By Business News Americas staff reporters
From Business Americas Website
The Brazilian government intends to create a regional development fund of 11bn reais (US$5.3bn), President Luiz Inácio Lula da Silva was quoted as saying by local press.
The national fund for regional development (FNDR) will be proposed to congress as part of the national policy on regional development (PNDR), which Lula created by presidential decree on Thursday (Feb 22).
The government intends to create the 11bn-real fund using resources from the national budget and taking 2% of revenues from two federal taxes: the income tax (IR) and the industrialized products tax, national integration minister Pedro Brito was quoted as saying.
The fund will be used for the development of public works and the implementation of the growth acceleration plan (PAC) announced by the government in January.
For the purposes of investing the funds in a manner which best works toward improved distribution of federal resources, the country is to be split into four sectors: high income Brazil, referring to the central-west and south-central regions; low-income Brazil, meaning the north and north-east regions; recently developing Brazil, where the number of medium incomes have arisen; stagnated Brazil, where living conditions are precarious.
The aim of the policy and its fund is to reduce regional differences and end the geographical concentration of both public and private investments.
At present, the main financing vehicles for the PNDR, in addition to the general federal budget, are the regional financing and development funds, as well as fiscal incentives.
Under the new program some 9.3bn reais will be made available this year to the northeast, north and central-west. A further 2bn reais is available through the northeast development fund (FDNE) and the Amazon region development fund (FDA), mainly for infrastructure projects cited in the PAC.
The PNDR will be controlled by the newly formed national information system on regional development (SNIDR), under the coordination of the national integration ministry.