Overview

Brazil's National ICT Policy has went through some major changes over the past two decades.  These changes corresponded with the major political shifts in the government.  The following topics will cover the history and current status of Brazil's National ICT Policy.

History

In the early 1980s, Brazil, wishing to become a major player in the IT production market, created heavy import barriers. By raising tariffs over 100%, the government successfully removed competition from the Brazilian IT market. This was an effort to encourage growth inside the country, sometimes called an "infant industry". "The 1980s are referred to in the economic literature as the "lost decade," characterized by high inflation and economic stagnation. The lack of external finance and investment pushed the country into further protectionism in order to keep a trade surplus." (20)

In the early 1980's Brazil and Taiwan had similar per capita income. In 1988 Taiwan opted for free trade while the Brazilian Congress imposed high tariffs to protect its infant electronic industry. Over the years, Taiwan has flourished and Brazil's electronic industry was destroyed because the high tariffs kept investment out of Brazil.

By the early 1990s, Brazil was far behind the Information Age and decided to remove the strict tariffs. The period that was lost left Brazil struggling to compete with the rest of the world in technological innovation. The Information Technology products being produced in the country were antiquated when compared to the products being sold in the rest of the world. Every year that passed, Brazil was falling further behind in technological progress.

Supporters of this policy do not argue that the companies created inside of Brazil could not compete with the "Asian Tigers".  However, the supporters do believe that the major investment into the Information Technology industry by the government was well worth it.  Even if the country did not succeed in becoming as large as the Asian markets it did see some investment and growth from that period.

At the time, the infant industry theory was a common solution to creating an attractive industry inside a country.  A few Asian countries, such as Taiwan and Singapore, took the opposite approach.  Today, it is very clear that Taiwan and Singapore are ahead of Brazil in the technology production market. Today the after effects can still be seen. (20)

Encouraging Growth

The Brazilian government has learned from their mistakes. Today, the Brazilian government has been working to remedy the problems it created two decades ago.  Liberalization has been working to Brazil's benefit for over ten years now.  With continued investment in the technology industry Brazil will continue to benefit from internal research.

The government has put into place many laws that are meant to help technological innovation inside of the country. An example of this is the (Programs for Industrial and Technological Development) PDTI.  The PDTI is a tax incentive for companies wishing to start research in the technology field. The PDTI gives the following incentives: reduction of income taxes, exemption from the IPI (tax on manufactured goods) for items used for technological development, accelerated depreciation, accelerated amortization, and the deduction of royalties. (25)

Tariffs have been lowered but were still high in 1996 at 12%, down from 105% at its highest in 1990. Today, Brazil's tariffs are closer to the rates of the United States and the European Union.

Several national plans for science and technology were designed and implemented through the 1970's and 1980's, for graduate training and research and technology-intensive activities. The worsening economic crises in the 1980's resulted in net reductions in funding allocated to science and technology and the sector as a whole lost some of the strategic priority role it had been previously given.

The establishment of the Ministry of Science and Technology in 1985 aimed at reversing the lagging technological advancement, and it was also a milestone in the creation of a venue for wide-ranging dialogue between the federal government and the science and technology community. The Ministry's creation also demonstrated the Brazilian government's commitment to investing in Research & Development (R&D), and devising and implementing policies based on a science and technology strategy that serves the needs of Brazilian society while increasing the country's competitiveness in a changing global economy.

Sources:

(20) “Center for Research on Information Technology and Organizations”, University of California , Irvine , http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1073&context=crito . 1999.

(21) Lapper, Richard. “Further to Travel on Road to Recovery”, Embassy of Brazil , http://www.brazil.org.uk/page.php?cid=428

(22) “Integrated National Policy for the Amazon Region”, Embassy of Brazil , http://www.brazil.org.uk/page.php?cid=498&offset=9 .

(23) “Lula Promises Poverty Relief and Stability”, The Guardian , http://www.guardian.co.uk/brazil/story/0,12462,821302,00.html . October 29, 2002.

(24) LaTorre, Fernando. “The Importance of the New Civil Code for Civil Society in Brazil”, International Journal of Not-for-Profit Law , http://www.icnl.org/journal/vol4iss23/cr_lac.htm .

(25) “Legal Aspects of Doing Business in Brazil”, Demarest and Almeida , http://www.lexmundi.com/publications/INTL_Guides/guide-brazil.pdf . September 2001.

(26) “Policy”, Brazilian Embassy in Washington , http://www.brasilemb.org/tech3.shtml .

(27) Meyer-Stamer, Jorg. “New Departures for Technology Policy in Brazil”, German Development Institute , http://www.meyer-stamer.de/1995/bratech.htm . 1995.

(28) "Brazil: Trade Barriers", Singapore Abroad, http://www.singaporeabroad.org.sg/html/knowmkt.asp?cid=30&topic=92.