The collapse of the rubber cycle marked a period of great difficulty for the Amazon, leading to economic stagnation and deep social problems, particularly in cities like Manaus and Belém.
Decades later, this scenario began to change with the creation of the Manaus Free Trade Zone (MFZ), designed to boost regional development, integrate the region with the rest of the country and generate new opportunities.
Established on June 6, 1957 by the Brazilian government, the free zone transformed Manaus into one of Brazil’s main industrial centers. What was once a fragile economy has become a strategic center of production, innovation and job creation.
According to Decree-Law No. 288 of February 28, 1967, the Manaus Free Trade Zone can be defined as “a zone of free import and export trade and special tax incentives, created with the aim of creating an industrial, commercial and agricultural center within the Amazon with economic conditions that allow its development.”
Currently, it is the main source of income for the state of Amazonas and one of the pillars of growth in the Northern region.
In 2024, the Manaus industrial hub has achieved impressive results, with 132,000 direct jobs and a turnover of $40 billion.
With more than 50 years of history, the Manaus free zone model has proven to be a success to the point of seeing its validity extended until 2073.
In an interview with MetropolisesLuiz Augusto Barreto, president of the Higher Council of the Center for Industry of the State of Amazonas (Cieam), highlights the importance of the model for the region’s economy and analyzes its role in the development of the country.
The free trade zone appeared after the rubber cycle, in an economic crisis. Can we say that this was the country’s major regional reconstruction project?
I would say that the Manaus Free Trade Zone is the largest regional development project in the country. And recognition that we are an unequal country.
Because we must recognize that we do not have in the North and Northeast of Brazil the same socio-economic, infrastructural and academic conditions that have allowed the South and Southeast to be in a much more developed position today.
The industry in the Manaus free zone represents almost 2% of Brazil’s GDP. So, for all its importance, we still have a very uneven concentration of industrial activity generation when comparing the South and the Southeast.
Taking this GDP point, how do you assess the impact of the Free Zone on the country’s economy?
The impact is much greater than the percentage of GDP. First, because the Manaus Free Trade Zone is an extremely formal business environment.
We are the most formal in Brazil and one of the most formal in the world.
Furthermore, the Manaus Free Trade Zone, since its creation, has worked from the perspective of large global companies.
We have the Korean Samsung, the Japanese Honda, American companies like Coca-Cola, as well as Brazilian companies. It’s a melting pot of corporate cultures.
And this melting pot of executives and formal businesses has allowed the Manaus Free Trade Zone to also be a very functional hub, because we are a concentrated industrial district.
It is a very culturally rich and very attractive environment for executives. So it is very common for people to move to Manaus and stay in Manaus.
What are the main products leaving the free zone?
Nowadays, if we think about products, we have a large segment of electronics, such as mobile phones, televisions and air conditioners. Without forgetting that the largest two-wheel hub on our continent is in Manaus.
We have the second largest Honda factory in the world, which is only slightly smaller than the Honda factory in Japan.
Added to these products is the chemical industry, which is important in the Manaus free trade zone.
There are over 500 industries. There are a huge number of companies that also have a whole ecosystem of companies that supply those companies. It is an innovation ecosystem, which serves as a model for the country.
The figures for the free zone are solid: more than 130,000 direct jobs. In your opinion, what impact does this represent for the Amazonas region?
We summarize this in one sentence: the vocation of Amazonia and Amazonas is industry. Because there is no short-term economic activity that can replace the Manaus Free Trade Zone.
We are working to internalize development, we are working to make the free zone also relevant to populations beyond Manaus. Additionally, we have a prosperity belt with unemployment rates below the national average.
Thus, the Manaus Free Trade Zone is by far the most important economic activity in our state. Not only from the point of view of innovation, but above all from the point of view of generating jobs, income and decent activities for our society.
The Manaus Free Zone contributes to the entire budget of the State University of Amazonas, present in all municipalities of the state and the capital.
Without needing a cent of public resources. Each company that sets up at the ZFM puts forward an amount of revenue to be financed for this college.
We are now faced with the challenge of tax reform, which will require a model from the management committee to continue this maintenance. Many factors add value to the company due to business activity in the Manaus Free Zone.
How does the industrialization of Manaus help preserve the state’s forest?
To establish yourself in the Manaus Free Zone, it is essential to have a quality management system. It’s something unique in Brazil. No Brazilian state requires it, but in the Amazon it is the Brazilian government that requires it.
Companies must have environmental systems ISO 14.001, an international standard that establishes the requirements for an environmental management system (EMS), with sustainable practices, such as waste reduction, rational consumption of resources and pollution prevention.
How does Cieam assess the extension of incentives to the Manaus free zone until 2073?
The Brazilian parliament has recognized the effectiveness of the model. Because it is clear that an incentive area must have the approval of Parliament. This endorsement occurred in a very representative way.
This has been repeatedly recognized by the Brazilian parliament, and now even in the tax reform, the incentives in the Manaus regions have been preserved once again. The Manaus free zone has been preserved in its entirety from the point of view of tax incentives.
We are working so that, by 2073, the region can be equipped with infrastructure, investment capacities and capacities for various economic matrices. And may we also, as a society, recognize the importance of keeping the forest standing.
Do you think the free zone is here to stay?
I have no doubt about it, especially because I believe that the free trade zone should be Brazil’s development model.
A formal and inclusive company that makes its contribution to its environment and to society.
It is a company that really makes a difference in the environment in which it operates.
What are the main challenges currently facing the free zone?
I would say the biggest challenge is communication. Because we are in an encouraged region, which must be explained to the country in one way or another.
Brazilian society, which knows the Manaus free trade zone, admires and respects it. But we must expand this understanding, so that this company, so recognized regionally, is recognized in Brazil and around the world.
Because indeed, we have excellent productivity rates. The production of industries in Manaus is up to the best management positions.
So I would say that the free trade zone is here to stay and, more than that, it is here to grow, prosper and continue to contribute more and more to Brazil.
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