The road to perdition .jpg

The road to perdition


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Skip Bandele moved to the Algarve 10 years ago and has been with the Algarve Resident since 2003. His writing reflects views and opinions formed while living in Africa, Germany and England as well as Portugal.

I did study macro-economics at university a long time ago as part of an International Relations degree, but in essence the views and experiences offered up here are those of a layman. You do not have to be an academic to give an informed opinion on the situation we currently find ourselves in – merely someone who has to go out and work, master the weekly shopping and meet the monthly bills – in other words you or me, forced to make the best of others’ mistakes. My sole advantage is that I am privileged enough to be afforded the forum to voice mine in public.

After the very peaceful Carnation Revolution of 1974, the hard-working population of Portugal and its’ newly elected representatives wholeheartedly embraced all things European, culminating in 1986 EEC membership, exactly 60 years after António de Oliveira Salazar had seized power. Many subsequently rudely splashed around in the billions of subsidies pumped into the country by Brussels thereafter while others, skilled artisans and much sought-after craftsmen and women, left to seek their fortune abroad. In fact, I do not know of another country in the world that can point at the fact that almost 50 per cent again of its sedentary population lives and works outside its borders, anywhere from France, Switzerland, Germany, Canada and the United States as well as more recently Britain and Spain.

Meanwhile, back home the fledgling democracy, still effectively functioning on a system of pre-dictatorship patronage, gratefully diverted a healthy chunk of blue-eyed European moneys into its’ own pockets while allocating ‘jobs to the boys’, resulting in very much less than full investment in an economy which had severely stagnated under the previous regime.

But the infrastructure was improved. Retrospectively impossibly expensive highways were built north and south of Lisbon to enable the more affluent and nouveau riche to reach their Algarve holiday homes in more comfort, these same annual visitors plastering the once picturesque coastline with concrete monstrosities financed by new money in order to accommodate the in-pouring foreign mass-tourism.

Corporate ‘tourists’ also joined the rush west, taking advantage of EU industrial relocation incentives from Porto to Palmela, creating automotive, hi-tech, software and manufacturing industries, while the domestic cork, cement, wine, agricultural, fishery and textile sectors, following a brief hiatus, started a rapid and permanent decline. No-one bothered to look beyond the apparent ‘lottery win’, however glaringly short-sighted the feast may have appeared to the more economically astute. As demand for luxury goods grew, prices started to rise while wages remained more or less stable. Domestic production was neglected and the taxman, who did not appear particularly bothered, was handed the absolute minimum necessary in order to maintain appearances while continuing to finance the now accustomed, more lavish life style. Cheers once more accompanied the introduction of the single currency, Portugal proudly becoming one of the founding members, the mutual back-patting only starting to hurt once the exact conversion rate – 200 escudos equalling one euro – escalated to a general upward price-adjustment of twice that ratio within the first 18 months, halving the real purchasing power of incomes which had experienced no such boost. The pint of lager previously highest-priced at the said 200 escudos, for example, suddenly cost two euros, and this relationship became mirrored across the general shopping basket. As many older Portuguese still thought in ‘contos’ and compared prices in the old currency, those same goods now priced in cents and euros drove upwards until costing as much, if not more, than in much richer European economies while the average wage earner still took exactly the same money home as before.

Already toppling on the brink of a disaster, more previously disadvantaged former Soviet Block eastern European states joined the happy EU family encouraging manufacturers to relocate once more with renewed incentives from Brussels while offering work at much lower labour costs than their now struggling Portuguese counterparts who suddenly found themselves shorn of their previous competitive edge.

Similarly, a booming China severely undercut the price at which every dish and beach towel or piece of clothing could be produced anywhere from Braga to Porto and points south while EU fishery quotas combined with improved mechanisation from Spain to Chile and Africa dealt the death knell to the last remaining Algarve sardine canning factories. Plastic was becoming more fashionable in topping wine bottles, marble no longer the ‘in’ furnishing material, the list is endless. And then the stricken nation was additionally kicked where it hurts most when already well and truly down by the shock-waves of the international credit crunch.

Despite the President of the Republic Cavaco Silva, himself an economist, giving televised assurances to the contrary, the crisis has arrived in Portugal with a vengeance and is here to stay. Today unemployment is climbing rapidly beyond the eight per cent mark as what little domestic manufacturing there has been sustained over the past two decades is shutting down almost as quickly as José Sócrates is breaking pre-election promises, necessitated by a lack of orders, pre-empted by a non competitive environment, followed by hotels failing to re-open for the new season as tourists are staying away in droves, prompted by a British pound drastically devalued, directly affecting half the Algarve’s traditional holiday market in particular and exports in general. Everyone is suffering and the greed and lack of vision do not permit even a glimpse of light at the end of the tunnel.

There is an exodus of despair de-populating Portugal at an ever increasing pace. Even the Ukrainians are decamping for St. Elsewhere. Soon the country will be purely a home for the retired fortunate enough to have been able to hold on to some of their wealth, the carpet baggers every depression inevitably throws up, and the robber barons responsible for devastating a land once facing a very promising future fortifying their palaces against the alarming rise in crime. Portugal’s relatively recent and long awaited freedom has been turned into an economic prison created almost overnight by the avaricious few. The failings of the past have made for one of the poorest countries in the extended European Community remaining so while showing the lowest Gross Domestic Product per capita anywhere west of Romania. A legacy that this generation, the next and the one thereafter are expected to pay for dearly.