Recipes for success
A demand-driven recovery policy, supported by a social policy: this is how it could be summed up.
When he took office in 2015, Antonio Costa pledged to turn the page on the austerity that had taken hold of the country. In order to fulfil his promise, he gradually raised the minimum wage, reviewed the problem of civil servants' pay and the pension system, which had been severely and directly affected by the crisis. Households have been able to consume again and more thanks to a programme to combat precariousness and a new economic dynamism.
A revival of export-oriented industries such as the automotive, footwear and textile sectors, which had almost disappeared from the economic landscape, also supported the recovery, while at the same time Portugal has welcomed a growing number of foreign companies that continue to invest.
For example, Chinese investment groups have freed up several billion euros and have become shareholders in Portugal's largest insurance company, the REN electricity network and Millennium Banco Comercial Português, the country's main private bank.
What benefits the Algarve in particular is the continued mass arrival of thousands of European pensioners, which has earned it the nickname of Europe's Côte d'Azur. In 2009, at the height of the crisis, the country had granted 10 years of tax exemption. Conditions are slowly evolving but the tax advantages remain as attractive as ever. The revitalization of tourism is considerable in the region and has also largely contributed to this economic miracle thanks, among other things, to high-end real estate projects. Tourism is part of the service sector (68.3% of the working population) which continues to grow and plays a crucial and decisive role in the Portuguese economy.What are the new economic challenges?
Reappointed Socialist Antonio Costa and his new government (with 10 seats of absolute majority in Parliament) will face several challenges. First of all, by addressing the crucial issue of soaring real estate prices, the result of several factors, including the settlement of foreign expatriates, the success of Airbnb-type rentals, among others, which have contributed to an increase in prices. In 2019, civil servants will begin a series of strikes, demonstrating their dissatisfaction and disappointment with the socialist government's expectations. The country will also face another test, that of its demographics, an ageing local population and the departure of an impressive number of citizens at the heart of the crisis, pushed by the government actors of the time.
Faced with a shortage of labour, the authorities are now seeking to repatriate them. According to official estimates, about two-thirds of them have responded to the call. As for the number of immigrants living in Portugal, according to the OECD, the figure has jumped by 21% in 2017.Lithium, the new "white gold"..
And if this general economic and tourist boom wasn't enough, there is now lithium (the raw material used in the manufacture of batteries for electric cars and telephones). Portugal, which has the largest lithium deposit in Europe, no longer wants to be satisfied with receiving royalties from the extraction activity, but wants to develop industrial sectors linked to the processing of this ore. The idea is promising, but has met with mixed reactions. Indeed, to extract lithium from the subsoil, it is necessary to dig open-pit mines and build factories to concentrate it.
Environmental commitments
In terms of renewable energy, Portugal aims to become carbon neutral within 30 years and has decided to go faster than its European neighbours. It is constantly investing in clean electricity, solar, wind and water. More than 250 wind farms are spreading across the country and this energy alone accounts for 25% of consumption; 220 dams complete the energy landscape. In the Algarve, many companies are committed to preserving the region's unique biodiversity. These include, for example, eco-responsible real estate projects whose actions are based on bioclimatic architecture, geothermal systems or better water management. The entire country, according to observers, is on the way to becoming one of the greenest on the planet.
Marcelo, a president "de l'affect"
President Marcelo Rebelo de Sousa, in office since March 2016, renowned for his culture and sharp intelligence, cultivates proximity with the population. He can be seen swimming among the other swimmers on Cascais beach or, during disasters, taking people in his arms to console them. Better still, in August 2020, while on holiday in the Algarve, the 71-year-old president saved two little girls from drowning, an act of bravery that has been particularly commented on the networks, and rightly so. A simplicity and closeness that earned him the nickname "president of affect". His popularity rating reaches 18 out of 20, enough to make any political leader green with envy.
Things are happening in Parliament
This left-wing government is curiously stable, yet it brings together, surprisingly, the Portuguese Communist Party, ecologists and a radical left-wing bloc. The brand new Parliament that emerged from the ballot boxes in October 2019 presents some novelties: the entry of the brand new party IL Initiativa Liberal founded in 2017, with 1 deputy, which advocates the end of public service in education and health, and a tax grab of 15% from €650 of income per month. The very active PAN, acronym of People Animals Nature, now weighs in the political game and hopes to be associated with the negotiations with the Socialist Party, the big winner of the election (106 deputies out of 230). Finally, the election of a deputy from the former colonies, present in the National Assembly, appears to be a thumb of nose to the far-right Chega party ! A real first!
