‘We are liberals, but we are not fools,’ says Brazil’s Minister Guedes on economic openness

RIO DE JANEIRO, BRAZIL – Economy Minister Paulo Guedes said on Thursday, May 27, that the reindustrialization of Brazil is one of the government’s goals. According to Guedes, the pace of economic opening needs to respect the “heritage” of the national industrial park. “We are liberals, but we are not fools,” he said at an event held by the Industry Coalition.

Guedes said he has watched with “great sadness” the decline in industry’s share of the Brazilian Gross Domestic Product (GDP) in recent decades. “The way for industry to survive was to find protection in Brasilia and share the spoils with its unions over Brazilian society. While there was an exploitation of consumers, the industry was crushed from 35% to 11% of GDP, when we could still have 20% to 25% of GDP,” he added.

Once again, the Minister listed the measures taken by the government during the Covid-19 pandemic and advocated mass vaccination of the population for a safe return to work. “Brazil is at war with the virus, we can’t fool ourselves about that,” he reiterated.

He said again that Brazil’s trade opening will occur gradually, with the approval of competitiveness measures before a full opening. He mentioned the approval of new frameworks for cabotage (coastal shipping), energy and gas. “We are not going to bring down Brazilian industry for the sake of trade openness,” he said.

Guedes stressed the need to review taxes on the productive sector. “Agribusiness excels in the world also because the sector has an ‘absence of taxation’,” he added.

For the Minister, the future of the economy involves digital services. Once again, he advocated the creation of a digital hub in the heart of the Brazilian Amazon, similar to Silicon Valley in the United States, to attract foreign big tech firms. “We need a 20-year tax exemption for foreign and Brazilian companies based in the Amazon. Manaus has to be the world capital of green economy. The future is green and digital, we have to redesign the model in the Amazon,” he added.

Interruption

The Minister of Economy’s participation in the event held by the Industry Coalition was invaded by foreign internet users. The Minister’s speech was overlapped by songs and shouts in other languages – names in Cyrillic alphabet were displayed on the screens, in the event broadcast by the Zoom platform.