Industrial policy and maturity of the dialogue on Defense indicate a good moment for the BIDS, evaluate the Advisory Board member and the Presidency of ABIMDE during the plenary
The members of ABIMDE (Brazilian Association of Defense and Security Materials Industries) had the opportunity to learn about the “Economic Scenario and Perspectives for the Defense Industrial Base” in the plenary session held last Tuesday (14), in São Paulo, at Círculo Militar de São Paulo, in a hybrid format.
The theme was addressed by Dr. Marcos José Barbieri Ferreira, professor at Unicamp (State University of Campinas) and member of ABIMDE’s Advisory Board.
In his presentation, Professor Barbieri outlined an overview of the current economic situation, approaching important topics: the International Scenario, the Political Scenario, Economic Policy, Diagnosis, and Perspectives for the Defense Industrial Base.
In the global scope, he emphasized the technological, geopolitical, and economic aspects, highlighting the structural changes generated by Industry 4.0; the increase in military spending; the end of the globalization model consolidated in the 1990s; and the growing demand for sophisticated military equipment.
Regarding the national economic policy, the ABIMDE Advisor said that the Defense Industry is among the priorities of the new government’s Industrial Policy, not only because of sovereignty issues, but also because it is “a key sector that operates with high technology and has public demand”.
Regarding fiscal policy, he highlighted four Proposals for Amendment to the Constitution (PECs) that are in Congress that, once approved, will significantly impact industries, they are: Tax Reform (45/2019 and 110/2019), Fiscal Framework (95/2016) and Transition PEC (32/2022).
“There is [with Tax Reform] the possibility of greater efficiency in the productive sector and particularly in the industrial sector. From a technical point of view these are very well-designed projects, with very large gains. The biggest challenge of a Tax Reform, especially for a country with the economic, social and federative complexity of Brazil, will be to arbitrate between losses and gains. There are signs that we will advance in this direction,” said the professor during the lecture.
He also said that he sees room for BIDS to discuss the percentage and regularity of investments in Defense. “A discussion that guarantees not only a higher percentage, but the creation of mechanisms that ensure that this investment variable has less volatility,” emphasizing also the importance of the PEC 17/22, which guarantees the continuity of resources for Strategic Defense Projects, authored by Congressman Luiz Philippe de Orléans e Bragança.
After the lecture, Professor Barbieri answered questions from members.
The president of ABIMDE’s Board of Directors, Dr. Roberto Gallo, thanked Professor Barbieri for the presentation and, regarding the themes approached, made two observations.
The first was about the fact that the solutions found for political problems, in general, are rarely definitive. “This is bad, especially for strategic sectors where we seek definitive solutions.”
The second observation was about the size of pension spending, which depends on a review in acquired rights. “And Brazil is not a country that messes with acquired rights,” the President pointed out.
Updating the members about ABIMDE’s actions with the new Government, Dr. Gallo said that he has been talking to the Ministry of Defense, the Ministry of Science, Technology and Innovations and ApexBrasil (Brazilian Agency for the Promotion of Exports and Investments) in the search for structuring solutions for the Defense and Security Industrial Base.
He pointed out that the perspectives at this moment are positive, but that strategic plans are needed, which are being prepared by ABIMDE in partnership with several players.
The President of ABIMDE believes that the Minister of Defense, José Múcio, is committed to seek solutions to immediately strengthen the investments, the growth of companies and the increase in the number of jobs. “Obviously, there are variables to be addressed, such as the national content index, which besides being unstable, if not very well guarded, has a tendency to be reduced over time,” said Dr. Gallo.
For him, despite the fiscal environment and other variables in the country, the importance of the Defense Industry is well understood by all the actors who have entered into a position of decision. “The question is the path that will be taken and whether we will finally achieve strategic solutions that are a little more perennial,” he stressed.
Actions and Events
Continuing the plenary, ABIMDE’s Executive Director, Colonel Armando Lemos, and the Projects Director, Colonel Antonio Ribeiro, presented to the associates the actions and events scheduled by the Association.
Among ABIMDE’s initiatives presented by the Executive Director, are the project of the book A História da Base Industrial de Defesa (The History of the Defense Industrial Base), which will be released in December and will have the consultancy of General Ivan Ferreira Neiva Filho; the organization of Inova BID, a technological innovation fair that will be held in partnership with Senai/Cimatec, in the beginning of the second semester.
The Projects Director talked about ABIMDE’s participation in IDEX 2023, from February 20 to 24, in Abu Dhabi; and in Laad 2023, from April 11 to 14, in Rio de Janeiro.
In this plenary, two new ABIMDE members were presented: the companies Força e Defesa Consultoria and Sarkar Tactical, both based in Brasilia (DF).
Força e Defesa Consultoria advises and follows up processes of defense products classification and accreditation of defense companies, provides consulting on benefits such as the Special Taxation Regime (Retid) and the TLE (Special Bidding Term), and offers training, among other services.
Sarkar Tactical manufactures and sells opaque ballistic armor, bulletproof vests, helmets, and ballistic plates, among other products, and also imports and exports controlled products.
The Executive President of ABIMDE, General Aderico Mattioli, spoke about ABIMDE’s initiatives to promote the companies of the Defense and Security Industrial Base, through Social Communication actions and the Cataloging of Defense and Security Products and Services.
“We have to have a database where the products and capabilities of the companies are posted there and, depending on the client, we can raise the appropriate information, at the appropriate time,” said General Mattioli.
In this sense, he said, “we are making an effort, together with ABIMAQ and the Comdefesa of Santa Catarina, to expand the cataloging”.
Aiming to strengthen networking among companies, ABIMDE will grant a space in the plenary sessions so that members can show their innovations and novelties.
The first to inaugurate the new space, at Tuesday’s meeting, was Bombas Triglau, a Strategic Defense Company (EED), based in Santa Catarina. The member presented a vessel for navigation in shallow waters, developed from capabilities acquired while participating in Navy projects. The vessel, capable of navigating over a 200ml blade of water, is already being used to clean rivers and tributaries.
“We are not presenting exactly a product, but the capacity that the company acquired and that, to survive, has to employ it in other areas. The duality here is very strong,” explains General Mattioli.
Closing the plenary session, General Mattioli spoke about the visits he has been making with the President of the Board of Directors, Dr. Roberto Gallo, highlighting that there is an understanding among the political actors that reindustrialization goes through the strengthening of the Defense Industrial Base and its technological overflow and industrial capabilities.
“Fortunately, Defense has been treated in a supra-partisan way. Today we have a mature Defense dialogue and we have managed to put Defense on the agenda much more easily than 20 or 30 years ago. The players that are there began to understand that Defense is a sovereignty issue,” he said.
*** Translated by the DEFCONPress FYI team ***