Brazil to offer incentives to boost defence product exports
Brazil has announced plans to offer incentives, including line of credit, to countries investing in Brazilian defence products.
The line of credit will be provided to buyers by the Brazilian Development Bank (BNDES).
The government is also looking to offer insurance instruments for domestic manufacturers and a dedicated group in the Foreign Trade Chamber (CAMEX) to exclusively address the defence industry.
Speaking at the LAAD Defence & Security exhibition, Brazil Defence Minister Raul Jungmann said: "We need to create a specific policy for this sector, with robust instruments that can create greater efficiency in our trade relations.”
The weight of the defence industry in Gross Domestic Product (GDP) is more than BRL200bn ($64.01bn).
Jungmann said that the defence industry was responsible for a number of technological breakthroughs, such as GPS, the microwave and Teflon.
He further explained that the incentives are necessary because the defence market is asymmetric between competing countries, and not governed by the same World Trade Organization (WTO) rules like other sectors.
Brazil Finance Minister Henrique Meirelles said that the defence sector benefits from the structural changes taking place in the Brazilian economy.
The 11th edition of LAAD is being held in the Riocentro Convention Centre in Rio de Janeiro.
During the event, 600 different brands are being presented across several defence areas, including marine and aeronautics engineering, personal and tactical equipment, and military solutions.
Nearly 150 of the companies participating in the exhibition are Brazilian, and represent a sector that accounts for 3.7% of Brazil's GDP and generates 30,000 direct jobs.