Just wanted to say, Great article there. Perhaps a bit depressing, but since unlike my compatriots Antonio and Jorge I actually live in the hell-hole, not really surprising.

As for prospects of improvement, forget about it. The likes of Manuel de Oliveira are very rare. The Portuguese these days are satisfied with sitting on their arses, complaining about the governments* who they think should be solving everything for them, only bothering to be active when defending the status-quo of their respective Corporation.

“Improving productivity” here is a swear word for “Making the Boss Richer” and, just like you’d expect from a Nation of small-minded folk, screwing the boss/company/state is most of the populace’s greatest ambition in life.

What’s probably worse, since wages have not increased (much) since ~2000 people are now expecting – nay, demanding – that the government increases them, because they “have the right to it”, irregardless of… well anything really.

The Government, being after all of the “Socialist Party”, are under heavy reassure from the Left in the 3 (three!) elections of 2009, so it might just do that. It’s also turning back on it’s meagre attempts at reform.

(*) Truth be told, they HAVE something to complain about. How big of a git Barroso is you probably already know, but wiki “Pedro Santana Lopes” to know the absolute disaster of a comic-book PM he left behind and you’ll have a lot explained.

Portugal’s real economy is always less visible in economic statistics than are those of more ‘developed’ economies. It’s less easy to fly this economy on instruments (IE statistics) than the developed economies against which Portugal is contrasted.

For example, to those of us who physically go there, one of the most surprising first, and sustained, impressions, is the very high level of activity shown by its old folks. They are very visible as part time road workers, for example. The 90 year old woman working on a roundabout is a signature Portuguese sight.

But also, in this very rural, commodity-based economy, old folks tend to go on tending agricultural plots and driving the ‘social’ economy long after ill health and lack of access to resources has prevented such useful economic supporting activity in more developed countries. Again, this is very visible to those of us who go there.

There is a house transaction crash occurring in Portugal. It has been under way now for approximately two years. It is having price knock-on effects. However, it cannot be instrumented as thoroughly as in developed economies because the Portuguese traditionally eschew debt and vendors are therefore able to hold out in times of poor sales and take lower prices without necessarily harming their personal wealth (the latter because they are not paying the two-times premium that occurs when buying with a mortgage). The house price crash is currently most visible in holiday homes, for reasons I will touch on below.

Over the last year, it has become clear to me that a commercial real estate crash is gathering momentum, though again, low debt levels slow its pace. Presumably low debt levels (relative to real transactions) will ease its impact.

Also, Portugal’s large tourism industry is suffering with the disappearance of the British and decline of other visitors from slowing developed economies. Hence that holiday house price crash I mentioned above.

To commit the dangerous act of summarising, I’d say that Portugal’s financial economy is suffering quite badly but that the country’s low participation in financial economics (be it wages – where the average is E800/pm – or mortgages, insurance or other ‘equity-type assets’) means that their quality of life is relatively unharmed. Touched, but not harmed.

What has harmed them more is the relatively recent imposition of income tax, which has sucked disposable income from a people who – more than most – understood the requirement to save earnings. It is to be hoped that the damage being done by this current financial rout will incentivise the Portuguese to retain their high levels of community-based and social economic activity and not to become so dependent on the asset value-type promises whose volatility is now causing so much damage in the developed world. J

Now, not to get TOO political (just a bit), we had two of the worse governments that could serve any country from 02-05. If you were writing a political economy analysis, instead of a purely economical one, you would add every time you mention that period has “the period of that awful government Portugal had”. It would get boring to repeat that over and over again, definitely a challenge to creative writing.

I know Portugal’s problem is structural, but politics do matter, and you’ll see what I mean in about 5 years when you look back at Portugal.

Cheers, keep up the good work,

Antonio

PS: Special treat, guess who won the election in 02

“Mr Oliveira celebrated his 100th birthday last December, and not his 70th.”

Yes, I know, that was a stupid typo on my part, which I have now corrected. This was the whole point of the intro really, still working at 100 etc. How stupid of me.

“He’s the oldest active director.”

And one of my favourites. There is also a link with the title, since Marcello Mastroianni played Pereira in the film which he “sustains”, while Mastroianni’s last film was in fact Oliveira’s excellent Viagem ao Princípio do Mundo. So there is kind of another hommage worked secretly in there.