The skyline of the Portuguese capital is one littered with signs of construction. Cranes tower over buildings encased with scaffolding as Lisbon’s infrastructure propels forward at an impressive rate. Tourism, in locations besides the Algarve, is experiencing healthy growth whilst Portuguese exports continue to rise. However, to what extent does this (rather artificial) economic sketch correspond to the reality of development throughout the country as a whole? Despite its recent separation from the 2011 €78 billion bailout programme, Portugal does not necessarily remain wholly detached from economic concern.
Recently, there has been a significant concern over Portugal’s debt burden and its deteriorating speed of reform. The government debt hit 127% of GDP this year, thereby leaving the country fairly vulnerable to any form of prolonged financial market trouble. Furthermore, the IMF have released a statement holding the view that the Portuguese nation still faces the risk of failing to reduce this year’s budget deficit below 3% of national output, as instructed under EU law. The IMF also drew attention to Portugal’s consumer loan arrears, which have doubled in size since 2009 and look likely to increase again this year.
Perhaps one of the main causes of such economic instability has been the mass exodus of young, skilled workers from the country over recent years. From 2011 to 2014, punishing austerity measures and a deep, prevailing recession tempted many Portuguese graduates away from their own country. As of March 2015, it was thought around 400,000 people (largely young and skilled) had left the country as a result of economic turmoil. This is a huge blow in a country of just 10 million.
The Lure of Lisbon and a Bright Future for Portugal?
If we ignore the statistics for Portugal as a whole and focus on the capital instead, one seems to come across a rather separate and more positive situation. Having been labelled the ‘Bangalore of Europe’ for its concentration of call centre services, Lisbon has attracted back many 1960s emigrants that, today, include many native French and German speakers. This influx of new skill has tended to work harmoniously alongside many new, young entrepreneurs who are making use of the excess of free space within the capital. With many derelict buildings, the youthful and creative Portuguese have taken it upon themselves to transform them into a variety of facilities, such as neighbourhood restaurants or social community spaces. Areas such as Cozinha Popular da Mouraria and developments such as a popular LX Factory are 2 prominent examples of such innovation.
In addition to this, the 2015 World Ocean Summit was held at The Oitavos, Cascais at the beginning of June. This focused on Portugal’s transition from a conventional ocean economy to a new ‘blue’ economy through the identification of practical and realistic solutions to tensions between economic development and environmental sustainability.
Hence, an image emerges today of the Portuguese economy as one held within a delicate balance. If Lisbon continues its rapid development at a sustained rate, will this result in significant benefits to the rest of the country in years to come? Or will Portugal need a more balanced approach to dealing with its economic difficulties?