The thin edge of the wedge

As you can imagine, I read lots of newspapers and magazines, mainly Portuguese, with some English and American for good measure. I am not an avid internet trawler, but when I have time I like to check out my favourite ‘alternative’ sites. I subscribe to a couple of interesting magazines, and receive various other newsletters. I sometimes think I am in information overload, and I have to filter through a lot of stuff that is of no interest to me at all to find the nuggets hidden in there somewhere. But, when you put these nuggets together, they often make an interesting picture.

For instance, here in Portugal now, five per cent of the population is immigrants, in other words, people who are not Portuguese, but live here. That doesn’t take into account all those expats who are not officially registered here, of course, because they do not want to be on anybody’s lists. But, looking at the overall picture, that means that one in 20 people are not Portuguese, and that there are around half a million foreigners in this small country. For the first time, the number of Ukranians has overtaken the number of Cabo Verdians and Brazilians – 60,000, 59,000 and 58,000 respectively. What does that mean? I think it points to several things. First of all, most of these immigrants are at the bottom end of the economic scale – for the time being. Many of the Brazilian women – and, increasingly, those from Eastern Europe – are forced into what is politely called ‘the service industry’ – bullsh*t! It is prostitution, the oldest profession, and it is not a pretty picture. The men work in the construction industry or, if they are lucky, they rise to something like catering or hotel work. Watching the Portuguese TV news we see the very occasional stories of immigrants who have suffered dreadful accidents on building sites and are left without any compensation because their bosses were not, after all, paying their social security contributions. We hear of immigrants, usually from the East, who die, sometimes violently, and whose bodies are rotting in hospital morgues because nobody has the money to send the body home for a decent burial. It is far cheaper to send an immigrant home while they are still alive.

But these people are not stupid. My experience is mainly of those from Eastern Europe rather than Cabo Verde or Brazil, and that tells me that they fall into various groups. One group has a family at home, and is sending back all the money they can to provide an education for their children, or to buy a house for their family in their home country. Some of these guys come for a couple of years, don’t want to get legal because that implies paying tax which could otherwise be sent home, and go home when they have bought their house or whatever. But there is another group that intends to stay here. They have jumped through all the hoops, they have their papers and they pay their taxes. Their wives have joined them, they are having babies and starting families here. By our standards, their earnings may be pitifully low, but they are slowly making their homes here and becoming part of the resident society. If sheer force of numbers means anything, they will soon have a tremendous influence on the way of life. Already they have their own shops selling products from Russia and Ukraine, normally via Germany. They have their own Russian-language newspapers and, I am told, there is even a Romanian daily newspaper. which is now printed here twice a week and distributed. If you think that is silly, think how many of you buy an English newspaper every day or every week – you like to keep in touch with your home country, so why shouldn’t they?

These people have money to spend. Not a lot, perhaps, not right now, but they will have increasing disposable income. As we all know, a lot of it seems to go on cigarettes, beer and coffee – but then, is that so different from many other expats? As they become more established, they will want other consumer goods – who is going to address that market? Who is going to employ some of the bright cookies who are labouring on building sites and get them selling the items that these immigrants want? Or – even more radical – which retailers or service providers are going to learn Russian to attack that market? Is anyone going to be brave enough to finance a restaurant and find the ones who have catering experience, and open a place that is a showcase for their fine cuisine? From the few dishes I have tasted, our taste buds could be in for a treat!

And look at it another way. We are told that there are 60,000 Ukranians here. Let’s assume that there are another 30,000 who have not been discovered yet – that’s 90,000. Let’s say that 50 per cent of them are sending money home each week or each month. If they are lucky, they get five euros an hour, so if they get paid as they should, each one should be able to send home 50 per cent of his earnings, or around 500 euros a month. Do you realise how much that is going out of the country each month? 45,000 x 500 euros is an awful lot of euros. And, one way or another, it is stimulating the economy of the country that is receiving it.

And remember, come May 2004, the EU opens its doors to even more countries from Eastern Europe – including Romania, but not Ukraine. That gives them freedom to travel and work anywhere in Europe just as it does to those of us from UK, Ireland, Germany or wherever else we smugly consider ‘Europe’. And before you throw up your hands in horror and say, “we can’t cope with any more of them”, stop and think. If they can come over here – you can go over there, too. And, indeed, some of the smart property and investment money is already there. Property is cheap, certainly by Algarve standards, the countryside is beautiful and they have fabulous beaches. They will eventually be adopting the euro and all the other benchmarks that make them good Europeans. The thin edge of the wedge it may be – but which way is the wedge pointing?