Brasil Maior Plan

The Brasil Maior Plan (PBM)[1],  announced in August 2011, joins and articulates the Federal Government’s industrial policy efforts for the 2011-2014 period, with a focus on stimulus to innovation and competitiveness of Brazilian industry. The PBM continues advances obtained through the Industrial, Technological and Foreign Trade Policy (PITCE) (2003-2007) and the Production Development Policy (PDP) (2008-2010).

This legacy includes formulating and implementing systemic and sectorial policies, especially within the context of reacting to the damaging effects of the international financial crisis, which are the cases of the Investment Maintenance Program (PSI) and tax incentives on fixed assets and durable goods.

The institutional aspects are also noteworthy, and relate to the State’s mobilization capacity, its interaction with the business sector and society, and the establishment of follow-up and assessment structures for implemented policies. The PBM integrates instruments from several Federal Government ministries and agencies, whose initiatives and programs are joined in an integrated and comprehensive effort to foster national production as well as generating jobs and income in the country.

The BNDES’ institutional performance

The BNDES participates in the Executive Group[2],  a body responsible for consolidating the PBM programs and efforts, as well as for monitoring the results, advising the Managing Committee[3];  and for the National Industrial Development Committee (CNDI)[4],  an agency linked to the Presidency of the Republic, with the participation of civil society, which establishes the general PBM strategies, as shown in the following image:

Management System of the Brasil Maior Program

Click on image to enlarge it.

Source: Elaborated by the BNDES, based on data from Brasil Maior: innovate to compete, compete to grow – Plan 2011/2014, p. 32.

In sectorial terms, the 19 executive committees and competitiveness councils are grouped into five blocks of production systems. The BNDES participates in all the committees, either as a coordinator, vice coordinator or a participant.

The launch measures

The plan established an initial set of 35 measures[5], especially of a systemic nature, which will be supplemented throughout the 2011-2014 period, based on dialog with the production sector. The following are highlighted:

  • tax relieve for investments and exports;
  • expansion and simplification of financing for investments and exports;
  • increase in resources for innovation;
  • improvement of the innovation regulatory framework;
  • stimulus to the growth of micro and small businesses;
  • strengthening of commercial defense;
  • creation of special regimes to add value and technology in production sectors; and
  • regulation of the governmental purchasing law to stimulate the country’s production and innovation.

The BNDES has contributed a total of eight measures, all of which were implemented:

  • ISP extension until December 2012;
  • Expansion of cash flow for MSMEs (BNDES Progeren);
  • Re-launch of the BNDES Revitalization Program (Revitaliza);
  • Creation of the BNDES Qualification Program;
  • Pre-approved credit for business innovation plans;
  • New resources for Finep (R$ 2 billion);
  • Expansion of sectorial programs; and
  • Creation of a program for the Climate Fund (MMA).    

These measures were developed into the following efforts:

The BNDES’ contribution to the Brasil Maior Plan
Actions Objective
BNDES Credit Limit
  • Inclusion of support for investments in research, development or innovation.
Revolving credit for the financial support of companies or economic groups, which represent low credit risk, earmarked for current investments in their respective sectors of operation, as well as investments in research, development and innovation.
Creation of the BNDES P&G Program Contribute to the development of the Goods and Services Supplier Chain related to the oil and natural gas sector (P&G).
The BNDES Progeren Revision
  • Extension of the term in effect until December 31, 2012;
  • Provision increase of R$ 7 billion;
  • Inclusion of beneficiaries;
  • Extension of the financing term
Increase production, jobs and salaries by means of financial support for working capital.
Creation of the BNDES Qualification Program
  •  Promote the implementation, expansion, modernization and, as a priority, the increase in the number of school openings that offer initial professional training and continuing education courses, high school level technical and technological education;
  • Support infrastructure implementation and modernization projects aimed at Research, Development and Innovation, in the aforementioned institutions, which have the objective of solving technological bottlenecks in specific areas of knowledge.

Re-launching of the BNDES Revitaliza

  • Support the revitalization of Brazilian companies that operate in segments that have been affected negatively by the current international economic situation, giving priority to adding value to the domestic product, adopting more efficient production methods, strengthening company brands and expanding the insertion of Brazilian goods and services in the international market.
The BNDES Procaminhoneiro (Pro-Trucker)
  • Extension of expiry date until December 31, 2012.
Financing for the acquisition of trucks, chassis, tractor trucks, trailers, semi-trailer trucks and truck beds, new or used, made in Brazil.
The BNDES Finame Components
  • Extension of expiry date until December 31, 2012.
Acquisition of parts and components, made in Brazil, for machinery and equipment in their production phase or under development and technological services related to the production or development of machinery and equipment.
  • Extension of expiry date until December 31, 2012.   
Stimulate the production, acquisition and export of capital goods.
Creation of the Climate Fund Program Support the implementation of undertakings, the acquisition of machinery and equipment and technological development related to reducing greenhouse gas emissions and adapting to climate change and its effects.
Changes to the BNDES Operational Policies
Establish as non-eligible items: the  acquisition of imported goods with no  domestic manufactured equivalent (except for machinery and equipment) and the expenses incurred from internalizing imported goods with no  domestic manufactured equivalent (except for machinery and equipment);
  • Establish that the aforementioned items will be supported by means of market cost references;
  • Establish, in the Imports of Capital Goods financing line, an annual limit of US$100 million and establish a maximum financing value of US$ 3 million, per beneficiary, every 12 months.

Encourage local content.

Resources for innovation
  • An increase of R$ 2 billion in the BNDES’ credit to expand the Finep portfolio in 2011.
Expand resources allocated to support innovation projects.

The BNDES’ disbursement to the Brasil Maior Plan (PBM)

The BNDES plays an important role in financing investments in the Brasil Maior Plan’s (PBM) programs and in achieving strategic goals – fixed investment, professional qualification, innovation, diversification of exports, and expanding added-value, among others. In 2011, the BNDES’ support for sectors in the PBM (agriculture and cattle-raising, industry, trade and services) accounted for 86% of the BNDES’ disbursements. Of these, some 55% was allocated to Mechanical, Electro-electronic and Health Systems (Block 1 of the PBM[6]), which encompasses the sectors with greater capacity to transform the production structure due to their strength in disseminating innovation and in inter-sectorial linkage. In the case of strategic objectives, the support for fixed investment was responsible for approximately 70% of releases, and other knowledge-intensive sectors (high and medium-high technology, in the OCDE classification) for 62% of disbursements[7].

1. Brasil Maior Plan: para um novo site

2. The Executive Group comprises seven agencies: MDIC (which coordinates it), the Chief of Staff’s Office, Ministry of Planning (MP), Ministry of Finance (MF), Ministry of Science and Technology and Innovation (MCTI), the Brazilian Industrial Development Agency (ABDI), the BNDES and Finep.

3. The Management Committee comprises the heads of five ministries: Ministry of Industry and Foreign Trade Development (MDIC) (which coordinates it), the Chief of Staff’s Office, Ministry of Finance, Ministry of Science and Technology, Brazilian Industrial Development Agency (ABDI), Ministry of Planning.

4. The National Industrial Development Committee (CNDI) comprises 13 Ministers, the President of the BNDES and 14 representatives from civil society.

5. The list with 35 measures can be found at para um novo site

6. This number includes the acquisition of capital goods (FINAME) by sectors from other blocks.

7. This number includes the following sectors: oil & gas and shipping, health sector, automotive sector, aeronautics and defense sectors, capital goods (including FINAME as a whole), electro-electronics/TICs, chemical-petrochemical, renewable energies and HPPC.