Demography is Destiny
Please come home! Portugal wants its émigrés to return
by Vincenzina Santoro | September 09, 2019
Portugese government poster: 'It's time to come back home. Your country will assist your return'
Portugal has had an exceptional experience with emigration and immigration for several hundred years. As skilled mariners they set sail to open up world markets over 500 years ago. Portuguese settled in all continents from Brazil in the Americas all the way to East Timor in Asia including large parts of Africa in between. In particular, until about 50 years ago Portuguese descendants lived in large numbers in Angola and Mozambique.
Since the Carnation Revolution of April 25, 1974 that brought democracy to Portugal and shortly afterwards independence to the Overseas Territories in Africa, the Portuguese who resided in these countries were subsequently expelled to Portugal, a land they had never known that was supposed to be their home country. They were called retornados, or returnees. Although they spoke the language, the resettlement was long and painful. Portugal experienced severe economic setbacks as the new arrivals took time to integrate.
It was not until Portugal joined what is now the European Union in 1985 and began receiving “Cohesion Funds” to encourage economic development that Portugal pulled itself out of an economic morass. In the meantime, the more developed countries of Europe, especially France, received thousands upon thousands of Portuguese immigrants – so much so that in the early 1990s Paris became known as the largest Portuguese city in Europe.
More recently, the global financial and economic crisis that broke out just over a decade ago hit Portugal very hard. As growth faltered and unemployment rose sharply emigration once again took off. This time Portugal was losing its best and the brightest as highly educated young people went abroad in search of work. Today Portugal has one of the largest diasporas of any country, rich or poor. An estimated 20 percent of its population resides abroad according to World Bank calculations. Remittances sent home are of significant sustenance to Portuguese families and to the country’s economic stability. In the first six months of 2019 alone, the Bank of Portugal reported that remittances received amounted to 1.95 billion euros, an increase of 15 percent year-on-year.
After a period of retrenchment and austerity to rein in huge government deficits and a burgeoning government debt, the Portuguese economy has finally recovered. With Portuguese economic growth expanding faster than the Euro Area – at 1.8% year-on-year in the second quarter of 2019 versus 1.1% for the EA – labor shortages have begun to appear, especially in agriculture and manufacturing. The overall unemployment rate, which had doubled to 16.4% in the five years to 2013, has since declined to 6.5% as of July 2019, below the 19-member Euro Area average of 7.5%.
An influx of immigrants from Africa and Eastern Europe has been filling some of the void but not completely. In July the Portuguese government launched a program called Regressar (“To Return”) offering incentives to Portuguese nationals working abroad, especially those with professional, technical and other advanced skills, to return home.
The government has set up a colorful web site that urges Portuguese nationals abroad to come home. The opening reads: “It’s time to come back home. Your country will assist your return.” (É Hora de Voltar a Casa! O Seu País Apoia o Seu Regresso.)
The site spells out a number of incentives the government is willing to offer. To qualify, a Portuguese national working abroad must be able to show that he or she emigrated prior to December 2015. They and their family members, including those born abroad, are eligible to return to Portugal beginning this year and until December 31, 2020.
To enable repatriation a worker must prove that he or she has secured a permanent work contract with a company in Portugal. To facilitate this process, the government has established a dedicated portal with job offerings. There are tax advantages too. Income taxes due would be reduced by 50 percent for a five-year period. For more entrepreneurial Portuguese with new skills and innovative ways of doing business who would like to set up a new operation upon return to Portugal the government will offer financial support including special lines of credit. Some assistance with relocation expenses is available. For the entire program the government has budgeted 10 million euros for this year alone, expecting to attract at least 3,000 returnees.
Interestingly, the government was quite explicit in stating the real reasons for wanting its nationals to return home. There is a need for workers not only to fill jobs and bring in new skills, but also to help fill government coffers with social security contributions to pay for a rapidly aging population. Aided and abetted by past emigration of working age/family producing men and women, Portugal’s population began to decline several years ago. While a few other European countries also are experiencing population shrinkage, Portugal seems to be the first to deal with the problem with the novel program of enticing its people abroad to return home.
Although working and living abroad has personal economic advantages, attachment to one’s homeland always gives rise to nostalgia and a yearning to go back. The Portuguese even have a special word for that: saudade. However, this feeling has to be weighed against the reasons for moving away in the first place: job opportunities for sure, but also higher wages. This will be a challenge for Portugal as average wages and salaries are well below the EU average. Nonetheless, even after a few weeks, diaspora requests have been coming in at a brisk pace. Saudade trumps salaries, at least in some cases.
Vincenzina Santoro is an international economist. She represents the American Family Association of New York at the United Nations.