Brazil's "Reserved Market" Policy

Disclaimer - These are my opinions only and don't represent those of anyone else ( certainly not those of LSI - USP ). Historically, in fact, these opinions have conflicted with those of almost everyone I have ever met!

The facts described here are from memory; I hope to update this page with any necessary corrections in the future.

The military government ( 1964 to 1985 ) invested heavily in the industrial infrastructure leading to the "miracle" of the early 70s. This allowed ( and the resulting huge foreign debt encouraged ) an aggressive export agenda and an isolationist import policy.

The Navy came to see the country's total dependence on foreign computer technology as a serious threat to national security ( as military equipment became increasingly computerized ). The development of "home grown" prototypes at the major universities shattered the myth that the country lacked the skills to be an active force in high technology.

These factors led to the creation of the "reserved market policy" that only allowed companies with 100% Brazilian ownership to make or sell micro and mini computers. A state company was set up ( COBRA ) and half a dozen private firms were allowed to "import" mini computer technologies.

A few years later ( 1981 ), the first micros ( TRS80, Sinclair ZX80 and Apple ][ clones ) started flooding the market, leading the original group of mini makers to ask for a few years ban on micros to allow them to recover their investments. The newly organized Special Secretariat for "Informatics" ( SEI ) wisely refused. At the same time, the scope of the policy was greatly extended so that a Ford/Philco IC plant had to be sold to mini maker SID and Texas Instrument had to give up its expansion plans.

SEI ignored the nearly 100% piracy rate in order to encourage the hardware manufacturers ( buy an Apple clone and get five free text editors... ), which limited the local programmers to niches like communications ( weird local standards ) or bank automation.

In 1984, the reserved market policy became law in one of congress's most unanimous votes ever ( only two against ). SEI reversed its stance on software and tried hard to jump start local developers. By 1986, it refused to approve hardware projects ( the approval was needed for permission to sell ) without a locally developed OS ( or at least a license from a local competitor ).

This phase was SEI's most radical. They tried to band all projects around the i8088 CPU, which Elebra promised to make locally in a few years. It pressured Unitron to redesign its Macintosh clone with 5 1/4 inch floppies to avoid imports ( Unitron set up its own disk factory to cope ) and wanted Softec to help start up a local LCD factory for its new portables.

1987 was the turning point - though the new "software law" only allowed foreign programs with no similar Brazilian one, Microsoft pressure lead SEI to declare that Scopus' Sisne OS was not similar to MS-DOS 3.3 ( even though it was similar to DOS 3.2 ). Apple got direct US government action against Brazil's exports ( mainly shoes and orange juice ) and SEI pressured Unitron to withdraw its Mac 512 project. As it refused, the government was forced to reject its application on the grounds that it was not a fully original project ( though a sea of PC clones apparently were... ).

In 1988 foreign workstations started to appear - a waiver to the law had to be granted ( they were clearly not mainframes ) due to the total lack of local alternatives. In 1990 the new president ( Fernando Collor, impeached in 1992 ) made a drastic move to open the local market, while his economic plan proved very recessive. The reserved market policy was effectively dead some time before its official October, 1992 deadline.

see also:
| reserve | | pegasus | | merlin1 | | merlin2 | | merlin4 |
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| history | | merlin | | LSI | | USP |

please send comments to (Jecel Mattos de Assumpcao Jr), who changed this page on Jun 29, 17:08 .