Manaus
A tax-incentive city manufacturing Samsung phones in the Amazon with no road out — a strangler fig economy growing around the dead trunk of the rubber boom.
Brazil's Zona Franca de Manaus produces Samsung phones, Honda motorcycles, and LG televisions in a city with no road connection to the rest of the country. Over 600 multinational brands manufacture goods in the middle of the Amazon rainforest, 900 miles inland from the Atlantic, because tax incentives make the logistics penalty worth absorbing. The free trade zone generates over 60% of its output from electronics and motorcycles — products with zero connection to the surrounding ecosystem.
Over 600 multinational brands manufacture goods in the middle of the Amazon rainforest because tax incentives make the logistics penalty worth absorbing.
This arrangement is entirely artificial. In 1967, Brazil's military government created the Zona Franca to populate and claim sovereignty over the Amazon — niche construction in its purest form. The incentives work: an 88% reduction in import duties, up to 75% off corporate income tax, and duty exemptions that have been extended through 2073. The result is a 2.4-million-person industrial city surrounded by intact rainforest, where 98% of Amazonas state remains forested precisely because the jobs are in factories, not farms.
Manaus has done this before. The rubber boom of the 1890s transformed it into the 'Paris of the Tropics,' wealthy enough to build the Teatro Amazonas opera house with Italian marble and French glass. When Southeast Asian rubber plantations undercut Amazonian latex, the city collapsed so completely that the opera house closed for nearly 90 years. The same resource that created extraordinary wealth became worthless through competitive displacement.
The free trade zone is the second growth around the dead trunk — a strangler fig economy that uses the host's structure while building something entirely new. But the new structure carries its own vulnerability. Despite generous tax breaks costing Brazil billions in forgone revenue, studies show Zona Franca factories are no more efficient than factories elsewhere in the country. The zone survives not on competitive advantage but on regulatory subsidy.
Manaus demonstrates that artificial ecosystems require permanent life support. Remove the tax incentive and the factories leave overnight, just as the rubber economy vanished when the monopoly broke.