Wednesday, November 24, 2010

FOCUS
Deepening anxiety in the Algarve

Today's nationwide general strike is unlikely to do anything to dispel deeping public anxiety about unemployment, job insecurity, pay cuts and rising prices in the Algarve.

The prevailing mood among workers seems to be despondency rather than outright anger, a feeling of fatalistic pessimism rather than demonstrative outrage.

The mood had set in long before the Government announced its 2011 budget, which includes cuts in civil servants' pay along with a hike in value-added tax from 21 percent to 23 percent. These austerity measures are only part of the story.

Although the Government is taking the brunt of today's nationwide expression of dissatisfaction, it is only partly to blame. External factors have been at work.

From time immemorial, fishing and farming were the twin pillars of the Algarve's economy. Tourism and property development started taking over in the 1960s but were interrupted by the 1974 revolution.

Once democracy had become firmly established, tourism and property development greatly expanded. Boosted by Portugal's entry into the EEC in 1986, they quickly eclipsed the traditional sources of income and employment.

During the first six years of the new millennium the Algarve had never had it so good. Then came the crunch. The warning signs emerged in 2007. The storm broke in 2008. It worsened in 2009. The crisis has rocked us this year and will almost certainly continue throughout 2011.

Tourism has taken a bashing because of conditions in our main market, the UK. Suffering austerities of their own at home, British holidaymakers were insisting more than ever on value for money. The exchange rates put a lot of visitors off. The pound and the euro now have almost the same value. The competition from inexpensive destinations in eastern Europe is fierce. In some ways – golf for example – the Algarve is in danger of out-pricing itself. Fortnights of fun in the Algarve sun at little cost are a thing of the past.

For the first time in decades, major tour operators have discontinued winter flights, thus adding to the already alarming number of job losses and business closures in the tourism sector.

The slump in the property market is even worse. Construction companies, suppliers of building materials, estate agents, decorators, furniture firms, landscape gardeners and everyone else involved are having a very hard time in a once booming sector that is now virtually moribund.

The knock-on effects are being felt in all other sections of the community. Wth so many people out of work, worried about being forced out of work, or having no option but to accept lower incomes in the face of ever-increasing prices for everyday needs, it is no wonder there is anxiety out there.

Interestingly, a recent poll in the United States showed that the things disturbing Americans the most are the economy, the government and unemployment. A similar poll in Portugal might come to the same conclusion.

Today's general strike is focusing on the Government's new austerity measures. It will be an opportunity to let off steam, but what lasting good will it do? Is the strike in the country's best interests?

It is unclear if the motives of today's action are directed by objective reason, fairness, balance and public-spiritedness, or whether they are essentially selfish.
Are we talking about abuses of power, either by the big unions on the one hand, or by the big bosses and the state on the other?

Are the protestors dutifully obeying union demands, displaying admirable togetherness in adversity, or acting out of fear of losing their livlihoods upon which the well-being of their families depend? Perhaps all three.

The right to strike is firmly respected in Portugal and this was reiterated the other day by Prime Minister Jósé Sócrates whose Government is now in the firing line.

The most unpopular man in the country today is Finance Minister Teixeira dos Santos. He has been dismissive of today's strike. “Trade unions have called it, they have a right to do so, but that won’t change the government’s mind about what needs to be done,” he said during a recent press conference.

“The country’s financing capacity is at stake” and that fiscal consolidation will be “harsh and demanding” but it needs to be done, otherwise “the nation’s situation will be much worse than people imagine,” said the finance minister.

Of course the whole thing comes down to money. The strike itself is going to cost the country many millions of euros in lost productivity. It remains to be seen whether it will be worth it.

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