17,1 4,5 4,6 34,8 58,2 53,6 45,5 Rendimento do Trabalho 32,5 24,7 37,3 45,4 Fontes: Amazonas – TRU 2006-SUFRAMA, 2012; Brasil – TRU 2006 – IBGE, 2008; Cingapura e Hong Kong – United Nations Statistics Division e Asian Development Bank. Nota: Os dados são de 2006, exceto as informações referentes a Impostos, Excedente Operacional Bruto e Rendimento do Trabalho, no caso de Hong Kong e Cingapura, que foram extraídos das TRUs referentes ao ano de 2005, cuja fonte é o Asian Development Bank. RESULTS FIAM VII – YEAR 2013 The Amazon International Fair (FIAM VII) is a business event held every two years by SUFRAMA. Between 27 and 30 November 2014, the seventh edition was held in the city of Manaus, with very positive results: • 55 000 visitors; • 300 exhibitors at the Grand Pavilion with exposure Industrial Pole of Manaus products; • U$ 17 million (R$ 40.8 million) traded in the Business Round; • 1.200 people attended the Seventh journey of Seminars; • Exhibition of regional products in the Amazon Hall; • Round of Tourism Business; • Exhibition of Creative Business; • Participation of 07 countries: Argentina, Venezuela, Chile, Peru, Colombia, Suriname and Poland. SUFRAMA LEADING PUBLICATIONS http://www.suframa.gov.br/noticias/indexNoticias.cfm http://www.suframa.gov.br/zfm_principal.cfm http://www.suframa.gov.br/zfm_indicadores_do_pim.cfm http://www.suframa.gov.br/noticias/publicacoes-mip.cfm http://www.suframa.gov.br/noticias/livros-tecnicos.cfm SUPERINTENDENCE OF THE MANAUS FREE TRADE ZONE - SUFRAMA Thank You! RENATO MENDES FREITAS, M.Sc. Coordinator of Economic and Business Studies of SUFRAMA, Substitute. Email: [email protected] Phone. +55 (92) 3321-7204