The Portuguese Embassy will play a strategic role in the economic cooperation mission to be held in Lisbon and Porto from May 10 to 13, together with the Agency for Investment and Foreign Trade of Portugal (AICEP), the Luxembourg Ministry of Economy and the Chamber of Commerce. The objective is to create more bridges between the ecosystems of the two countries.
A delegation of around 85 Luxembourg companies should go there.
Throughout this week, Paperjam will analyze the strengths and economic potential of Portugal. Ambassador to Luxembourg since 2018, António Gamito pleads with conviction for a strengthening of economic cooperation between the two countries, based on existing community ties, to nurture an enlightened entrepreneurial dynamic.
Historically, how were the ties that unite Luxembourg and Portugal woven?
– “Diplomatic ties have been forged over the past 130 years, but interest increased when Grand Duchess Charlotte, daughter of the Infanta of Portugal, became Head of State during the German occupation. She fled Luxembourg for Portugal, then Canada and finally London. Then, during the reign of his son, Grand Duke Jean, Portugal experienced economic and political problems and many people immigrated to Luxembourg, especially in the 1960s. They have found a welcoming country here, and a community has been established and strengthened there. Our relationship is very strong today, and for public opinion, it was built with immigration.
Can we say that the two countries have experienced similar constructions in the face of historical crises?
“Absoutely. Luxembourg began as an agricultural country, before developing in the steel industry, like Portugal until the revolution of April 25, 1974 which established the 3Ds: democracy, decolonization and development. It was during this period that Portugal diversified its economy towards services and tourism. There are similarities, because it is a country which has been able to recover, like Luxembourg, which has chosen to develop finance after the decline of coal and steel.
Democracy led Portugal to choose a new path, which was that of Europe, of which Luxembourg is also one of the founding countries, as a political and economic model. Its development increased with the integration into the EEC in 1986. The two countries share the same values and mutually support each other within the European institutions, the OECD, NATO and also the UN.
You said during the pandemic that the presence of Portuguese in Luxembourg had cemented relations and bilateral aid between the two countries. How is this “cement” translated, in a more general way?
“Portugal has been one of the countries to vaccinate its citizens the most. However, in 2021, a very serious pandemic wave disrupted our hospital systems. It has been observed, in a period of crisis, that the community creates a remarkable solidarity. Luxembourg was one of the countries, along with Germany, which helped us the most to deal with it, by sending doctors, nurses and equipment. In return, with the Minister of Health Paulette Lenert (LSAP), we asked the Portuguese in the south of the country to respect the measures decided by the Luxembourg government and we invited them to be vaccinated in Luxembourg. Portuguese language teachers in the Grand Duchy have also collaborated with the Luxembourg Ministry of Education to provide support for students when face-to-face lessons resume.
The pandemic has affected us, but we have already recovered our growth, at 4.9% last year.
There are around 100,000 Portuguese in Luxembourg, out of the country’s 634,000 inhabitants (around 15%). Besides the cultural aspect, what are the economic bridges that exist today between the two countries?
“The economic fabric is already there, thanks to this community that grew up here. But since 1960, it has changed: the first generations were poorly qualified and worked in civil construction, building, cleaning… Today, the population occupies, as well as others, managerial positions in all fields , including in multinationals. This fabric is therefore qualified and connected, it creates more bridges every day. We could explore Portuguese-speaking markets together with Brazil, Cape Verde, European markets… Portugal is not far away, compared to other countries.
In 2020, with the Covid crisis, Portugal’s GDP fell by 8.4%. Today, key sectors such as tourism and transport are struggling to return to pre-pandemic levels. What can we expect in 2022?
“At the end of 2021, we recovered the GDP of 2019. The pandemic affected us, but we have already recovered our growth, at 4.9% last year. The unemployment rate in December 2021 was only 6%. The measures taken by the EU and the provisions of the government have proven to be effective. For the month of January 2022 alone, we recorded 800,000 tourist overnight stays in Portugal. This is encouraging, but resilience is being held back by inflation, and now the energy crisis. The government, as soon as it takes office, will have to present the state budget according to these aspects.
Especially since the 2008 crisis had already hit Portugal hard…
“Yes, the economic situation must indeed succeed in stabilizing durably. There was the 2008 crisis with the bankruptcy of Lehman Brothers, and certain countries such as Spain, Italy, Greece or Ireland experienced difficulties like Portugal. We overcame this crisis, we passed the Covid, and it is now the Russian-Ukrainian situation that is creating price increases and shortages in energy, food products and raw materials. The sanctions that are imposed on Russia are ricocheting in our two countries. However, Luxembourg has 800,000 inhabitants and Portugal 10 million…
Can the creation of a public investment bank (Banco Português de Fomento) help the country to be more resilient by offering financing solutions for projects related to sustainable infrastructure, research, SMEs, innovation?
“It is very important to promote the application of the funds we receive under the EU recovery and resilience program, and also from the Portuguese national budget. It will be the investment tool in the areas of digital transition, climate change, research and development, innovation… And it will give Portugal the opportunity to continue to consolidate the new clusters that we are developing. .
Portugal cannot look at Luxembourg only as a small geographical country which has a large Portuguese community.
What are they?
“Portugal is not just about tourism and Ronaldo. The country keeps a traditional economy based on agri-food, wine exports, design know-how… But alongside it, it has developed financial services via a fintech cluster and online banking services, a health cluster -pharmaceutical and biotech, cutting-edge research and development institutes (Champalimaud Foundation), particularly in the ophthalmology sector and the fight against cancer. We also have a space strategy up to 2030, tourism is ultra-digitized, and our start-up ecosystems are growing exponentially. There are around 2,000 start-ups and already six Portuguese unicorns, including Farfetch and Feedzai, which have each raised more than one billion euros. Digitization has been the subject of huge investments, in all sectors, particularly in the field of e-government and e-health. We are launching a program to try to bring back the managers and talents that we need in Portugal, who have settled abroad. This is one of the components that will help Portugal to return to economic competition.
Precisely, what are the political, commercial and financial stakes of the Portugal-Luxembourg economic mission which will take place in May?
“Since my arrival in October 2018, I have maintained that there are perceptions to change between the two countries. For this, we can rely on the excellent political relations and the strength of the community to lay the foundations for a new privileged commercial relationship, based on the reality of 2022. But we must go further. Portugal cannot look at Luxembourg only as a small geographical country which has a large Portuguese community. Luxembourg cannot only come on holiday to Portugal, or ignore the new economy that is developing there. The two visions must meet, because the relationship lacks this knowledge of similar economic and entrepreneurial assets. In particular clusters that I mentioned earlier, which have common interests. Luxembourg is the hub of the Greater Region, I remind you very often. It can also, in this, attract Portuguese interests. This mission aims to root strong and dynamic business relationships. We can do much better, and that will go through companies.”