The man chosen to map Portugal’s path to a better future has given some stark warnings this week.
António Costa e Silva – whose ‘normal job’ sees him running oil company Partex – has warned that the situation of many businesses could deteriorate “significantly” over the next couple of months.
“It’s fundamental that an aggressive programme is in place to avoid the collapse of healthy businesses”, he has told ministers presented with his plan at yesterday’s (Thursday’s) Council of Ministers.
The blueprint was largely ‘traced out’ in May (click here).
The document delivered to PS power makers this week has simply added meat to the bones of an ambitious plan to reindustrialise and improve rail-links, specifically between Lisbon and Porto.
As was explained back in May, Costa e Silva has a background in ‘exploration’: thus ‘mining’ is high on the agenda, including projects to produce lithium, niobium, tantalum and ‘rare earths’.
Where these projects will be sited – what areas of the country face being ‘turned upside down’ for their mineral wealth – is still unclear.
But the urgency for recovery is undeniable.
According to INE (national statistics institute) business investment is expected to fall by 8.9% in 2020, with ‘transforming industries’, commerce and the car repair sector ‘worst affected’.
Costa e Silva’s plan involves the State taking a major role at the outset of a generalised recapitalisation, and then, as businesses recover, starting to take a step back.
Explains ECO online, his ideas are based very much on those of economists and philosophers Karl Polanyi, Joseph Stiglitz and Amartya Sem.
And he has referred specifically to two major moments in history: the first being the famous “New Deal” of US President Roosevelt to deal with the consequences of the Great Depression, and the second being the Conservative ‘revolution’ of the 80s and 90s when President Regan and Margaret Thatcher in UK encouraged the “exponentiation of the role of self-regulated markets”.
In other words, Portugal’s recovery is a ‘long term’ plan, designed to strengthen the country from the bottom up until it’s ready to stand back on its feet.
For now, it is presented as a strategy to 203o, with various key ‘musts’ – the support of small and medium sized businesses, recapitalisation of industries and construction of high-speed rail links, hospitals and social housing projects being pivotal.
The plan is to be debated by MPs and strategies formed. But it looks highly likely that changes (and new support programmes) will be emerging before the end of the summer.
