Portugal’s problems  are ours to solve, says economist


[email protected]

The International Monetary Fund should not bail-out Portugal says a leading Portuguese economist.

António Gaspar, the Executive Director of APERC, the Portuguese Association of Management Companies and Credit Recovery, believes that the IMF could be disastrous for the country since it doesn’t worry about social and cultural realities.

Instead he believes that Portugal can and should solve its own home-grown problems without external interference.

“I don’t think we need them here, especially given it is the ratings agencies and market speculators that are fuelling this current uncertainty,” he told the Algarve Resident in an exclusive interview.

Instead he believes there is a concerted attack aimed at undermining the Euro and fears that if the contagion spreads to Spain it could spell the end of the Euro in its present form.

The economist also doesn’t believe that Portugal could pay back any multi-billion Euro bail-out package within a reasonably short space of time. In other words, it would be just adding to the country’s already prodigious debt.

António Gaspar also slams some of the proposed IMF austerity measures such as slashing public sector salaries which he says are already among the lowest in Europe.

Instead he has come up with an eight-point package aimed at putting Portugal on a positive footing and it begins with education at both school and college levels and at an entrepreneurial level.

Education needed to be reformed with higher teaching standards and a mechanism for preventing students from leaving school early without the right qualifications.

Taxes need to be lowered to stimulate the economy – one of the reasons, he believes, that there is such a flourishing parallel economy based on tax evasion was that taxes were too high.

He accepted that the Portuguese had a tax evasion culture which needed to be changed through education. “We have a notion here that he who pays all his taxes is dumb and he who avoids paying taxes is smart and that has to change,” he said.

Laws needed to be changed governing the Public Administration, which was too big, but redistribution and reduction needed to be done over the medium to long-term and not overnight to avoid social upheaval.

The political class needed changing. Too many politicians were career and party politicians and in politics for their own singular aims rather than for the good of the country. He slammed the ingrained ‘jobs for the boys’ and ‘cunha’ cultures.

Instead he called for a “new cycle of politics and politicians” since the existing political class was “already a spent force”.

Portugal’s diplomatic class needed to be overhauled with career diplomats drawn from business and commercial backgrounds instead of politics and traditional old-world diplomacy.

“We need ambassadors and their teams to know how business works abroad, what the countries where they are serving need. We need to be putting our companies in touch with their companies and economic movers and shakers and responding to meet those needs,” he said.

Portuguese companies needed to modernise, diversify their product range and continue pushing for foreign exports – only that way would jobs be taken on and taxes increase through increased exports.

Companies needed to take risks; staff needed to take the initiative, the old paternalistic ways had to be swept away and replaced with modern, forward-looking values and ideas.

“We need to think about discipline, excellence, rigor, quality and innovation which have to be a constant and constantly evolving policy in reaction to a constantly changing market,” he concluded.