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Governance

21st Century Political Landscape

Successive governments led by communists, socialists and social-democrats took turns managing Portugal. Portugal joined the EC in 1986. Socialist Prime Minister Mario Soares tenure managed to handcuff any chances for progress by signing treaties with the EU which destroyed the Portuguese agricultural and fishing industries to the benefit of the EU richer countries. Without prosperity in those two basic economic pillars of the Portuguese commercial balance, Portugal was forced to go on an import binge which contributed to the demise of its present economy.

Joining the EC gave the country a temporary boost with a flurry of grants and investments that contributed to new roads and an overall upgrade of a dilapidated infrastructure. Under the tutelage of Prime Minister Anibal Cavaco Silva, Portugal saw strong adherence to policies that allowed for little or no government control over the ROI of public and private investments. The country saw billions of Euros invested in non-ROI producing projects and millions more lost due to government corruption and money laundering. Decades later Silva was found to be tied to questionable and conflicting investments in the banking industry with some of his close associates winning an extended holiday in the Portuguese penal system. Cavaco Silva’s tenure was the beginning of an era of policies which ended up with the country functionally bankrupt and in the hands of the IMF and the EC Central Bank. Two decades later, Anibal Cavaco Silva was rewarded with a two term election to President of Portugal by its people. Affectionately known as “Mumia” (The Mummy”) for its single role of ribbon cutting, lack of leadership and refusal to participate in the betterment of social-economic issues, Silva presides over a country still led by his friends and recipients of political favors.

Pedro Passos Coelho, Portugal’s sitting Prime Minister, is facing the arduous task of balancing the need to repay the huge debt with making the economy grow. Severe cuts have been made across areas such as pensions, retirement compensation, health care, education and elimination of blue collar jobs. Recently Passos Coelho government suggested and encouraged immigration of middle class professionals to every corner of the world which will most likely result in a dangerous drain of qualified professionals, leaving the country in the hands of the very rich and the very poor. The percentage of millionaires in Portugal has increased in the past fiver years along with the increase of the amount of people living below the already extremely low poverty level. Portugal’s average salary is the lowest in Europe. Inequality has never been more salient in Portugal and the risk of social unrest higher. The latest bankruptcy of the Espirito Santo Group, one of Portugal’s largest economic groups, and the related equity crash of Portugal Telecom, the communications giant monopoly, are the results incestuous and ill-fated relationship between the richest few and the government. The government lack of a reality compass was summarized by Passos Coelho’s statement of being “surprised that the buying power of the Portuguese citizens decreased”. The government continues to spend at will, refusing to cut its own fat and spending more money per politician than any other country in Europe. They consistently miss budget targets. Political parties and the Parliament are obese machines that provide very little value while sucking an extraordinary amount of money from tax payers. If the House of Representatives in the USA was to have the same ratio of representatives to the people they serve as the Portuguese parliament, it would need around 8000 Assembly members. The great percentage of parliamentarians do nothing but vote along party lines while moonlighting in conflict-of-interest jobs and boasting the poorest attendance rates in Europe. Many representatives work for the same firms that benefit from legislation approved and passed on the floor of Parliament. And that is perfectly legal in Portugal.

In early 2015 former PM Jose Socrates was jailed on corruption charges. In the mean time deputy PM Paulo Portas come out defending the “golden visa”, a program laced with scandal and corruption where it’s former head of emigration is also waiting judgment on corruption charges. Portas simply defends a program that exchanges residency for money. Critics call this a “visa dispensation to the wealthy” where rich Chinese, Brazilians, Colombians, Angolans and others buy their way into Portugal and therefore into the European Union. Portas was also involved in a corruption case where millions of Euros where invested in buying submarines from Germany in a shady deal where millions exchanged hands, some of it untraceable. The case was promptly shelved by the Portuguese Justice department while promptly condemned as illegal by the German courts. in March of 2015 PM Coelho was found to have skipped paying social security taxes for 5 years. Coelho used “lack of funds and ignorance” and was promptly excused of his mistake by his party leader and other prominent politicians. In the meantime “regular” citizens are prosecuted implacably for missing as much as an euro worth of taxes.

As recently as the first quarter of 2015, Maria Luis Albuquerque, Portugal’s finance minister declared that Portugal was in good shape because it “had its coffers full” dawning a veil of deceit on those less knowledgeable in the matters of finance. Coffers full for Maria Luis meant having enough money to pay the next debt payment while supplying the government with another line of credit for their vanity purchases. True to form the government announced the purchased of a brand new car fleet for its ministers offices. Months earlier Maria Luis’ husband, Antonio Albuquerque, a career news media man, was given a position as a consultant to EDP, the Portuguese Chinese owned energy company. How a news man can become an expert and consultant on energy matters is a mystery, but in 2011 Maria Luis, as treasury minister, had overseen the sale of 25% of the then state owned company to the Three Gorges Chinese company, now a majority owner of EDP, and to whom Mr. Albuquerque consults. Another moment of complete verbal and mental ineptitude was when Maria Luis declared that a Greece default and exit from the Euro would not affect Portugal. Literally every economist alive has stated that a Greek default and exit from the EC would affect every country of the EC specially Portugal, Italy and Ireland. Mrs Albuquerque know best apparently.

If Portugal is to raise about its current sad state of affairs, it will have to be with less reliance on its ineffective government and more in the merit, hard work, and innovation that its people are known for around the world. The Portuguese government has stopped innovating since royal times when Henry the Navigator discovered the sextant and the new world, and it sits with its hands extended to EC’s charity. Its People, the private sector, entrepreneurs and free lancers however, are hard workers, imaginative, and innovative. Companies from high-tech to wine producers to fisheries are bypassing the molasses mentality of government handouts to create their own solutions, to innovate, to build, produce and export. It is the increase of trade and commerce outside its borders along with IP export that will improve the tax revenue, pay the bills, and bail out the inefficient partycracy government machine. What Portugal hopes is that its people do what its government cannot do.