Industrial and Foreign Trade Policy (PICE)
Running along in parallel with the Collor Plan was the PICE, a program which aimed to both raise real wages and promote economic openness and trade liberalization.
Selected policies included the gradual reduction of tariffs (with the selective protection of certain key industries), an export financing mechanism through the creation of a Foreign Trade Bank (similar to the American Ex-Im Bank), reduction in customs duties, implementation of anti-dumping mechanisms and the use of government-generated demand for high-tech sectors.
On paper, the PICE had seemingly contradictory goals: to stimulate the entry of foreign companies while increasing local innovation.
Later studies by the Institute of Applied Economic Research (IPEA), an independent government think tank, argued that the policy seemed to have produced that very contradictory effect: local production saw improvements in quality and productivity in face of foreign competition, but it simultaneously curbed domestic innovation due to unrestricted competition from imported technology.
Read more about this topic: Plano Collor
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