Aprimorando a Zona Franca de Manaus

This report by the Climate Policy Initiative analyzes the industrial policy of the Zona Franca de Manaus (ZFM), arguing that while it is named a 'free zone,' it functions conceptually as an 'enterprise zone' focused on regional development rather than international trade. The authors suggest that the current incentive structure fails to drive productivity or wage growth and recommend redefining the ZFM's identity to align its fiscal incentives with either international competitiveness or sustainable regional development.

• The Zona Franca de Manaus (ZFM), specifically its industrial arm the Polo Industrial de Manaus (PIM), is dominated by large multinationals such as Samsung, LG, Honda, Coca-Cola, and Harley-Davidson, producing mainly televisions, motorcycles, mobile phones, and air conditioners. In 2019, the PIM generated over 80,000 direct jobs and revenue of approximately R$ 105 billion.
• Despite its name, the ZFM does not operate as a typical free zone aimed at foreign trade; while 65% of its inputs are imported, only 2% of the PIM's 2019 revenue came from international sales. Instead, it resembles an 'Enterprise Zone' (ZE) designed to attract companies to a region to employ local labor and develop the local economy.
• The current industrial policy has failed to significantly improve productivity or wages. In 2019, labor costs in the PIM represented only 5% of revenue, compared to a 2018 Brazilian industrial average of 11%, and 59% of PIM employees earned up to two minimum wages.
• Fiscal incentives in the ZFM often lead to logistical and productive inefficiencies. For example, the Basic Productive Process (PPB) for air conditioners required the use of national compressors produced in São Paulo, forcing components to be shipped to Manaus and then finished products to be shipped back to the Southeast, increasing costs and reducing energy efficiency.
• The ZFM's fiscal incentives are extensive, including exemptions on import duties, IPI (Industrialized Products Tax), and reductions in corporate income tax (IRPJ) and ICMS. In 2019, tax expenditures for the ZFM's industrial sector exceeded R$ 6 billion.
• The report recommends a clear redefinition of the ZFM's identity to align incentives with specific goals: either a 'free zone' model to facilitate international trade (conditioning incentives on re-exportation) or an 'enterprise zone' model to foster regional development (conditioning incentives on local hiring and social investment).
• To improve sustainability and regional integration, the authors suggest updating the PPB to include environmental criteria and incentives for industries that utilize the Amazon biome's comparative advantages, rather than relying on imported inputs and domestic market sales.
• The ZFM's incentives were extended by Constitutional Amendment 83/2014, moving the expiration date from 2023 to 2073, based on the justification of regional development and job creation.

APA

Climate Policy Initiative (2021). Aprimorando a Zona Franca de Manaus. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/05/AMZ2030-Aprimorando-a-Zona-Franca-de-Manaus.pdf

Chicago

Climate Policy Initiative. Aprimorando a Zona Franca de Manaus. 2021. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/05/AMZ2030-Aprimorando-a-Zona-Franca-de-Manaus.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Aprimorando a Zona Franca de Manaus |date=May 2021 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2021/05/AMZ2030-Aprimorando-a-Zona-Franca-de-Manaus.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021aprimorando, author = {{Climate Policy Initiative}}, title = {{Aprimorando a Zona Franca de Manaus}}, institution = {Climate Policy Initiative}, year = {2021}, month = may, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2021/05/AMZ2030-Aprimorando-a-Zona-Franca-de-Manaus.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }