Crisis sparks new ideas - and fantasies

Three stories emerged this week that gave some respite from the unremitting gloom on offer from the national and international media about Portugal’s economic crisis.

In very different ways, each of these stories shows that while the current crisis has created crippling problems, it has also presented opportunities.

A report from Lisbon on the France 24 television channel extolled the virtues of young people who have chosen to stay at home in austerity-riven Portugal and meet the challenges head-on rather than emigrate to seek employment elsewhere. It gave examples of young entrepreneurs setting up their own businesses – creating their own work instead of remaining jobless or exacerbating the brain drain.

One of those interviewed on the programme was a maths graduate who is heading a company using modern methods to produce vegetables. With agriculture now a growth sector (in more ways than one) and likely to help Portugal emerge from recession, other graduates who in better times might have considered becoming doctors or lawyers are now passionately returning to the land with entrepreneurial success rather than the more widspread pessimism firmly in mind.

Some of those who have gone abroad have done rather well too, of course. Luis Amaral is a remarkable case in point. In 2003 he bought Eurocash, a struggling Warsaw-based grocery business, for $30 million. Now Poland’s biggest distributor of non-durable goods, Eurocash last year sold, among other things, about three million bottles of champagne and 7.8 million lollipops.

The company’s value has surged more than fifteen-fold since selling shares in an initial public offering in 2005, helping Amaral, the 51-year-old CEO, amass a $1.1 billion fortune, according to the Bloomberg Billionaires Index.

Bloomberg quoted a Vienna-based analyst as saying of Amaral: “He’s a visionary who created a custom-built business for the Polish market. Eurocash has helped traditional retailers to survive against the onslaught of giant supermarkets.”

No wonder Amaral is happy to be in Poland.  He lambasted the Portuguese education system because it “promotes mediocrity,” the judicial system under which “crime pays,” and the financial system that “gives money to people and not to ideas.”

In a rather more quirky story that first broke around Christmas time, there were further revelations this week about  Artur Baptista da Silva, the widely-quoted pundit who told the Portuguese weekly Expresso last month that Portugal needed to renegotiate its bailout package or risk social problems spinning out of control. 

“If it's not negotiated now, then in six months' time, we'd have to do it on our knees. All the projections that we've done for the economy, debt, unemployment, lead us to believe that Portugal will be in serious difficulties in terms of social control in half a year,” warned Baptista da Silva in a report relayed by the Reuters news agency. It sounded sensible enough.

His comments during a debate at the prestigious International Club in Lisbon were greeted with thunderous applause and a part-standing ovation, according to the Spanish newspaper El País. He was taken seriously as an expert by the news media because he was an ex-presidential consultant, a former adviser to the World Bank, a financial researcher for the United Nations and a professor of social economics at a US university.

Well, actually he didn't hold any of these positions.

The 61-year-old looks the part. In fact he is a convicted forger and a conman. None of those who lapped up his financial wisdom saw through his fake CV until after he had established himself as an economics guru. By then some of his former cellmates had been duly impressed by his TV performances.

Although comvicted of 10 crimes between 1982 nd 1998 and having been released from jail a year ago, Baptista da Silva now claims he is the victim of a witch-hunt and has reportedly disappeared from public view. A fresh investigation into alleged falsification of documents is now underway and it is thought likely he will face more charges and be returning behind bars.

In a way that’s a pity. The man clearly has talent. It’s sad that he may not have an opportunity to put it to better use.

Salgados: Conflict or compromise?

 Finalgarve, the company behind the highly controversial tourist development planned for the Lagoa dos Salgados and Praia Grande area, is soon to release details of  an ‘environmental park’ it intends to create as part of the overall project.

A spokesman for the company told me that a formal public presentation of the proposed park will be made in Silves library at 11am on 4th February.

This follows the announcement last week by the Secretary of State for the Environment that an official environmental impact study is to be carried out before the huge Finalgarve development east of Armação de Pêra is allowed to proceed. The study, directed by the Agência Portuguesa do Ambiente, is already underway, but it may take several months to complete.

The impact study satisfies one of the demands of groups of environmentalists who have united under the banner ‘Friends of Lagoa dos Salgados.’ On the same day the Secretary of State announced that the study would go ahead, leading figures among the Friends of Salgados delivered to the Environment Minister’s office in Lisbon a petition signed by 20,000 supporters.

Either the impact study or the environmental park plan – or both - could prove to be the catalyst for renewed dialogue and possible compromise between NGO environmental groups and the developers.  

For the time being, Finalgarve and the Friends of Salgados appear to be totally at loggerheads. The Friends want the development stopped, but Finalgarve says it fully intends to pursue the project in partnership with other investors or developers. Crucially maybe, the company affirmed today: "Our project will not interfere with Lagoa dos Salgados nor use any of its water."

The current deadlock is in contrast to the large measure of goodwill that existed several years ago between Finalgarve and the Portuguese and British bird conservation organisations SPEA and the RSPB. They had reached an agreement by early 2008 with various municipal, regional and national bodies to reduce the number of beds in the development, to create a buffer zone between the development and Lagoa dos Salgados, and to conserve the lagoon as a wildlife sanctuary with a sustainable eco-management policy.

Instead of looking after the lagoon, the responsible government bodies have grossly neglected it. Water levels have been allowed to fluctuate wildly from overfull to completely dry, often due to artificial causes; flocks of goats and sheep trample over the habitat of ground-nesting species during the breeding season; marauding shepherd dogs and strays chase hares and birds at will; information signs have been deliberately smashed.

Ironically, the ‘no access’ signs still in place at the edge of the lagoon bear four logo images:  those of SPEA, the RSPB, Birdlife International and Finalgarve.

Renewed concern about the future of the area erupted last June with an announcement from Silves Câmara that Finalgarve’s long-approved plans would involve an investment of more than €232 million to build three hotels, several tourist villages and 18 holes of golf. The 349-hectare development would boost Silves’ coffers by €35 million over ten years and create many jobs.

An online petition was launched, regional and national environmental groups came together on the issue and campaigning newspapers joined in a chorus of opposition.

The newly-formed Friends of Salgados went into battle mode insisting that the Algarve did not need any further tourist developments and that if the Finalgarve project were to go ahead it would “destroy” Salgados. The petition declared that “any development taking place in the area will have a devastating impact on the wildlife.” 

When asked about the environmentalists’ claim that the development will “destroy” the lagoon and that “living space for wildlife will be lost forever,” the Finalgarve spokesman said: “We absolutely disagree with this claim. We are going to develop our project which respects the environment. Furthermore, we believe the project will profit from its environmental potential.”

The spokesman added: “The environmental park will go ahead as planned and it will allow us to preserve the best characteristics of Lagoa dos Salgados as a tourist destination. Being a tourist destination, we want to take advantage of the environmental park - and of the whole treatment of the environment - as a value added proposition of the project.”

There has been no recent dialogue between Finalgarve and environmental groups. Asked if Finalgarve would agree to negotiations, the spokesman said the company would welcome “with an open mind” any talks with any of the interested parties.

Domingos Leitão, a leading figure in both SPEA and the Friends of Lagoa dos Salgados protest movement, said this week: “In the past five years, local and national administration bodies have failed to take any credible action to protect the lagoon. Finalgarve has done little more than nothing. But if we see a window of opportunity, with no preconditions, we would be open for discussions again.”

Rising Chinese influence in Portugal

This year marks the 500th anniversary of the first direct contact between Portugal and China. With Chinese New Year 2013, the year of the snake, just a month away, relations between the two countries have probably never been closer.

In 1513, the Portuguese explorer Jorge Álvares sailed into the southern Chinese port of Guangzhou on the Pearl River about 120 km north of Hong Kong and Macau. He was the first European to reach China. Trading activities were established a few years later, but things soon soured because of outrageous Portuguese behaviour. This included the building of a fort on Chinese soil without permission and the kidnapping of Chinese children for enslavement.

Since then there have been serious ups and downs, but the two nations put differences behind them with the agreement to return the Portuguese colony of Macau to Chinese control in 1999. 

The fact that there are now Chinese shops and restaurants in almost every town throughout Portugal is the most obvious sign of cordiality. Less apparent is that China is now the main foreign investor in Portuguese companies.

China owns a significant stake in the production and distribution of Portugal’s energy. The Bank of China is due to start operating soon in Lisbon. China is also reportedly seeking business interests in a major port.

Last year, China’s State Grid International Development company bought a 25% stake in Portugal’s national electricity grid operator REN for more than €387 million. The year before, China Three Gorges (CTG) bid nearly €2.7 billion to acquire the Portuguese government's 21.35% stake in Energias de Portugal (EDP). The state-owned China Petroleum and Chemical Corp paid €3.6 billion for a 30% stake in a subsidiary of Portugal’s biggest oil company, Lisbon-based Galp Energia, which prospects for oil in Brazil.

Trade between the two countries in the first half of last year totalled €1.8 billion, with Portugal’s exports up almost 60% on the same period in 2011 at €737 million. Container loads of inexpensive Chinese products continue to flood in.

Portuguese decolonisation brought about a certain amount of Chinese immigration in the 70s and 80s, but a far greater number of immigrants have arrived from mainland China, particularly the Shanghai area, in the last few years. Of course, the recent exodus is infinitesimal compared to the number who stay at home. The population of Shanghai alone is well over twice that of the whole of Portugal.

The native tongue of most Chinese in Portugal is not the Cantonese dialect spoken in Macau, Hong Kong and elsewhere in southern China, but the country’s predominent language, Mandarin.  Immigrants undertake intensive courses to become fluent in Portuguese.

Up from official figures of about 4,000 in 2001, the big majority of the 20,000 or so Chinese people presently living in Portugal are younger than 40. These young entrepreneurs and employees are attracted by tax exemptions, job opportunities and the ability to make more money than they could back home. Making money by efficiently providing goods and services is the overwhelming motivation for Chinese expats. Even back in their communist homeland, it is officially no longer bad to be rich.

Perhaps inevitably, the expansion of Chinese businesses in Portugal and elsewhere in southern Europe, at a time when many indigenous businesses are closing down, has caused a certain amount of resentment amid accusations that the Chinese are exploiting not only cheap materials but also cheap labour. 

Most Chinese-owned firms here are family enterprises. Their suppliers are mostly Chinese and Chinese products are readily available to them. Their traditional foodstuffs, for example, can be obtained from a big central outlet in Lisbon, or a subsidiary in Albufeira.

Although they like to live in family units, when looking to expand business interests the Chinese tend to avoid competition by moving in on untapped markets elsewhere in the country. Despite being clannish, the Chinese send their children to Portuguese schools. Chinese community leaders have been reported as saying they would like to see greater integration and more marriages between Chinese and Portuguese.

Meanwhile, it is said that the strategy of the Bank of China in Portugal will initially focus on the Chinese expatriate market and on small and medium-sized companies exporting to China. This will give extra support to the culture of dedicated hard work that is so characteristic of the Chinese here.

We may well see a greater demand for the expensive cars so beloved by the Chinese. If Portugal continues on its economic downward spiral while China closes in on overtaking the US as the richest country in the world, the Chinese may soon be very much in the driving seat in this country in more ways than one.

2013 - A worrying and wobbly start

On New Year’s Day Portugal’s head of state, President Aníbal Cavaco Silva, had second thoughts about the legitimacy of the 2013 budget he had signed into law the day before. Critics claimed that some elements of the budget were unconstitutional. The president decided he had better refer the matter to the country’s highest court.

Cavaco Silva, a former professor of economics and former leader of the centre-right PSD party, expressed concern that while everyone would be affected by the proposed hikes in taxes and cuts in welfare payments, some would be “more penalised than others.”

He also noted that “Portugal’s foreign debt, now twice as high as the country’s annual output, is unsustainable.”

In a television address he added: “Fiscal austerity is leading to declining output and lower tax revenue. We must stop this vicious circle.”

The centre-right government of Prime Minister Pedro Passos Coelho has argued that the highest tax increases in living memory contained in the new budget are necessary to meet the terms of the country’s eurozone bailout. That he was “profoundly isolated” in his pro-austerity stance was one of the least impolite remarks any of Passos Coelho’s domestic political opponents could come up with.

“Portugal is a crisis country that is not as much in the public eye as Greece for instance, but austerity has the same effect on the Iberian Peninsula, especially with big neighbour Spain in crisis too,” commented the Social Europe Journal (SEJ).

“Will the relevant decision-makers ever notice that their strategy is not working economically and is more and more undermining democracy on all levels?,” asked  the SEJ, a forum for debate and innovative political thinking, which addresses issues of critical interest to progressives across Europe.

In the SEJ’s opinion, “the year we have just left behind has clearly demonstrated that in the current European crisis, politics is stretching national democratic orders to breaking point, especially in crisis countries. Unfortunately, this trend looks set to continue in 2013.”

According to the Financial Times: “By approving the budget, but also asking the constitutional court to vet the measures, Mr Cavaco Silva has avoided a direct political confrontation with the government while at the same time taking action that will at least partially appease critics of the austerity measures. However, the decision is expected to increase political tensions between the president and the prime minister.”

The Wall Street Journal said: “If the 2013 budget is deemed unconstitutional, it may complicate the government's efforts to reduce the budget deficit to 4.5% of gross domestic product this year, from an expected 2012 deficit of 5% of GDP, part of the commitments included in a €78 billion bailout agreement with the European Commission, the European Central Bank and the International Monetary Fund.”

The BBC among others pointed out that the proposed tax hikes in the latest budget are equivalent to more than a month’s wages whilst Portugal is entering its third year of recession with an unemployment rate of nearly 16%. Among the country’s youth it is topping 35%.

According to Eurostat, the EU's statistical agency, some of the unemployment levels are the highest ever seen in Europe, with Portugal along with Spain, Greece and Latvia the worse affected.

The latest Gallup poll on the subject found that 89% of adults questioned in Portugal thought this was a “bad time” to find a job.

Wishful thinking maybe, but nonetheless intriguing as we lurch forward into the new year gloom, 7% of Portuguese adults told Gallup they were optimistic about this being a “good time” to find work.

Humbug! It looks like Xmas is still on

 Now that we are approaching the shortest day and the longest night of the year, new light is being shed on old myths.

The much-debated idea that Jesus Christ was merely a mythical character finds new expression in the latest issue of the newspaper Jornal Algarve 123. The paper quotes an Algarve genealogist, Nuno Inácio, speaking about a friend who died just as he was starting to write a book based on 20 years of delving into the origins of Christianity.

“He died when he had proof of what he wanted to prove: that the Biblical Jesus Christ never existed….. Jesus Christ was created by Paul, as part of a family vendetta,” says Inácio.

Those wishing to examine the “proof” will have to read the newly published 706-page book Apokalipsis based on the research of Inácio’s friend Victor Borges (not to be confused with the Danish musical comedian of the same name who had a home in the Algarve for many years).

Meanwhile, Russia’s former president, now prime minister, Dmitry Medvedev this week remarked on two other subjects thought by many to be steeped in mythology. 

The cameras had been switched off after a TV press conference but a microphone was still live when a journalist asked Medvedev if Russia’s president handled secret files about extraterrestrials when receiving the briefcase he needed to activate Russia's nuclear arsenal.  

Medvedev replied: “Along with the briefcase with nuclear codes, the president of the country is given a special top secret folder. This folder in its entirety contains information about aliens who visited our planet.”

Medvedev continued: “Along with this, you are given a report of the absolutely secret special service that exercises control over aliens on the territory of our country ... I will not tell you how many of them are among us because it may cause panic. More detailed information on this topic you can get from a well-known movie called ‘Men in Black’."

With tongue still firmly lodged in his cheek, Medvedev’s also discussed Santa Claus – or Father Frost as Santa is known in Russia. “I believe in Father Frost. But not too deeply,” said Medvedev. Anyway, you know, I'm not one of those people who are able to tell the kids that Father Frost does not exist.”

Film star Brad Pitt apparently is one of those people. The husband of Angelina Jolie and father of six recently revealed that when he was a child he was devastated to discover Santa wasn’t real as he had been led to believe. “I thought it was a huge act of betrayal when I was a kid. I didn't like that. When I found out the truth, I was like, ‘why, why, why would you lie to me, why?’”

According to an astonishing number of people around the globe, Santa will not be making his usual rounds this year. That, of course, is because the world is going to end before Christmas – next Friday to be exact. It says so in the Mayan calendar. Well, actually it doesn’t, but recent polls suggest that no fewer than 25 million Americans believe the end is nigh. Widespread alarm about the approaching ‘apocalypse’ has prompted people to stockpile food, fuel and weapons before going underground. Children across the planet are said to be scared to the point of suicide. Inmates in a Russian women’s prison experienced a “collective mass psychosis” so intense that their wardens had to summon a priest to calm them. Authorities in France are banning a flood of visitors from taking refuge in a supposedly sacred mountain said to contain an alien spaceship. It is believed to be the place that will protect a lucky few from Armageddon. 

Happily, Mayan scholars have pooh-poohed the notion and the large Mayan population in the Mexican state of Yucatán have scheduled a festival next Friday to celebrate the fact that the Mayan calendar does not predict any disaster at all.

The NASA space agency, through leading astrophysicist David Morrison, has described the December 21st doomsday prediction as just another modern hoax. Morrison has dismissed all the chatter about ‘End Times’ caused by a meteor strike, a solar flare or a polar shift as baloney. Despite what creationists believe, most scientists are agreed that the Earth is more than four billion years old and probably has another billion or so to go.

So, that’s that sorted. Phew! Now all we have to worry about is the Christmas shopping and getting into the festive spirit.

Bah! Humbug!

Cheers to those helping save corks!

Getting into the spirit of Christmas, Ireland’s biggest selling newspaper, the Sunday Independent, ran an article in its last issue that will be welcomed by all in the Algarve and the rest of the Iberian Peninsula who side with corks in the War of the Stoppers.

The article was a timely reminder that market forces controlling how wine bottles are capped are still rampant and working against corks. Despite a reported cork resurgence in recent years, screw caps and plastic stoppers favoured by New World wine producers have  captured at least 20% of the market.

The Sunday Independent quoted the World Wildlife Fund in reporting that an estimated three-quarters of the western Mediterranean’s cork oak forests could be lost within 10 years. The plastic and screw top momentum could take up to 80% of the wine bottle market well before that.

While doing what it can to help, the WWF continues to express serious concern about a possible disastrous scenario. “Cork forests – home to endangered species such as the Iberian lynx and Iberian imperial eagle – have been protected and valued due to the centuries-old demand for cork in the wine industry. But the increasingly popular use of alternative stoppers threatens this environmentally and economically sustainable industry and leaves cork forests unprotected.”

Portugal produces about half of the cork harvested annually worldwide. In the past 10 years, cork forests in the Algarve have reportedly declined by 28%. One firm is said to have seen a fall of 70%, with its cork products now being used only for sparkling wine bottles.

The harvesting of cork oak, with the bark totally renewing itself after each nine-year harvest, offers one of the finest examples of traditional, sustainable land use. Cork oak woodlands provide a livelihood for 10,000 people in southern Portugal and many thousands more in southern Spain and parts of France, Italy Algeria, Tunisia and Morocco. It is not only these livelihoods that are in danger if the demand for cork dwindles as feared.

The worry is that market forces may lead to the woodlands being felled to make way for other cash crops. “Cork oak forests also play a key role in maintaining watersheds, preventing erosion and keeping soils healthy, says the World Wildlife Fund. “They are a great example of balanced conservation and economic development. Their preservation is vital for the well-being of the Mediterranean region.”

If they are not preserved, climate change and erosion could bring about desertification. If that happened, the natural undergrowth, wild animals and birds the oak woodlands now support would be displaced or driven to extinction. Livestock, such as black pigs free-ranging on acorns, would no longer have their traditional pastures.

Cork is so crucial ecomonically that the Portuguese government has declared the industry’s  survival “a national cause.” Scientists are hellping the cause with laboratory investigations designed to improve the quality of cork products and by introducing a new European protocol to certify standards. Reuters reported recently that Spain’s cork-producing regions had set scientists the task of ensuring that nature’s stoppers are free from any of that infamous ‘cork taint.’

There are pros as well as cons for the synthetic alternatives, but while the War of the Stoppers rages on, the writer of the Sunday Independent article last weekend urged readers to continue to pop corks by saying: “This simple choice is a small but positive gesture towards those Portuguese and Spanish farmers hanging in there. Raise a glass or two to them. I will join you. (O mesmo por favor!) Fill 'em up again, lads.” 

Leveson condemns press on McCanns

In his report proposing stricter regulation of the British press, Lord Justice Leveson cited what he called “outrageous” newspaper stories about the disappearance of Madeleine McCann while on holiday in the Algarve in 2007.

This comes a year after Kate and Gerry McCann made an impassioned plea for tougher press control when they gave evidence to the Leveson inquiry. In doing so last November, they spoke at length of their treatment by the British tabloids. They said they found some of the stories published about them “disgusting” and “offensive.”

Kate McCann said she felt “totally violated"  when the News of the World published her personal diary in which she recorded very private thoughts about her missing daughter. The diary, which had been seized and copied by the Portuguese police, was leaked to the Murdoch tabloid. The paper showed “absolutely no respect for me as a grieving mother,” she told the inquiry. She said she felt like “climbing into a hole and not coming out.” 

Leveson heard how the Daily Express reported there was DNA evidence to show Madeleine’s body had been stored in the spare tyre well of a hire car. It turned out that this allegation was baseless. An analysis conducted in the UK was “inconclusive.” Express Newspapers paid £550,000 damages to the McCann’s in 2008 for inaccurate reporting by the Daily Express and the publisher’s three other titles.

In a relatively small but striking section of his massive report, Leveson devoted almost 12 pages to the McCann family, noting that some papers were “guilty of gross libels” against them. He mentioned in particular the Daily Star, which ran a headline claiming the “hard up” McCanns had sold their daughter.

Whatever many people in Portugal may think about the behaviour of the McCanns as parents at the time of Madeleine’s disappearance, and regardless of the belief among many in this country that somehow they may have been involved, the fact of the matter is they must be presumed to be innocent. In legal terms, the presumption of innocence is the same in Portugal as it is in Britain.

In addition to the McCanns, many other innocent people were caught up in the press frenzy over Madeleine’s disappearance. The investigating Polícia Judiciária were crudely smeared. Individuals in Praia da Luz and elsewhere in the Algarve were directly accused or indirectly harmed by grossly insensitive, inaccurate or totally fabricated stories.

Whatever tougher regulations emerge from the debate now going on in the UK about what form the regulations should take, it is unlikely - thanks to Leveson - that British newspapers will get away with such crassness in future.

The agony of bringing about stricter regulation of the print press in Britain - self-imposed or with statutory underpinning - is just the tip of the iceberg.

Freedom of expression is a precious ideal, but innocent people continue to be widely abused in the digital world, often in the most vitriolic of terms by ranters hiding behind anonymity or pseudonyms. Facebook and Twitter fantasists and fanatics – or barmy bloggers - can carry on blurting out whatever they like with little fear of punishment.

In suggesting that bloggers might like to join his proposed new regulatory system, Leveson noted that some have called the Internet a “wild west." He preferred to think of it as an “ethical vacuum.”  

Those are not outrageous comments. They are probably understatements. The “vacuum” does not look like being filled any time soon - and the “west” is almost certainly going to get wilder.