A new economy for the Amazonas: Manaus Free Trade Zone and - - PowerPoint PPT Presentation

A new economy for the Amazonas: Manaus Free Trade Zone and Bioeconomy

São Paulo, October 2019

A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

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OBJECTIVE: PRESENT ALTERNATIVES AND OPPORTUNITIES FOR DIVERSIFICATION OF THE AMAZONAS'S ECONOMIC ACTIVITY

A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

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STRUCTURED MODEL

• A. DINAMIZATION OF LOCAL

INDUSTRIAL PARK AND CURRENT MODEL

• B. USE OF THE POTENTIAL

BIODIVERSITY, IN A SUSTAINABLE WAY

• C. SCIENTIFIC, TECHNOLOGICAL

DEVELOPMENT AND INNOVATION ORIENTED

• D. ECONOMIC DECENTRALIZATION AND

GENERATION OF SOCIAL AND ENVIRONMENTAL GAINS

OPPORTUNITY AXES

BIOECONOMY DIGITAL TRANSFORMATION ECONOMY CENTER ECOTOURISM FISH FARMING

A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

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Visions for the Future

AMAZON FURNITURE SCANDINAVIA MANAUS: BIOECONOMY SILICON VALLEY

MANAUS: LIMA OF AMAZON GASTRONOMY MANAUS: PARIS OF ECOTOURISM GENERATION OF GREEN JOBS

MANAUS: ECOLOCIGAL FASHION MILAN PROTECTED FOREST AMAZONAS WITHOUT POVERTY SUSTAINABLE AND SHARED WEALTH

A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

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Contents

Part 4: IMPACT Estimates Part 1: CHALLENGE Identification Part 2: OPPORTUNITIES Identification Part 3: CRITICAL SUCCESS FACTORS Identification

A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

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PART 1: CHALLENGE IDENTIFICATION

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Part 1: Challenge identification

VULNERABILITIES

• f Manaus Free

Trade Zone SOCIAL VULNERABILITY

PIM integrated economic development model, based on innovation and sustainable use of local biodiversity,

• ffering business activities

diversification.

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SOCIAL VULNERABILITY

• A. Extreme

poverty

564 thousand

people in the Amazonas live in extreme

• B. Sanitation

water sewage

There are

194,000

extremely poor in Manaus poverty equivalent to

14.4%

• f the population

20.3%

• f Amazonas

population without access to water

90.6%

• f

Amazonas population do not have access to sewage collection

MANAUS HAVE ONE OF THE WORST I NDEXES FROM THE COUNTRY: 88.9% of population without sewage collection

Source: IBGE Source: Trata Brasil

This index for:

Northern Region: 89.76% Brazil: 47.64%

Extreme Poverty:

Northern Region: 11.8% Brazil: 7.4%

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THE CURRENT MODEL OF REGIONAL INCENTIVES IS INEFFECTIVE

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INEFFICIENT ALLOCATION OF FACTORS OF PRODUCTION

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DISTORTS MARKETS AND PRODUCTION CHAINS Companies and investments are moved to regions offering incentives, not considering comparative advantages and competitiveness factors. Costs of logistics, supply chain development, access to intermediate and final goods generate market distortions.

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THERE ARE NO CONDITIONALITIES AND GOALS

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PATH DEPENDENCE There are no commitments on productivity, employment, market access, and technology for the private sector. For the public sector, social and fiscal goals also do not exist. Little encouragement for beneficiary sectors and companies seek independence from incentives and subsidies.

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AMAZONAS MESOREGIONS

Intraregional imbalance Population and economic concentrations

Mesoregion Population GDP Amazonian Center 78.7% 92.6% Amazonian North 3.4% 1.0% Amazonian Southwest 9.9% 3.3% South Amazonian 8.1% 3.1% Source: IBGE Geographic Support Elaborated from IBGE map base CAPTION

AMAZONIAN CENTER AMAZONIAN NORTH AMAZONIAN SOUTHWEST AMAZONIAN SOUTH

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INTRAREGIONAL IMBALANCE

Municipal GDP: highlights in the Amazonas, 2016

Municipality Mesoregion GDP (BRL millions) % of GDP % Accumulated Main Economic Activities 1 Manaus Amazonian Center 70.3 thousand 78.97% 78.97% Manaus Industrial Pole 2 Itacoatiara Amazonian Center 2.1 thousand 2.31% 81.28% Wood and Brazil nuts exploitation 3 Manacapuru Amazonian Center 1.2 thousand 1.40% 82.67% Agriculture, fishing, and tourism 4 Coari Amazonian Center 1.1 thousand 1.27% 83.95% Natural gas 5 Parintins Amazonian Center 1.0 thousand 1.15% 85.10% Tourism, agriculture, and livestock 6 Tefé Amazonian Center 650.3 0.73% 85.83% Fish, tourism and oil exploration 7 Codaiás Amazonian Center 648.1 0.73% 86.56% Tourism 8 Iranduba Amazonian Center 636 0.71% 87.27% Vegetable producers, beyond bricks and tiles 9

• Pres. Figueiredo

Amazonian Center 546.2 0.61% 87.89% Ecotourism, agriculture and mineral extraction 10 Humaitá South Amazonian 493.7 0.55% 88.44% Farming and plant extractivism 11 Manicoré South Amazonian 477.4 0.54% 88.98% Agricultural production (banana, watermelon, and flour) Source: Profile of Municipalities, IBGE

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VULNERABILITIES OF MANAUS FREE TRADE ZONE

A

PRODUCTIVITY AND COMPETITIVENESS SCHEDULE INDUSTRY 4.0 TRADE OPENING VALUE CHAIN INTEGRATION DIGITAL CONNECTIVITY EXPORT ECONOMIC, SOCIAL AND FISCAL FEASIBILITY OF THE CURRENT PIM RISK MODEL REFLECTION ON COST x BENEFIT FROM CURRENT MODEL

B

TAX AND TRIBUTARY CONTEXT FISCAL STRANGULATION NEED FOR DECREASE IN SUBSIDIES FOR PRODUCTION REVIEW OF REGIONAL DEVELOPMENT MECHANISMS

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ELEMENTS FOR GOOD REGIONAL STIMULUS POLICY

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FOCUS ON RESEARCH AND DEVELOPMENT - R&D

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GENERATES INNOVATION An environment conducive to the integration

• f

universities, research institutes, and industry for scientific and technological development. Innovation in business models, processes, products, market approaches, based on the use of inputs existing in each region and, in particular, those of local biodiversity. PRODUCTIVE CHAINS INTEGRATION

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FOCUS ON COMPETITIVENESS

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SHOULD NOT BE AN ISOLATED STATE ACTION Companies are qualified and competitive to integrate global value chains, generating exports, and internationalization of businesses. Companies are stimulated and continuously seek to seek continuous competitiveness increase by the use of new technology, process, or products. It should not be the only stimulus policy. It should be part of a set of measures to stimulate technological, productive, industrial, and social developments, inducing the creation of an innovation ecosystem that brings together the three federative levels, companies, and academia.

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PART 2: OPPORTUNITIES IDENTIFICATION

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Opportunities identification

BIOECONOMY ECOTOURISM

DIGITAL TRANSFORMATION ECONOMY CENTER

FISH FARMING

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1 - Bioeconomy

OVERVIEW OPPORTUNITIES

Species: Brazil holds 20% of the world's known species. In

terms of endemic species - those that exist only in our territory

• , the Amazon has 24.5% of the fauna and 11.2% of the

Brazilian flora. The Amazon Rainforest holds one-third of all living species on the planet. It is estimated that there are more than 5 million plant species in it, from which only 30,000 have been identified* .

Area: Açaí, Brazil nut, and cocoa are produced in

five states from the Northern Region in a much smaller area than that used for soy production.

Biodiversity: The Amazon biome is home to a still little known

and little used biological diversity. Usage is concentrated in the food and beverage sector.

Amazonas Planning Secretariat and SUFRAMA

see the bioeconomy as strategic.

Comparative advantage in the bioproducts market. More efficient production expansion, which requires less

land area for income generation.

Diversity can be explored and used by the Brazilian industry.

The main sectors benefited are food, beverages, and

cosmetics. Expansion potential for sectors of high economic importance,

such as textiles, energy, and pharmaceuticals, which can exploit elements along their productive chain.

High economic potential, due to its relationship with environmental preservation and for being able to boost local communities.

*Source: Brazilian Biodiversity Information System (SiBBr) from the Ministry of Science, Technology, Innovations, and Communications (MCTIC).

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2 - Digital transformation

economy center

OVERVIEW OPPORTUNITIES

Priority: Considered a priority by the

Amazonas Planning Secretariat. The segment can represent 10% to 12%

• f state GDP in 10 years.

Powered by Manaus Digital Pole and Rio Negro

Technology Pole (still in project).

I nformatics Law: Nearly BRL 800 million are generated

by Informatics Law (destined for RD&I).

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3 - Ecotourism

OVERVIEW OPPORTUNITIES

BRAZI L: PERFORMANCE I N 2018 Direct jobs: generation of 80 thousand. I ncome: BRL 2.2 billion in 2018. GDP added value: BRL 3.1 billion. Sales: BRL 8.6 billion. AMAZON: PERFORMANCE I N 2018 Visitors: 41 thousand. Direct and indirect impact: 300 thousand families. Average household income: BRL 7,900 per family. ECOTOURI SM Growth: 15-25% per year worldwide.

I n Brazil: Represents 16% of tourism as

• pposed to 10% in the world.

AMAZON PRESERVATI ON

According to Amazonas Cluster Turismo, tourist areas had

almost zero fire rates in 2018.

Source: Ministry of Tourism Note: In this study, we use as a proxy for Tourism the activity “accommodation and food services.” The number of visitors considers all types of tourism.

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4 – Fish farming

OVERVIEW OPPORTUNITIES

More efficient land use than for cattle breeding. One ton of fish is produced in 3% of the area needed to produce the same amount of beef. Much lower GHG emissions

Fish is healthier than beef.

The fish-based development model is more compatible with the Amazon ecosystem.

Main animal protein in production and global trade. 58% of the fish consumed in the state are

purchased from Rondônia/ Roraima.

• In the case of tambaqui, this percentage is 90% .

I ndustrial chain for fish elements- Maximum utilization of

fish by the industry - processed food, flour, oil, leather, biopharmaceuticals, etc.

Gastronomy and cooking.

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PART 3: IDENTIFICATION OF SUCCESS CRITICAL FACTORS

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Competitiveness factors

• A. PRODUCTI VE EFFI CI ENCY B.PUBLI C MANAGEMENT EFFI CI ENCY C I NNOVATI ON

Increased productivity and reduced production costs: labor market, financing, tax system, and physical infrastructure. Control of expenses; macroeconomic predictability of interest and exchange; higher investment rates; environmental sustainability. Framework for incentives to innovation, modernization of business management, expansion of technology-intensive services.

• D. LEGAL SECURI TY
• E. MARKET EXPANSI ON F. SOCI AL I NFRASTRUCTURE

Judicial efficiency and bureaucracy reduction. Integration in value chains, both local and global. It includes, among others, health, housing, transportation, and sanitation, and is based on education (primary and professional).

Considering the opportunity sectors: BI OECONOMY DI GI TAL TRANSFORMATI ON ECONOMY CENTER ECOTOURI SM FI SH FARMI NG

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1 - Bioeconomy

INFRASTRUCTURE

Decentralized logistics solution plan

(ports, barges, distribution centers).

Credit lines for integrated logistics (river, land, and air). I nnovation in air freights for large logistics (UAVs, airships, and

drones). Creation of the Manaus Furniture Pole, integrated to PIM (combining modern production techniques and bold design, aiming at commercialization in the foreign market of high standard furniture) (50 companies). Creation of credit line for modernization of sawmills. Creation of the Manaus Biopharmaceutical Pole, which will ensure Brazil's qualified insertion in the industry of the future (10 Biotech companies). Creation of Food Tech Pole based on plants and insects of the Amazonian biodiversity, using the highest molecular biology techniques (20 companies). Creation of “Engineered” Tropical Wood Production Pole for use in green building, providing forest/sawmill/industry integration (5 companies). Creation of Concentrate for Cosmetics Pole from Amazonian biodiversity (6 companies). Decentralized Conversion centers for processing.

Analysis of the critical state of the ports and berths, as well

as the inadequate draft of the municipal port facilities.

Absence of bank branches in most cities. Fintechs could play

some role in the development of bioeconomy in the state.

Aerodromes not approved. How to enable runaways for drone

testing?

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1 - Bioeconomy

HUMAN RESOURCES

School for sustainable business (SEBRAE da Floresta). Transform Hotel Tropical de Manaus into a school hotel. I nclude requalification package for young people:

high school, technical, electronic.

Creation of Bioeconomy course at universities in

the state of Amazonas.

Training in Entrepreneurship and Governance of Process (accounting, formalization of associations,

formalization of community companies, Basic IT, among others) (SEBRAE da Floresta).

Training for innovation of wood extraction and processing processes (training of professionals). Training for construction industry professionals

for the handling of “engineered” tropical wood.

Training of specialized designers for the use of

“engineered” tropical wood in the construction industry.

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1 - Bioeconomy

LEGISLATION/REGULATION

Assuring of the necessary licenses from the environmental,

sanitary, and commercialization control and inspection bodies.

Obtainment of certificates (FSC, Fair Trade). Records of origin and biogenomics designation. Elimination of red tape from research authorization processes and access to genetic

resources.

Elimination of red tape in authorization processes involving access to genetic resources. Tax incentives for the use of “engineered” tropical wood in the construction industry to increase the competitiveness

• f the sector's companies in the construction industry market

(BRL 380 billion in Brazil, or 5.5% of GDP).

Regulate the use of “engineered” tropical wood in the Construction I ndustry to meet the requirements of

insurance companies. Creation of tripartite governance (governments, private sector, academic sector, and think tanks) to structure an

innovation ecosystem. Strengthen licensing, provide transparency in the

• rganization of the process of licensing.

Strengthen fiscalization.

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1 - Bioeconomy

RESEARCH AND DEVELOPMENT

ABC Dynamization (Amazon Biotechnology Center) to become the forest ITA. Double the annual research budget of the National Amazon Research Institute (INPA). Manaus, as the first bioeconomy research hub, integrated with the world's leading research centers (London's

Kew Garden, New York's Botanical Garden, Germany's Mark Plank Institute), with specific knowledge of tropical forest ecosystems. Creation of R&D for the use of “engineered” tropical wood, on an industrial scale, in the Green Building

structural systems, which represent 25% of the cost of the work (the best delamination technology, termite control,

humidity control, and fire resistance). Creation of R&D for the use of forest products in the fashion and textile industry. Creation of R&D for the use of Amazonian fibers in the automobile and green plastics industry.

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1 - Bioeconomy

RESEARCH AND DEVELOPMENT

Creation of R&D for the use of plants and insects of

Amazonian biodiversity on food tech.

Creation of R&D for studies on the economic

impacts of biodiversity, including, among others:

• Studies that identify and detail the share of

biodiversity in shaping the value production chain, employment, and exports.

• Studies to measure and classify other forms of

biodiversity valuation, including the non-use value and associated indirect values and their contribution to the creation of local wealth.

• Research to measure broadly and at the same time

disaggregated the economic importance of biodiversity in the states and in the country, including the biodiversity already in use, the one being exploited and the one that can be sustainably utilized in the future. Creation of R&D for the use of Amazonian biodiversity

products in the cosmetics industry.

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1 - Bioeconomy

MARKETING

Creation of the brand made in Amazon Brazil. .

Participation in civil engineering events to publicize the

use of “engineered” tropical wood.

Participation in food events in Brazil and worldwide

(such as the Anuga Fair, in Germany) to promote products from the Amazon Forest (food tech and fish).

Participation in fashion events in Brazil and

worldwide to promote products from the Amazon rainforest (São Paulo Fashion Week, Fashion Week in Milan, Fashion Week in New York).

Participation in furniture and design events in Brazil and around

the world to promote products from the Manaus Furniture Pole.

Participation in cosmetic events in Brazil and worldwide to

promote products from the Amazonian biodiversity. Creation of advertising campaigns for the dissemination of food

products obtained from Amazonian biodiversity in Brazil and

worldwide (promoting the brand and the concept). Creation of advertising campaigns for the dissemination of

cosmetic products from the Amazonian biodiversity.

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2 - Digital transformation economy center

INFRASTRUCTURE HUMAN RESOURCES

Launching of a geostationary satellite* to boost broadband access throughout the Legal Amazon, mainly benefiting its remote regions (digital inclusion), with HQ in Manaus. Utilization of Manaus Digital Pole R&D resources to encourage/attract the creation of a software and

hardware industry (UAVS, biosensors, radars, among

• thers) integrated into the Amazon remote monitoring

system, primarily to protect its ecosystems. PPP program to enable the production of clean and

renewable energy for the Digital Pole and Datacenters based in Manaus Free Trade Zone. Entrepreneurship Training. Staff training for Manaus to be a hub for software development and digital economy services.

*Note: Other alternatives are also being considered, such as launching a medium Earth Orbit satellite (MEO) - or the constellation - and adopting a hybrid system, including underwater fiber optic cabling.

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2 - Digital transformation economy center

LEGISLATION REGULATION MARKETING RESEARCH AND DEVELOPMENT

Ensure that the R&D resources of the

I nformatics Law are used to boost

innovation at the Manaus Digital Pole. Creation of the Amazônia Digital

brand.

Participation in the main

technology fairs worldwide to

promote digital products from the Amazon. Creation of tripartite governance (governments, private sector, academic sector, and think tanks) to structure an

innovation ecosystem in I nformation and Communication Technology.

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3 - Ecotourism

INFRASTRUCTURE HUMAN RESOURCES

Decentralized logistics complex for the establishment of

five regional Ecotourism hubs (airports, ports, hotels,

and broadband).

Five logistics hubs for tourist reception (Ecotourism

and adventure, fishing tourism, scientific tourism, ethnic tourism, and business tourism). PPP Program for enabling concession of parks -

forests and conservation areas. Concession of Manaus International Airport and

expansion from 5 to 15 fingers.

I nfrastructure upgrade at Manaus international airport to expand passenger reception capacity from 2.5

to 5 million.

School of sustainable ecotourism (SEBRAE da Floresta). Training in Ecotourism Entrepreneurship and Process Governance (accounting, formalization of associations,

formalization of community companies, basic IT, among others) (SEBRAE da Floresta).

Training in haute cuisine based on Amazonian cooking and

ingredients (Manaus will be the Lima of Amazonian fish).

Language training: English and Spanish.

Support for obtaining licenses to vessels' pilotage.

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3 - Ecotourism

LEGISLATION REGULATION

Regional aviation stimulation policy.

Obtainment of the sustainable

ecotourism certificate. Policies to combat predatory and

sexual tourism.

MARKETING

Creation of the Amazon Ecotourism

brand. Participation in the main tourism fairs worldwide to

promote ecotourism in the Amazon. Conducting advertising campaigns in São Paulo, Rio de Janeiro, London, Paris, Shanghai, and Hong Kong to publicize the state of Amazonas as a destination for ecotourism.

RESEARCH AND DEVELOPMENT

Identification of specific niches for developing scientific ecotourism in the state of Amazonas.

Note: Brazil spends BRL 40 million per year on tourism

• promotion. Colombia uses U$ 100 million, and Ecuador

allocates U$ 60 million to leverage tourism.

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4 – Fish farming

INFRASTRUCTURE HUMAN RESOURCES

Decentralized cold chain logistics complex (refrigerated

warehouses and containers).

Five logistics hubs of fishing reception in the state. Credit line for fishing farms.

Creation of an Amazonian fish-based industrial park for

food and biopharmaceuticals processing and production.

• Premium food for hotel chains and upscale restaurants

around the world and food service.

• Meat processing plant, feed factory, incubator, fish farm,

and offal processing plant).

• Investments to ensure stability in the supply of electricity
• n fishing farms to prevent production losses.

School of sustainable business (SEBRAE da Floresta). Training in Entrepreneurship, Process Governance

(accounting, formalization of associations, formalization of community companies, basic IT, etc. (SEBRAE da Floresta).

Training for innovation in fishing processes, cultivation, and

fish processing (EMBRAPA do peixe).

Training in haute cuisine based on Amazonian cooking and

ingredients (Manaus will be the Lima of Amazonian fish). Support for obtaining licenses to vessels' pilotage.

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A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

4 - Fish farming

LEGISLATION RESEARCH AND REGULATION MARKETING DEVELOPMENT

Reduced bureaucracy in obtaining the necessary licenses from

environmental, sanitary, and commercialization control and inspection bodies.

Obtainment of the certificates (Fair

Trade).

Origin designation certificate. Elimination of red tape from

research authorization processes and access to genetic resources. Creation of the Pescado da

Amazônia brand.

Conducting culinary festivals with

Amazonian fish and ingredients in

Manaus, São Paulo, New York, London, Berlin, Shanghai, and Hong Kong, and Tokyo.

ABC Dynamization (Amazon Biotechnology Center) to create research

lines related to Amazonian fish that will make it the first research hub on the theme in the world, integrated with the central international scientific institutions.

R&D for the use of Amazonian fish on an

industrial scale in foodservice and premium food.

Creation of R&D for the use of Amazonian fish

leather in the fashion industry.

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A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

PART 4: IMPACT ESTIMATE

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A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

Impacts on the Economy

• f AM over 10 years

Opportunities CURRENT production* DEMAND Annual Growth * * Increase in Production Increase in Wage Income Direct Job Creation Indirect Job Creation Induced Job Creation Total Job Creation

Bioeconomy BRL 3.1 billions 10.0% BRL 9.7 billions BRL 1.5 billion 37,413 9,021 13,374 59,809 Digital Transformation Economy Center BRL 1.1 billions 11.0% BRL 3.9 billions BRL 770.3 millions 9,292 29,318 34,863 73,472 Ecotourism BRL 1.7 billions 3.5% BRL 1.3 billions BRL 541.5 millions 45,194 5,586 11.681 62,461 Fish farming BRL 72.1 millions 10.0% BRL 169.4 BRL 69.6 millions 8,356 995 1,432 10,783 TOTAL BRL 5.97 billions

• BRL 15.1 billions

BRL 2.9 billions 100,255 44,921 61,350 206,525

Impact on GDP: 16.96% Rising Wage Income per Job: BRL 13,887.12 Rise from Current Number of Formal Employment * * * : 35.30% Source: Ministry of Tourism Note: In this study, we use as a proxy for Tourism the activity “accommodation and food services.”

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A new economy for the Amazonas State: Manaus Free Trade Zone and Bioeconomy

Forecast of investments in physical infrastructure w ith low social and environmental impact

Geostationary satellite* to

boost broadband access 5 logistics hubs for tourist reception

Manaus I nternational Airport

(a new terminal with 10 fingers) Decentralized cold chain logistics complex

Engineered tropical wood

production pole for use in the construction industry (5 companies)

BRL 3 billion BRL 500 million BRL 300 million

Manaus Furniture Pole I ndustrial park for food and biopharmaceuticals processing

and production from Amazonian fishes 5 logistics hubs for fishing reception

Manaus Biopharmaceutical Pole

(10 biotech companies)

Food Tech Pole based on plants

and insects from Amazonian Biodiversity (20 companies)

BRL 1 billion BRL 50 million BRL 500 million

Additional investments: Marketing, Qualification & Training, R& D, Management & Entrepreneurship

Source: own preliminary estimates based on analogous cases. *Note: Other alternatives are also being considered such as launching a medium Earth Orbit satellite (MEO)

• or the constellation - and adoption of a hybrid system, contemplating underwater fiber optic cabling.

BRL 500 million BRL 300 million BRL 500 million BRL 500 million

206,000 DIRECT/INDIRECT JOBS

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Opportunities - economic diversification and sustainable development

OPPORTUNITY AXES

BIOECONOMY DIGITAL TRANSFORMATION ECONOMY CENTER ECOTOURISM FISHING

BRL 7.15 billions

in investments in physical Infrastructure (public and private resources)

Creation of

218

thousand

jobs

Considering sectors involved and investments to be made - direct and indirect

Over 10 years

12 THOUSAND JOBS DURING INFRASTRUCTURE WORKS

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ILLUSTRATIVE CASE - Fish Farming

Global production

I s the Amazonas capturing this window of

• pportunity?

58%

• f fish for

consumption in Amazonas are acquired from Rondônia and Roraima In the case of tambaqui, this percentage is

90%

Beef and veal Sheep meat Aquaculture fish Swine Fish Chicken Catch fish Source: OECD-FAO Million Tons

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Complementarity of identified economic

• pportunities

Contributions to the PIM integrated economic development model based on innovation, job creation and sustainable use of biodiversity

BIOECONOMY ECOTOURISM DIGITAL

TRANSFORMATION ECONOMY CENTER

FISH FARMING R&D, sustainability,

exploitation of local inputs, and insertion in the Global Production Chains.

Employment (labor-

intensive, strongly linked to

• ther economic activities).

Youth employment, as well

as support to traditional sectors and Bioeconomy (digital revolution).

Reduction of social (income

generation) and intraregional (interiorization) inequalities.

MANAUS: LIMA OF AMAZON GASTRONOMY MANAUS: BIOECONOMY SILICON VALLEY GENERATION OF GREEN JOBS AMAZON FURNITURE SCANDINAVIA MANAUS: ECOLOGICAL FASHION MILAN SUSTAINABLE AND SHARED WEALTH

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FUTURE VISIONS

AMAZON WITHOUT POVERTY PROTECTED FOREST MANAUS: PARIS OF ECOTOURISM

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METHODOLOGICAL NOTES AND BIBLIOGRAPHICAL REFERENCES

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Interview s conducted

Adalberto Verissimo, Co-Founder of IMAZON. Alcimar Marques de Araújo Martins, Planning Assistant Superintendent at SUFRAMA. Alfredo Alexandre de Menezes Junior, superintendent of SUFRAMA. Alfredo Lopes, consultant at the Amazon State Industry Center - CIEAM. Ana Bastos, CEO of AMATA. Carlos Nobre, Climatologist. Carlos Schneider, Executive Director of the CERTI Foundation. Daniela Lerda, Coordinator of Climate and Land Use Alliance - CLUA. Denis Minev, economist and chief executive officer of the BEMOL group. Fabio Calderaro, Director of the Amazon Biotechnology Center. Guilherme Leal, businessman in the cosmetics sector. Ismael Noble, Biologist. Izabella Teixeira, former Minister of the Environment. Jessé Rodrigues dos Santos, Department of Economic Researches at SUFRAMA. João Tezza Neto, Original Trade Executive Director and IDESAM consultant. Jório de Albuquerque Veiga Filho, State Secretary for Planning, Development, Science, Technology, and Innovation of Amazonas. José Eduardo Fiates - General Superintendent of the CERTI Foundation. Marcos Daré, Director of the CERTI Foundation's Green Economy Center. Marcos Mueller, CEO of Darwin Startups. Mariano Cenamo, founder and director of New Business at the Institute for Conservation and Sustainable Development of the Amazon - IDESAM. Oskar Metsavah, Textile entrepreneur - Instituto E. Patry Marques Boscá, economist, master in Environmental Sciences and Sustainability in the Amazon (Federal University of Amazonas). Renato Mendes Freitas, Executive Secretary of Amazon Development. Tatiana Schor, Executive Secretary of Science, Technology, and Innovation of Amazonas.

Note: All of the individuals mentioned have participated in individual conversations, meetings, or dialogues with the responsible team. The inclusion of names does not represent support, validation, endorsement, or agreement with the proposal in whole or in part.

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References

• “A Zona Franca e a Conservação da Amazônia,” by Carlos Durigan, Director
• f the Amazon Program of WCS-Brazil (Wildlife Conservation Association).
• “Amazon Creative Labs and Rainforest Business School,” by Carlos Nobre

et al.

• “Amazônia – Por uma economia do conhecimento da natureza, ” Ricardo

Abramovay.

• “Amazônia: gastronomia, ingredientes e cozinhas”. Roberto Smeraldi,

June 2019.

• “Caminhos para o investimento sustentável na Amazônia: Oportunidades

para a aplicação dos incentivos fiscais da Zona Franca de Manaus”, prepared by PPA (Partners for the Amazon).

• “Forestry &Biomaterials Endowment Fund (FBEF),” an equity fund created

by USP's Luiz de Queiroz College of Agriculture, with resources management carried on by Estudos Agrários Luiz de Queiroz (Fealq), to boost knowledge in forest and biomaterial resource areas.

• “Importance of Knowledge-Intensive Economic Development to

Conservation of Biodiversity in Developing Countries,” Claudio Valladares-Padua (IPE).

• “Oportunidades de apoio a atividades produtivas sustentáveis na

Amazônia”. Carlos Valério Gomes, Christiane Ehringhaus, Claudia Martins Dutra, Eugênio Pantoja, Fabiano Toni, Johannes Schielein, Jorge Hargrave, Katia Carvalheiro, Luciana Rocha, Manuel Amaral Neto, Monika Röper, Viktoria Zipper, Waldemar Wirsig.

• “Pacto das Cidades Amazônicas,” signed in Manaus by

representatives of the Legal Amazon (16 municipalities and 16 entities), which proposes 12 (twelve) environmental measures.

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References

• “Peixes e o Futuro Sustentável da Amazônia,” by David G. Mcgrath,

deputy director of Earth Innovation, from Federal University of Western Pará (UFOPA).

• “Prioridade e Lacunas de Pesquisa & Desenvolvimento em Silvicultura

de Espécies Nativas no Brasil”, WRI Brazil - World Resources Institute.

• “Amazônia em Transformação” Program, of the Institute of Advanced

Studies of São Paulo (IEA/USP) and IMAZON.

• Project “Biopolis Amazonas,” of the Government of Amazonas.
• “Qual o impacto do desmatamento zero no Brasil? ”, prepared by

Instituto Escolhas.

• “Social Innovation by Tourism Strategy in the Western Amazon,” Sâmia

Laise Manthey Benevides, Flavio de São Pedro Filho, Maria José Aguiçar Madeira, Irene Yoko Taguchi Sakuno, Valeria Arenhardt, Mar 2018.

• Technology for Innovating Amazon's Fish-Farming Activity. Alexandre

Leonardo Simões Piacentini, Flavio de São Pedro Filho, Veronica Ribeiro da Silva Cordovil, Elvino Ferreira, Marcos Tadeu Simões Piacentini.

• The News Climate Economy Report. The Synthesis Economy
• Report. September 2014.
• Xingu: histórias dos produtos da floresta, VILLAS BOAS, André

J.A. et al, Ed. Instituto Socioambiental.

• Zona Franca de Manaus – Impactos, efetividade e
• portunidades. Coordinator Márcio Holland - Getúlio Vargas

Foundation (FGV) and São Paulo School of Economics (EESP).

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Glossary

Legal Amazon - It is an area that encompasses nine states of Brazil belonging to the Amazon basin. They are Acre, Amapá, Pará, Amazonas, Rondônia, Roraima, and part of the states of Mato Grosso, Tocantins, and Maranhão. Bioeconomy - It is a sustainable economy, which brings together all sectors of the economy that use biological resources (living things). This market seeks to provide solutions to some of the major social challenges: economic crisis, climate change, fossil resource substitution, food security, and population health. Biodiversity - It is the set of all species of living beings in the biosphere; diversity. Biopharmaceuticals - Also called biological medicines are medicines obtained from the use of genetically modified cells to produce therapeutic proteins. They are provided by the biosynthesis in living cells, that is, by the production of chemical compounds by living beings. Biochemistry - It is the interdisciplinary science that uses chemistry principles and methods in the investigation of transformations that occur in substances and molecules from living beings and their metabolic processes; biological chemistry, physiological chemistry. Biosensors - These are analytical tools that use a bioactive element and a transducer for biochemical substances detection/quantification in the most varied applications. In this work, we highlight the classifications, essential characteristics, and differences related to conventional analytical methods. Biotech - It is a science that uses living organisms or their products, such as bacteria or enzymes, to manufacture its medicines. ABC - Amazon Biotechnology Center. CERTI - Foundation Centers of Reference in Innovative Technologies. CLUA - Climate and Land Use Alliance. Critical success factors - The critical success factor is a management term for an element required for an

• rganization or project to achieve its mission. These are

key points that, when well executed, define and guarantee the development and growth of a company. Fairtrade Certification- Fairtrade Certification refers to the certification following Fairtrade criteria. It is a product certification system in which the social, economic, and environmental aspects of production are certified to Fairtrade Producer and Trader Standards. FSC Certificate - FSC stands for Forestry Stewardship Council. FSC is an international non-profit institution which gathers representatives of entities from around the world and is one of the only forest certification systems supported by significant bodies, such as WWF and Greenpeace. It is based on three equally important pillars: economic, environmental, and social. Phytotherapy - A phytotherapic medicine is that obtained from medicinal plants, where it is used exclusively derived from plant drugs, such as juice, wax, exudate, oil, extract, tincture, among

• thers.

Food Service - Covers the entire line of production and distribution of inputs, foods, equipment, and services to provide food services to people away from home. FoodTech - This is a term used when we use technology to improve agriculture, food production, supply chain, and distribution channel. FoodTech is any technology applied to the way

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we produce, sell, or serve food. Greenhouse Gases GHG - Greenhouse gases are molecules present in the earth's atmosphere that have the property of warming the atmosphere because they absorb part of the thermal radiation emitted by the earth's surface. The main

• nes are carbon and methane gases. Carbon dioxide or

carbon gas (CO) is secreted mainly by the use of fossil fuels (oil, coal, and natural gas) in human activities. Green Building - It is a building or any space or environment that is built thinking on social, environmental, and economic sustainability, from its conception, construction and throughout its operation. Hub - It is a physical space that gathers people to create transformative products and services, which will, in some way, impact society and bring benefits to the future, are used in a community way, as cities with common characteristics. IBGE - Brazilian Institute of Geography and Statistics. IDESAM - Institute for Conservation and Sustainable Development of the Amazon. Industry 4.0 - It is a recently proposed industry concept that encompasses the main technological innovations of the automation, control, and information technology fields applied to manufacturing processes. There were three industrial revolutions followed by the fourth revolution, or industry 4.0. Transformation industry - It is a term used to classify the production systems that transform one element into another, raw material into a good, differing from the agricultural production sector and the vegetable or mineral extraction

• industry. It includes all moments of industrial production.

ITA - Aeronautical Technological Institute. Engineered Wood - This is the result of the application of advanced technologies, chemicals, and production processes to certain woods that ensure high performance and allow engineered wood to be used in civil engineering. In Brazil, are mainly used as wood, pine and eucalyptus as a raw material for structure manufacture. R&D - Research and Development. PIM - Manaus Industrial Pole. PNAD - National Household Sample Survey is the survey conducted by the Brazilian Institute of Geography and Statistics (IBGE) on a sample of Brazilian households that, for having multiple purposes, investigates various socioeconomic society characteristics, such as population, education, work, income, etc. PPP - Public-Private Partners. RAIS - Annual Report on Social Information is a socioeconomic information report requested by the Ministry

• f Labor (today without ministry status

and linked to the Ministry of Economy) to legal entities and

• ther employers annually.

Basic sanitation - The set of services, infrastructure, and

• perating facilities for water supply, sanitation, urban

cleaning, urban drainage, solid waste, and rainwater management, as defined by Law no. 11,445/2007. Sanitation is the set of measures that aims to preserve or modify the conditions of the environment to prevent disease and promote health, improve the quality of life of the population, and the productivity of the individual and facilitate economic activity. Geostationary satellite - It is a communication satellite. They are named after being placed in an orbit above the equator such that the satellite has a period of rotation equal to that of planet Earth (24 hours). In Brazil, the first Geostationary Defense and Communications Satellite (SGDC), launched in space in May 2017, is an essential part

• f the National Broadband Plan (PNBL), created by the

federal government with the mission of universalizing high- speed Internet access to in Brazil. The satellite signal will serve to bring broadband internet to disconnected communities in the remotest corners of the country.

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Suframa - Superintendence of Manaus Free Zone

• is an autarchy linked to the Ministry of Development, Industry and

Foreign Trade (now Ministry of Economy) that manages the Manaus Free Zone - MFZ, with the responsibility of building a regional development model that uses sustainable natural resources, ensuring economic viability and improved quality of life for local populations. Think tank - Ideas lab, strategic office, thought center, or reflection center is an institution or group of investigative and reflective specialists to reflect on the most diverse subjects: economy, culture, technology, social policy. VANTS - Unmanned Aerial Vehicle. Also called remotely piloted aircraft or drone, it is any aircraft that can be controlled on 3 axes and does not require onboard pilots to be guided.

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ATTACHMENT

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About Regional Incentives:

Some points of analysis of current tax incentives in Brazil, shortcomings, elements for a good policy of regional stimuli, and examples of success in other countries.

• 1. The granting of tax incentives in the form of tax breaks for

companies that invest in research and development (R&D) has gained a good footing among developed countries. There are two examples in France and Japan, that support already represents over 70% of the set of instruments used by governments to fund innovation activities in the private sector. In the 2000s, this proportion was 20%.

• 2. Economist Ruud de Mooij, head of the IMF's tax policy

division, in an article released in early 2019, recommends that incentives be directed to technology-based start-ups rather than to established ones.

• 3. The OECD report, released in 2018, titled “Tax Incentives for

R&D and Innovation,” also suggests offering tax incentives to startups that need capital to invest in new technologies. It is common in Europe, including Germany. However, the OECD makes one crucial observation: these public incentives should not be the only way to promote R&D in the private sector;

• 4. International literature has highlighted that it is much better to

invest in education, infrastructure, and research institutions than

• ffering tax benefits for multinationals.

The idea is that education, infrastructure, and research institutions increase a country's ability to absorb new knowledge and encourage the transfer of technologies developed by advanced

• economies. In the case of Brazil, we have to take advantage of the

size of our market, integrate our economy internationally and improve our infrastructure and our business environment; this is much more relevant for a multinational to decide to invest here than to grant tax benefits. China is a good example of this as it continues to attract foreign investment even with the elimination

• f various tax incentives;
• 5. In Brazil, the indiscriminate granting of tax and credit benefits by

states - a direct consequence of the 1988 Constitution, which altered the tax system, reducing federal transfers to states and municipalities - has generated inevitable revenue losses for the

• country. This is even more serious in the current scenario of

enormous difficulties in controlling public accounts;

• 6. Equally serious is the negative impact on overall productivity as

benefits can determine inefficient allocation of investments - benefits to sectors in which states have no vocation or have no best production and trading conditions;

• 7. Emphasis should be placed on distancing the type of

competition based on tax incentives from the modern agenda of industrial competitiveness. As noted in the literature, global investments are much more conditioned by systemic productivity and market-specific characteristics than by arbitrage of production costs, such as wages and tax incentives.

• 8. Therefore, we need to deepen discussions on what can make us

more competitive. The way that seems most rational to us is to stimulate in our industry a production structure strongly related to

• knowledge. It is equally vital in reducing our regional inequalities.

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Prospective Analysis

• 1. It is an approach that induces collective reflection in light of changing

trends in the local and global environments.

• 2. Through the application of systematic and participatory processes, it

enables the construction of knowledge about possible perspectives, leading to the creation of shared visions of the future, in the medium and long term, and the identification of actions that need to be performed in the present and in different time horizons to achieve a specific proposed vision.

• 3. It is not intended to predict the future, but to study the various

possibilities of plausible futures that exist and to prepare organizations to face any of them, or even to create conditions for modifying their probabilities of occurrence or minimizing their effects.

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Effects

• 1. Direct effect - expresses the impact of variations in the final demand of the

considered activity coming only from the businesses that provide direct inputs to this activity;

• 2. Indirect effect - expresses the impact of variations in the final demand of the

activity arising only from activities that provide indirect inputs to this activity;

• 3. Induced Effect (or Income Effect) - expresses the impact of variations in the

final demand for the activity arising from differences in income when an activity is stimulated.

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Reflections

Amazonas Governor Wilson Lima (PSC / AM)

“The forest must be perceived as an attraction of values and not a hindrance to development.” He stressed the importance of viewing the Amazon rainforest as an "asset." It is “imperative” to modernize the state economy, with “special attention” to the industrial hub of Manaus.”

01/01/2019 Valor Econômico Mayor of Manaus, Arthur Neto (PSDB / AM)

“The Amazon has to be self-sustaining by incorporating its biodiversity into the MFZ. The whole world would applaud Brazil if Amazonian biodiversity were the region's flagship for sustainable development. Everyone will run here if they can invest in biodiversity”.

October,24,2019 Fato Amazônico Alfredo Alexandre de Menezes Junior, superintendent of SUFRAMA.

“We talked to the economic team all the time about how we could improve our entire Free Zone. To use

• ur model to leverage new possibilities for economic

matrices.” 02.15.2019 D24AM

Federal Representative Sidney Leite PSD/ AM

“The Free Zone model that has so far yielded very positive results can be rethought to bring the economy

• f the Amazon into the 21st century. The focus should

now be on innovation. We need to encourage the knowledge economy in the Amazon and northern Brazil. That means investments in cutting-edge agriculture, technology, and biotechnology.”

09.14.2019 Congresso em Foco

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Reflections

Federal Representative Atila Lins PP/ AM

“Without economic alternatives, the state can suffer from deforestation and end its policy of environmental preservation. “In addition to the need to preserve its model, we have this environmental issue where the whole world is turning its sights to the Amazon.”

09.06.2019 BNC Amazonas Delegate Pablo PSL/ AM

“We also have medicine products. Why are these sources not used? Why doesn't tourism go forward here in the Amazon? The name 'Amazonas' is one

• f the strongest in the world, this name should be

highlighted so that we win the globe, the world, and that can make it different from what has been done until today.” 01.08.2019 D24AM

Federal Representative - Marcelo Ramos PL/ AM

“We need to evaluate it permanently and make

• adjustments. Any reflection on MFZ must start from

two premises. One finding is self-critical. No industrial model stands forever with tax incentives and barriers to imports. We need to understand the model as a temporary policy that requires infrastructure planning, productivity, and labor training so that it can be competitive in the future in an environment of fewer tax incentives.” 05.23.2019 Poder 360

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Technical Team

General Coordination Ricardo Sennes, Partner Director of Prospectiva Consultoria Sergio Leitão, Executive Director of Instituto Escolhas Executive Coordination Gabriel Kohlmann, Prospective Consulting Manager Economic Development Consultants Carlos Alberto Manso, researcher at Ceará Federal University Isadora Costa Osterno, researcher at Ceará Federal University Sustainability Consultant Sergio Leitão, Executive Director of Instituto Escolhas Communication Advisory Salete Cangussu Partnership:

ye ars

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