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A fragile capitalism in a fragile environment: entrepreneurs and state bureaucracies in the free zone of manaus

1 Introduction
2 Methodological remarks
3 A theoretical excursus
4 Entrepreneurs and bureaucrats
5 Findings
6 The winners


Roberto Motta

1 Introduction

Try to imagine the city of Manaus. It is a kind of island right in the middle of the Amazonian forest, far from every other city or town, thousands of kilometres away from the industrialised core of Brazil São Paula, Rio de Janeiro, Belo Horizonte, Porto Alegre, and nearly all that lies around and between these cities). It is also distant from Brazil's other underdeveloped, but densely settled region, the Nordeste (North-East), where the cities of Recife, Salvador, and Fortaleza, among the largest cities in Brazil, are located. Brazil has never quite known what to do with Amazonia, an immense territory, comprising about 5,000,000Km², nearly 58 per cent of the whole area of the county.¹ Yet the region is inhabited by fewer than 10 million people, about 7.5 per cent of the whole national population.

With the exception of the fairly recent discovery of gold fields, both in the extreme north and the extreme south of the Amazon, and the iron ores of the Grande Carajás project, Amazonia has not revealed a spectacular richness in mineral resources. Despite a debate that lingers on (Motta, 1985), its soils are inappropriate for the kind of plantation agriculture which, since the early sixteenth century, has characterized, for instance' the humid coast of northeastern Brazil.

The area, therefore, had only marginal utility of for the kind of international economy that begins to take shape with the European discovery of the Orient and the Americas. It is not, after all, too surprising that Portugal, with little military might and scant manpower, was able to seize and hold it, penetrating westward up to the present border between Brazil and Peru. All of the area west of the present-day city of Belém (very near the mouth of the Amazon River) had been attributed to Spain by the Treaty of Tordesillas, signed by the representatives of the Castilian and Portuguese kings in 1494. The Spaniards, however, were much too busy elsewhere, and thus the Portuguese with little difficulty were able to expel the missionaries dependant upon the Crown of Castille, while enslaving all the Indians pagan as well as Christian - they found on their way (d'Ans, 1982). With only minor adjustments,² the boundaries of Luso-Brazilian Amazonia have not changed since the Treaty of Madrid was signed in 1750 by Spain and Portugal, recognizing the faits accomplis in South America. During the eighteenth and most of the nineteenth centuries, that huge area, belonging from 1822 onward to independent Brazil, had no other use than that of serving as a vast reservoir of drugs, spices, and rare woods. An exception was its easternmost end, due east of Belém where some crops were grown. Population density was very low. Thus, in 1872 the combined population of the two Amazonian states, Pará and Amazonas, with a total area of 4,20O,OOOKm², did not exceed 329,000 persons.

Things were drastically altered by the rubber boom, which brought untold wealth at least to the big landowners and traders who came to settle in the area (Weinstein, 1986). The cycle peaked between 1890 and 1910. The rubber tree (Hevea brasiliensis, Portuguese seringueira) grew wild in the Amazonian forest and, at the time, only there. Discovery of the vulcanisation process by Charles Goodyear in 1839 had made possible the industrial use of rubber as it is known today. The Amazonian boom peaked with the so-called bicycle craze, only to decline when the supply of Amazonian rubber proved unable to meet the demand of the growing automobile industry, which represented the greatest incentive for the establishment of rubber plantations in South-East Asia. The handsome fin-de-siècle architecture of Manaus, the opera house, the public market, and other fine buildings, still bear witness to the opulence of that period. By 1925 it had gone with the wind: Hevea brasiliensis, after a stage in the Kew Gardens of London, had been transplanted to the now independent countries of Malaysia, Singapore, Indonesia, and Viet Nam, where it was cultivated in large, well-organized plantations. These, due either to ecological reasons, or to the lack of a qualified and abundant supply of manpower or both, were never successfully adopted in the Amazon.

The forty years that elapsed between 1925 and 1965 were, in spite of some public and private initiatives, a period of stagnation in the economic history of Brazilian Amazonia, which did not experience the outbursts of industrialization and modernization that characterized other areas of Brazil during the same period. Like the northeastern region- although completely different from it in ecological and demographic terms - the Amazon lagged behind the main trend of Brazilian development. Hence the creation of a system, indeed of several systems, of tax incentives in order to attract investments into the area. Their detailed description is beyond the scope of the present paper. I will limit myself to the fiscal legislation that really mattered to western Amazonia, or at least to the state of Amazonas, its capital city, Manaus, and immediate environs, and brought about extensive changes of an economic, demographic, social, and cultural kind. I refer to the legislation enacted early in 1967, creating the Free Trade Zone of Manaus (Zone Franca de Manaus).

Let us keep in mind that Brazil follows a protectionist policy (Mahar, 1979). Foreign-made goods are subject to taxation, often heavy taxation, on entering the country. The essence of the Zona Franca system consists of import duty exemptions, given both to certain kinds of finished goods to be sold in the city of Manaus and only there, and to semi-finished goods or component parts, to be further worked on or assembled in the industrial sector of the free trade area and then re-exported elsewhere in Brazil. The final product is again exempt from duties in proportion to the value added to it in Manaus: the so-called imposto sabre produtos industrializados (tax on industrialized products - really a value-added tax) does not apply, either, to goods finished or assembled in the area.³ These provisions, however, have several strings attached. In order to benefit from them, industrial investments must have been approved by a special agency of the Brazilian Federal Government, the Superintendência da Zona Franca de Manaus, generally known by the acronym "Suframa." This is the source of the powers of the state bureaucracies of the Zona Franca.

A second and more important stipulation was created in 1976, with the introduction of an annual ceiling on all imports into the area. Conceived as a general deterrent to the depletion of hard currency through the expansion of imports, this ceiling may, and does, vary according to the year. This second proviso applies less to the ceiling itself than to its distribution to the Zona Franca's individual firms, both industrial and commercial. The quotas are allocated in situ by the top echelons of Suframa. As we are about to see, the importance of Suframa lies, to a very large extent, in its quota-distributing power, and its head, the Superintendent (Superintendente), can be defined, for most practical purposes, as the man who controls the quotas.

The Zona Franca represents, therefore, a deliberate attempt to create a modern industrialized enclave in the equatorial forest. The rationale was that backward and forward linkages associated with that focus of growth would, in due time, diffuse development throughout all of the region. The goal of this paper is not the evaluation of the Zona Franca from an economic standpoint, but rather the discussion of some of the anthropological issues connected with that form of induced development. First is the problem of the origin, or recruitment, of entrepreneurs in a setting such as that of the Zona Franca de Manaus - a classical problem of economic anthropology and economic sociology. A second issue to be discussed relates to the role of the federal and state bureaucracies in the installation and management of the Free Trade Zone.

2 Methodological remarks

Although I had visited Manaus and the Amazon several times for scholarly purposes between 1979 and 1986, fieldwork for the research on entrepreneurs and bureaucrats was actually done in the first semester of 1987. As an anthropologist, I adopted, above all, a typically anthropological methodology. I conducted a series of open, in-depth, formal and informal interviews with entrepreneurs and members of the highest echelons of the federal and state bureaucracies (mainly at Suframa and at one of its subsidiaries, Fucapi, the acronym for the Fundaçao Centro de Anályse da Produção Industrial, or Foundation Centre for Industrial Production Analysis).4 My goal was to understand the basic structures underlying the opinions of the persons interviewed on the subject of "being an entrepreneur in Manaus. " 5

However, I was aware of a basic principle of the social sciences methodology (all the more relevant in a research setting involving so many vested interests of an economic and political kind): people's utterances serve as often to veil their real thoughts as to bare them.6

Therefore, in my effort to understand the deep structures underlying not only the speech, but also the behaviour of my respondents, I often resorted to what may be called the method of internal and external dissonances. By internal dissonances I mean those which occur in the speech of a single individual, in the form of inconsistencies, hesitations, superfluous reiterations, retractions, lapses, and other signs of discrepancy between, on the one hand, the apparent meaning of individual's utterances and, on the other, the person's behaviour and thoughts (the latter discerned through behaviour). External dissonances are those that become manifest when the researcher compares the utterances of two or more respondents judged to be of similar social and economic status (thus presumably sharing the same interests), interviewed on the same subject.

I also made use of written sources. Here I refer less to the rich literature available about Amazonian problems (Benchimol, 1977; d'Ans,1982; Ferreira Reis, 1972; Mahar, 1979; Mendes, 1974; Wagley, 1974; Weinstein, 1986), than to the documentation available in the archives of Suframa, Fucapi, the Commercial Association (Associacao Comercial) of Manaus, and other institutions. Thus, I obtained access to the full text of Resolution no. 023/87, signed by the Superintendent of Suframa, distributing the import quotas for fiscal 1987. I also gained access to the files of every firm registered in the Zona Franca area (indeed in the whole of the western part of Brazilian Amazonia). The combined reading of Resolution no. 023/87 and the Suframa files greatly helped me in my attempt to answer, at least in part,7 the question "who gains and who loses with the creation of the Free Trade Zone of Manaus?"

3 A theoretical excursus

As I conceived it, an investigation of the economic elites of the Zona Franca should mainly focus on the cultural characterization of the entrepreneurs involved. The basic query of this essay can, therefore, be formulated as follows. What is it that, in the social and cultural background of certain persons or groups, renders them more, or less, motivated and/or more, or less, capable to play an entrepreneurial role in the Free Trade Zone of Manaus?

The question poses one of the basic problems of the anthropology (and the sociology) of economic activity. It is, for instance, one of the central issues of the economic, sociological, and historical essays of Max Weber. This German author saw the problem of the energising forces of modern capitalism as one less of the actual origin of the sums available for investment than of the development of a spirit of capitalistic entrepreneurship. Where that "spirit" is able to unfold its virtualities, it will bring about its own capital and money supply, rather than the other way round. The entrepreneur is, thus, for Weber, the bearer of the spirit of capitalism, characterized, above all, by a rational approach to the factors of economic production and by the achievement motivation (McClelland, 1951; Weber, 1988). It can also be said, in spite of the restrictions Weber formulates concerning this trait, that the spirit of capitalism is also characterized by the acquisition motivation, the tendency toward an unlimited expansion of both capital and profits.

Similarly, for another German theoretician of entrepreneurship, Werner Sombart, the process of development is a function of the presence, within a given area, of a group possessing some abilities basically of a cultural kind. The entrepreneurial mind must combine method, persistence, acquisitiveness, and more of the like. Even more important, the entrepreneur ought to be imbued with "that revolutionary, Faustian, European8 spirit, that gave birth to the cultural period in which we live ... The basic characteristic of that mentality lies in the conception that theory and practice are inseparable" (Sombart, 1946: 162-3). Let us beware, nevertheless, that, at least for Sombart, entrepreneurship requires no ethical qualification. "The needs of the community are important for the economic utilization of a discovery only in so far as it can bring a profit to the entrepreneur" (Sombart, 1946: 106).

A third author, Joseph Schumpeter, considered the entrepreneur along the same lines as Sombart, as the main actor in the process of economic development, since he is basically the introducer of innovations into actual economic practice. Schumpeter's concept of entrepreneurial action is a rather broad one, since innovation, according to him, can assume five different forms:(1) the introduction of a new commodity or of a new service; (2) the introduction of a new method of production or trade; (2) the opening of a new market; (4) the discovery of a new source of raw materials or semifinished goods; and (5) the restructuring of a sector or branch of industry or commerce, leading, for instance, to the creation or elimination of monopolies (Brandão Lopes, 1965; Oliveira Mota, 1964; Schumpeter, 1934).

The anthropological and sociological issue of entrepreneurship is connected with ethnic and religious variables. Thus, one of the central questions of Max Weber's famous essays on the "spirit of capital ism" is why certain ethnic and confessional groups, compared to other groups of the same kind, exhibit a greater or a lesser propensity toward entrepreneurship. It is well known that for him the causation of modern capitalist development should be mainly ascribed to the "Protestant ethic" or, more precisely, to the inner-worldly asceticism of Calvinism and the Baptist sects. Weber, however (far more so than Sombart), drew a sharp distinction between a "rational" capitalism, associated, according to him, with the "Protestant ethic" and representing a historical phenomenon with clear-cut limits in both time and space, and a speculative capitalism, with its own entrepreneurs, associated, as he says, "nowadays as always," with international trade. The ever-clairvoyant Weber also drew attention to the links between speculative entrepreneurs - often recruited from among specific ethnic and religious groups - and such fiscal privileges as may be granted by princes and heads of government (Weber, 1988).

Irrespective of the ethnic and religious implications of the Weberian analysis, the distinction between a rationally innovative and a rather speculative entrepreneurial motivation will be adopted as the basis of one of the central hypotheses of this paper, namely the speculative character of much of the capital invested in the Free Trade Zone of Manaus and its links mainly in commercial investments with the "pariah capitalism" (another Weberian expression) of what I here call the "international of the free ports"9 with its peculiarities of an ethnic and religious kind.10

4 Entrepreneurs and bureaucrats

I have already alluded to the utmost importance of the role of the state bureaucracies in the Manaus Free Trade Zone, meaning the Brazilian federal state bureaucracies - basically Suframa and subsidiaries - and not (unless otherwise stated) the bureaucracies of the State of Amazonas. As is well known, in situations of retarded economic development the state and its bureaucracies tend to assume some of the functions that otherwise devolve upon private enterprise. And the economic role of the state is all the more important in Brazil due to the omnipresence, throughout the whole history of both Brazil and its motherland, Portugal, of what Brazilian sociologist Raymundo Faoro has termed the "bureaucratic estate" (estamento burocrático), which commands

... both the civil and the military branches of the public administration, seizing and leading the economic, financial, and political spheres. In the economic field, going well beyond the regulative function accorded to it by the ideology of liberalism, surpassing even the system of regulated concessions, the bureaucratic estate assumes the direct management of enterprises. Acting directly upon the economy or using incentives are but alternative means to reach the same goals. (Faoro, 1979: 738-9)

Indeed, the Free Trade Zone of Manaus can be described as a condominium of private entrepreneurs and state bureaucrats, each side receiving, in a direct or an indirect wad,11 a share of the profit generated by the industrial and commercial activities of the economic enclave. This is why I suggest that the concept of Oriental, or hydraulic, despotism, as formulated by Karl Wittfogel (1957, 1968), be adopted for the understanding of some of the basic features of the Zona Franca. I use the concept in a very broad sense, as Wittfogel himself understood it. Thus he considered the Inca empire, located on the Andean plateau, as "a purely Oriental society".12 Conversely, many societies which are located in the Orient from a purely geographic point of view have nothing in common with despotism as understood by Wittfogel.

Although the historical prototypes of Oriental despotism are derived from the hydraulic societies of ancient Egypt, Mesopotamia, China, and others, its main characteristic consists less of the presence of public works on a grandiose, pharaonic scale, not missing in Brazil as a whole or in Brazilian Amazonia, than of the role of the large state bureaucracies. Although these do not own the means of economic production, they nevertheless exert, or share, control over the basic economic activities of the society. Either through the management of some essential resource (such as water) or through regulations, incentives, restrictions, and the like, state bureaucracies are able to appropriate a significant part of the wealth - or of the "surplus value," if one prefers this expression - generated in the same society. In point of fact, the concept of "Oriental despotism" might well be used for the understanding not only of the Free Zone of Manaus with its controlling bureaucracies at Suframa and Fucapi, but also the North-East of Brazil (where state bureaucrats have as one of their basic tasks the management of hydric resources in the strict sense), and even Brazilian society as a whole.

The preceding considerations can be summed up in the two following hypotheses:

1. The hypothesis of a "pariah capitalism," that is, the expectation that entrepreneurial activity in the Manaus Free Trade Zone has a largely speculative character, taking advantage of the system of tax incentives offered by the government and being associated with ethnic and religious groups who tend to play a peripheral role in the general context of world trade (East Indians of certain castes and certain regional origins, SouthEast Asians, Middle Eastern Jews and Arabs, etc.). This would seem to constitute a typical case of what Max Weber called speculative capitalism, turned, as he said, toward "irrational and political opportunities of gaining a profit" and opposed to "the rational organization of the enterprise oriented toward a real market" (Raphael, 1982; Weber, 1988);

2. The hypothesis of the "hydraulic," or bureaucratic, despotism, that is, the expectation that there exists, in the Free Trade Zone of Manaus, an elite of state bureaucrats which is more than merely functional to the task of planning, regulating, and managing the economic activity of the enclave. In a direct or indirect way, this bureaucratic elite is able to appropriate part of the profit generated by commerce and industry in the area.

Whereas these were my two major research interests in Manaus, I did not disregard a few other relevant topics. Thus, entrepreneurship appeared to have not only a "speculative" rather than, in the Weberian sense of the word, a "rational" character, but it also tended to be represented in the area by the local managers of firms with headquarters elsewhere in Brazil, or abroad, and therefore wielding a rather limited power to take major decisions. Sheer speculative entrepreneurship appeared to be more typical of the enclave's commercial sector and merely managing, surrogate entrepreneurs were mainly found in the industrial sector. Yet these two categories are by no means mutually exclusive.

I was also very much interested in the mechanisms and subtleties of the formal and informal decision-making process in the Free Trade Zone concerning, first and foremost, the allocation of import quotas to both trading and manufacturing enterprises. This power seems to be essentially vested in the person of the Superintendent and his immediate assistants. Indeed, since the establishment in 1976 of a ceiling of importations into the enclave, this official has acquired an almost imperial importance. Nevertheless, as the "hydraulic despotism" in the Zone is, after all, tempered by an abundant legislation that emanates from the central Brazilian government (and even to a certain extent from the government of the state of Amazonas) and the procedural labyrinth that derives from it, one can easily understand that the office of the Superintendent is subject to the influence of persons and groups capable of making good use of laws, regulations, and subterfuges of several kinds.

I never forgot the biggest query of all. Who, in the end, profits from the Free Trade Zone? What persons, groups, strata, social classes are actually the beneficiaries of the incentive system of Manaus? A definitive answer to this all-important question far surpasses the scope of my research. But the data I could gather do provide me with the elements of what is perhaps more than a mere tentative answer to that big riddle. I will return to it.

5 Findings

The pariah capitalism

In a general way, the research findings have confirmed the hypothesis of the "pariah capitalism," in which entrepreneurs are recruited from among certain ethnic or religious groups that are typically peripheral in the context of international commerce. Indeed, here we face a characteristic trait of the economic history of Luso-Brazilian Amazon. As stressed by many of my respondents, there always were in the region, even previous to the rubber boom, entrepreneurs of Sephardic, Lebanese, recent Portuguese, or other origins, who filled the gap caused by the absence, or the weakness, of a native bourgeoisie of traders and manufacturers. However, these migrant entrepreneurs have often been rapidly assimilated into their new society, thereby losing, or tending to lose, touch with their countries and groups of origin. Thus, some of my informants made a point of drawing my attention to the fact (at least according to them) that the westernmost state of Acre is completely ruled, both economically and politically, by descendants of Syrian and Lebanese immigrants. The state of Amazonas, on the other hand, has fallen, according to the same sources, under the power of caboclos (among them the governor of the State himself), that is, Brazilians of mixed Portuguese and Amerindian ancestry. My informants added that both entrepreneurs and bureaucrats (often Brazilians from other regions) had to adjust to "those people" more than they would really like. But it is true that ethnic terms in the Amazon, like caboclo, Português, Paulista (a native of São Paulo State), and others, are frequently used with the vaguest of meanings.

Concerning immigrant entrepreneurs in the Amazon (especially commercial ones) I had reached my conclusions independently from, but in agreement with, Barbara Weinstein, who writes, referring to Pará that:

The Paraense elite had a long tradition of assimilating diverse individuals from Europe or other parts of Brazil ... As older, more established firms dissolved or collapsed, enterprising Syrian, Lebanese, and Jewish immigrants rushed in to fill the vacuum, eventually coming to exercise a near complete control over the Brazilian nut trade. By 1920, two Sephardic Jews could be counted among the leading officials of Pará's commercial association and another Paraense of Jewish extraction operated one of Belém's biggest export houses ... Bringing with them entrepreneurial skills and a bit of cash, Pará's Levantine and European immigrants succeeded in capitalizing on the few financial opportunities that a depressed economy offered. (Weinstein, 1986: 259-260)

Nearly all of my informants declared that at least 90 per cent of the industrial entrepreneurs of Manaus13 came from outside the Amazon, being mainly Paulista.14 The percentage of non-Amazonians is smaller in the commercial sector of the Free Trade Zone, and yet it is there that the presence of the "pariah capitalism," often connected to the "international of the free ports," is more keenly felt. There were, in early 1987, ten EastIndian-owned businesses in Manaus15 _ a phenomenon unknown elsewhere in Brazil.

In spite of much talk one hears in Manaus about the Free Trade Zone being nothing but "a consortium of Paulistas and Japanese," one sees no Japanese merchants in Manaus. One of my interviewees explained this in the following way: "The Japanese, sir? Here in the Amazon they are only gardeners and even so, you know, the climate, the soil do not help them at all." Yet in no way did this prevent the same informant, as well as several others during formal and informal contacts, from adding that the "real currency" of the Zona Franca was not even the United States dollar, but the Japanese yen.

It appears safe to conclude that there exists in Manaus a kind of "pariah capitalism" such as understood by Weber (1952) and even by Marx. This is made evident above all in the commercial sector by the high proportion of entrepreneurs belonging to ethnic minorities, who benefit from the often family-based links with the "international of the free ports" and from the experience and know-how they have acquired in other areas. Yet one should not belittle the presence, the activities, or the profits of the "native"16 entrepreneurs, especially in the commercial sector. Everything leads me to believe that a whole series of "backward and forward linkages" (Hirschman, 1958) benefited the commerce of Manaus even when not directly turned to the importation of foreign goods.

According to the respondents there would have been, in the whole history of the Free Trade Zone, only one clearcut instance of a "native" turned into a successful industrial entrepreneur. Yet, my informants continued, even this person, either for personal reasons or because he could no longer bear the way in which Suframa constantly persecutes all manifestations of local entrepreneurial talent, eventually moved to southern Brazil, taking his capital along with him. Recent immigrants, however (either from abroad or from elsewhere in Brazil), tend to describe the "native"17 as lacking in capital, initiative, know-how, and other requirements for a successful entrepreneurial career.

Whatever the boasts or complaints of both outsiders and "natives" (whose basic economic interests are not necessarily antagonistic), considering the low level of capital accumulation in Amazon, the Zona Franca model could not succeed without the resources of foreign and Paulista entrepreneurship, attracted to the area by generous tax incentives. The ideological justifications, revindications, or explanations of the several kinds of entrepreneurs (or of their surrogates) are not always to be taken at face value.

Bureaucratic despotism

A much larger investigation would be required to analyse the composition, attributions, recruitment system, and performance of the bureaucracies associated with Suframa, its subsidiaries, like Fucapi, and other agencies, both on the national and on the Amazonas State level, including the several institutes that each claim to be the sole, or at least the main, agency legally entitled to do research in the Amazon valley. This is certainly a task which should be accorded top priority; however, here I will concentrate on the powers attributed by my respondents to the Superintendent of Suframa (surrounded, as already remarked, by a quasi-imperial aura) and his immediate assistants.

Keeping in mind the maze of laws, decree-laws, decrees, resolu tions, and the like (Brazilian administrative procedure is full of complexities and subtleties), we need not be amazed that the Superintendent and his assistants indeed have a great latitude in granting, denying, speeding, and delaying. However, as previously remarked, no other attribute of the Superintendent seemed to be more important for my interviewees, as, indeed, for every cognizant Mananara (the Amazonian Portugurse term for inhabitants of Manaus), than his authority over distributing importation quotas. There certainly are objective criteria for the exercise of that prerogative18 For the year 1987, these were stated in Resolution no. 050/87, signed by none other than the Superintendent himself. But everyone, even among the functionaries of Suframa, admitted to me that in spite of those criteria, or even because of them (since they are not always susceptible to a uniform interpretation), the Superintendent enjoys, to put it mildly, a considerable margin of discretion in dealing with quotas.

Thus, one of my respondents - whose opinions reflected the commercial, rather than the industrial, interest in the Free Zone - told me that, before the introduction of the quota system in 1976, the Superintendent of Suframa mattered so little that "he was not even invited to parties." But then, let us keep in mind that the main problem with quotas concerns their proportional allocation to commerce and industry. Industry has been given priority. Hence the anti-Suframa feelings of most tradesmen and the opposite reaction of most manufacturers.

When formally interviewed by me, the Superintendent himself reaffirmed that it was indeed the intention of Suframa to favour the industrial, rather than the commercial, sector of the Free Zone.19 However, he added, I should not take too seriously the complaints of traders and should waste no tears upon them. In 1986, for instance, out of a total value of nearly one billion dollars represented by commerce in the Free Trade Zone of Manaus, no more than 10 per cent according to the Superintendent, derived from the importation and sale of foreign goods other than component parts of products assembled in Manaus itself.

In spite, or perhaps because, of its imperial aura, the post of Superintendent of Suframa (like other important posts in the bureaucracy of Suframa and its subsidiaries) is subject to a high rate of turnover, which is certainly associated with the complexities of the quota-distributing functions incumbent upon it. Although it has an appointive, rather than an elective, character, it ranks among the few topmost positions in the Brazilian administrative system and it carries with it far more effective power than that of Governor of the State of Amazonas.


Who, then, are the beneficiaries of the creation of the Free Trade Zone of Manaus? This question can be answered in a number of ways. I will turn first to the big importers.

From a document I was able to examine in the archives of Suframa (1987), I derived the data presented in table 7.1, describing the aggregate of import quotas attributed to the commercial sector in 1987, the total number of firms benefiting from them, the value of individual quotas, and the number of firms. Even in the absence of an elaborate statistical treatment of these data, table 7.1 permits a glimpse at the high concentration of profits.20 Thus the fifteen topmost firms, representing no more than 4.2 per cent of all commercial firms in the Zone, get 35 per cent of the values of all quotas attributed to the commercial sector.21 In the industrial sector, the total of importation quotas, affecting 154 firms, is five times as large as that of the commercial sector (US$456,220,000 and US$85,77O,00O, respectively). Table 7.2 shows the distribution of that total by the main industrial subsectors of the Free Trade Zone. Finally, Table 7.3 presents the twelve industrial enterprises whose importation quotas in 1987 reached or surpassed the amount of US$10m.22

Another way of answering the question about the winners in the Free Trade Zone is to see it as a consortium of interests, a kind of joint-stock company - Zona Franca, Inc. - whose great shareholders are: (1) transnational and transregional (Paulista) enterprises, which stand out among the major beneficiaries from the tax incentive system of the Zone; (2) the "pariah" entrepreneurs, often linked with what I have called in this paper the "international of the free ports"; (3) local firms,23 overwhelmingly commercial, which profit either from the tax incentives that still apply to the importation of finished goods or from the general economic impetus of the Zona Franca; and (4) the great state bureaucracies of Suframa and subsidiaries, as well as of other agencies at the federal level and - to a lesser extent - the local state level, who are the representatives of what I have called (borrowing from Karl Wittfogel) "Oriental" or "hydraulic" despotism.

Table 7.1 Free Trade Zone of Manaus: Number of commercial firms by value of importation quotas , 1987

Value of quotas
Number of firms % Total of quotas
(US$ '000)
1,000 or more 15 4.2 30,630 35.8
500-999 33 9.3 21,750 25.3
100-499 148 41.9 23,660 27.6
99 or less 158 44.6 9,730 11.3
Total 354 100.0 85.770 100.0

Source: Resolução 023/87, Gab. Sup. Suframa.

Table 7.2 Free Trade Zone of Manaus: Importation quotas for industrial sector in 1987. distributed by subsectors

Subsector Importation quotas (US$'000)
Electronic 314,130
Watch-making 51,900
Cyclomotors 48,500
Optical 8,900
Other 32,790
Total 456,220

Source: Resolução 023/87, Gab. Sup. Sufrarna.

Table 7.3 Free Trade Zone of Manaus: Industrial firms with importation quotas equal to or larger than US$10m in 1987

Firms Value of quotas (US$m)
Sharp do Brasil S.A. 32.0
Moto Honda S.A. 30.0
Evadim 25.0
Cape 20.0
CCE da Amazonia S.A. 19.5
Semp Toshiba S.A. 17.2
Gradient S.A. 17.0
Sanyo da Amazonia 14.2
Dismac S.A. 13.0
Philco da Amazonia S.A. 12.0
Philco Componentes S.A. 11.5
Philips da Amazonia S.A. 10.0
Total 221.4

Source: Resolução 023/87, Gab. Sup. Suframa.

A final query concerns the people of Manaus and of Amazonia.

Did they gain or lose with the creation of the enclave? A full answer to this all-important question requires far more data than I was able to gather. It certainly can be said that, as a consequence of the tax incentive system of Suframa, employment possibilities have greatly increased in the area of Manaus. But many observers - including several of my interviewees stressed the artificial character of the Free Trade Zone, which is entirely dependent on the continuing good will of the Brazilian federal government. There are also those who mourn the demise of the traditional society and the damage done to the environment. But a long time has already elapsed since the balance of egalitarian societies, in harmony with their milieu, was destroyed in the region. Considering the history of Amazonia since the intrusion of the Europeans, the Free Trade Zone of Manaus is perhaps not the worst of its many evils.


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