Time to face the ‘raw and naked’ truth

PORTUGAL must face up to facts and reform its institutions, increase productivity and boost exports if it is to solve its economic problems, according to former Portuguese Prime Minister, Dr. Aníbal Cavaco Silva. Resident reporter, Chris Graeme, listened as the controversial Conservative economist spoke to the National Association for Young Businessmen (ANJE), and explained that every country within the original European Union had increased its exports – except Portugal.

Cavaco Silva graphically illustrated his point, saying that in 1990 Portugal’s exports represented 33 per cent of its GDP. By 2003 this figure had fallen to 30.8 per cent. Spain’s exports, on the other hand, represented 16.3 per cent of its GDP in 1990, rising to an impressive 28 per cent in 2003 – a clear demonstration of how Portugal is lagging further and further behind its Iberian neighbour. “Portugal is experiencing a difficult economic situation that will probably continue until 2006,” said Cavaco Silva. “In order to reverse this backward trend we must increase our weight in the exportation of goods and services.”

The former prime minister criticised successive governments’ attempts to kick-start the economy via internal and consumer demand, as leading only to ‘flash in the pans’. “There is no time left to pull rabbits out of hats and speak hot air,” he warned, “when public finances are out of control and the average family debt is running at 118 per cent of total income.” According to Cavaco Silva, unless the country’s new medium sized companies take the initiative and start producing quality goods and services that other countries want, the government will never close the ever-widening gap between Portugal and the rest of Europe. “If we don’t do this we’re in trouble and all the other measures are merely illusions,” he stated.

PSD politician, Cavaco Silva, who is a candidate for the Portuguese presidency, outlined three main battlefronts Portugal is currently facing and must win. Cavaco says that the state must become more efficient, be better run and bureaucracy must be cut, society must become less centralised and more independent from the government, and productivity per capita in both government and private companies must increase, while education and training must be tailored to the needs of the economy.

“We must face facts, it’s the raw and naked truth that we’re not capable of penetrating international markets where competition is strong and productivity is higher,” he said, warning that the liberalisation of the textile markets in India and China would only further damage Portugal’s fortunes. He also stressed that it was high time for competent politicians to “dump” the incompetent ones, saying that the time has come to “blow the whistle on present tendencies to allow mediocre politicians to take centre stage”.