Sad reality facing Porto

[Roy Hersh]

We all see this when visiting Porto, but few stop to take pause and think about this side of things. On a visit this past summer, a local friend took me on a walk through parts of Gaia that tourists never get to. We eventually wound up at an old and abandoned church with a remarkable view of the bridge and she told me that it was actually inhabited by two men who were squatting inside. I inquired how she knew this and she said, "you'll see in a minute" and then we walked up to the front door and she knocked." A man finally spoke up in Portuguese and she replied and then the huge centuries old wooden door was unlatched and opened. The scruffy man talked to my friend for a moment and she turned to me and said, "come on ... it is alright."

There were no lights inside the chapel but as it was mid-day, the vestiges of this old church were still all intact, even though most of half the roof was gone, and light poured in. We walked towards an old metal spiral staircase and my friend started heading up the 3 story "ladder" and I followed, with the guy just watching us, but clearly he knew and trusted my friend. We exited onto the roof, where there was a bell tower and tiny parapit where we could stand and had this incredible view of Porto, Gaia and especially the bridge. Photo op, but also thoughts about how many people are living like this throughout Porto and Gaia prevailed. I have never had an experience like that, walking into an abandoned building that provided shelter for the homeless, but it certainly opened my eyes to the dynamic portrayed in this article about Porto:

http://www.bbc.co.uk/news/business-24915845

On the other hand, in 2012 ... exports from Portugal reached record levels and in 2013, it appears that things continue to increase above 2012 levels. From what I can tell, the exports to China of staple items such as rice, milk, and shoes continues to drive the export market. Hopefully this will reach into other sectors of the economy as well.

Opinions welcome ...

[Miguel Simoes]

Long discussion... might turn out to be quite the can of worms you opened here.

Things are tough out there, many of my college friends are working abroad (I graduated in 2003). No one expected that to be the case 10 years ago...

Until the late 80s the country was able to compete based on low labor costs and on a constantly depreciating currency (in absence of other competitive advantages). The culture isnt one that rewards risk and the population expects the state to look after its citizens and provide for their basic needs.

The ability to depreciate the currency is gone now that we're in the Euro and competitive advantages other than low labor costs take time to develop. The incentive to develop them was also low while the economy was growing in the 90s and early 2000s. Portugal had access to cheap credit - there were plenty of lenders happy to hand it to us for close to nothing - for the first time in modern history and the country went to town on it... lots of great infrastructure was built, lots of it was wasted on pet projects, and other simply made room in the budgets for large increases in social programs.

Our exports have been growing strongly in recent years. Tourism has been great. Other than that, there is talk of some industries doing v well, like cork products, pulp and paper, shoe manufacturing (of the pricey shoe kind) and specialty products (e.g., wines, preserves, olive oil, ...).

You can see on http://www.ine.pt/xportal/xmain?xpid=IN ... i=95375833 that Portugal's trade balance was close to flat in 2012 for the first time in over 15 years. Sadly a good deal of was also accomplish by lower and lower imports, a reflection of the drop in people's living standards...

Things are tough no doubt. State workers and pensioner salaries are down somewhere in the range of 20-30%, for example...

Lets hope exports keep going up. That's the only way out for the country, for otherwise it would have to continue growing in indebtedness... and we have plenty of debt to pay back already!

[Alan McDonald]

Portugal is a poor country in terms of modern day definitions. The opening of the BBC article suggests that the women doing their washing in the fountain either had not paid their electricity bills or could not afford to repair a washing machine. Did anybody ask them? Every city and town, and many villages, in every country in the world have their homeless.

Washing in fountains and rivers is common. My immediate neighbour across the river does all her laundry that way. That is the way she chooses to do it, and has done it that way all her life. I know their last electricity bill is paid - I happened to be in the Post Office when he paid it. I do not know whether they have mains water in the house. Huge numbers of Portuguese houses do not. I am sure they have very little income, but their land is the most productive I have ever seen in my life, providing I am sure a great deal of their food requirements. They recently gave me 5 litres of their wine in exchange for the use of a buck. I am obliged to accept something - that is the culture. The lady and her husband are well through their 70s, I forget how old, but he told me once and he is a fair bit older than me. They are helped by their daughter and son in law (who live in the city) on a regular basis and the daughter occasionally does the washing instead of her mother. They use donkey power a great deal, but also have a new, about 3 years ago, compact tractor. I do a lot of hand work myself, including splitting olive stumps with a big hammer and steel wedges in preference to a chainsaw. I have two of those, but prefer the old-fashioned way. What you see is not always what it appears to be.

There is no doubt that cutbacks have been made, including as usual the easy target - public servants. More cuts to their salaries are on the way, but whilst typing it came on the TV news that 20% of them will not suffer cuts because their salaries are already too low to give them a reasonable standard of living. The minimum monthly wage is €475, about $US640. That is per month, not week. The cost of living is still very low though. I keep a record of all our supermarket and other shops' expenditure on food and drink. It has increased by an average of €10 a week in the last five years, and that includes all wine that I put into the cellar, which has seen a steady increase during that time. Basic foodstuffs are still very cheap. We live extremely well here, and left Scotland because we could not afford to live there without continuing our previous business which was becoming too work intensive. Our cost of living now is less than Scotland in 2002.

[Roy Hersh]

There is no doubt that the standard of living in Portugal is not good. That being said, although plenty of saudade to go around for everyone living there, most people seems genuinely happy. I know they are not fond of government intervention and especially the ill considered austerity measures (epic fail) but when you have the younger generation unable to find work, that is a huge issue in Portugal. I know several extremely bright young men and women with advanced degrees that are working for 500-700 euros per month. That is just crazy, as here in the USA, a college student working at McDonald's can make considerably more than that.