Paulo Almeida gave up waiting for a job at an employment office in Lisbon, crossing the city to join a longer line for a visa to Angola.
“There are no decent jobs in Portugal anymore, it’s only getting worse,” the 28-year-old engineer said as he stood outside the oil-producing African country’s consulate where job-seekers sometimes camp overnight to be first in line.
It’s not only investors who are abandoning countries at the heart of Europe’s debt crisis. More people are leaving Portugal than at any time since the end of the Estado Novo regime in 1974, while Greeks are heading to Australia and the US and the Irish are migrating in numbers not seen since the late 19th century when they were still part of Britain.
With Portugal predicting its economy will remain mired in recession for the next two years and unemployment at the highest since at least 1983, workers and companies are turning to the former Portuguese colonies of Angola, Mozambique and Brazil.
Fourteen of the 20 members of Lisbon’s benchmark PSI20 stock index are either present or planning to set up operations in at least one of the three faster-growing markets. They include Cimpor-Cimentos de Portugal SGPS SA, Portugal’s biggest cement maker, and Mota-Engil SGPS SA, its largest builder.
“When we lost the colonies, people thought Europe would be the solution,” Antonio Barreto, a historian and former Portuguese education minister, said at a meeting with reporters on September 8. “Now we’re in trouble again and people seem to think that the former colonies are the way out of the crisis.”
Wealth Divide
The gap in per-capita gross domestic product between Portugal and the three countries combined is at its narrowest since 1997, according to estimates based on data published by the World Bank.
Portugal was the third country after Greece and Ireland to be bailed out by the European Union and the International Monetary Fund. The government is freezing salaries for state workers, raising taxes and selling stakes in some of the country’s biggest companies to comply with the terms of the ¤78 billion ($105 billion) aid package.
The difference in yield that investors demand to hold Portugal’s 10-year bonds instead of German bunds reached a euro era record of 10.78 percentage points on July 12 and was at 10.23 points yesterday, double the 5.11 points when former Prime Minister Jose Socrates sought the rescue on April 6.
The 10-year bond yield was at 12.03 per cent yesterday, up from 10.14 per cent at the start of this month amid concern among investors about contagion from a potential Greek default.
Swapping Roles
Angola’s state oil company Sonangol has invested in Portugal and former Brazilian President Luiz Inacio Lula da Silva, on a four-day visit to Portugal beginning on September 5, urged Brazilian companies to invest in its once colonial master.
“A weak economy in Portugal means we need to continue to take advantage of business opportunities in the former colonies and other high-growth markets,” said Francisco Lacerda, chief executive officer of Lisbon-based Cimpor-Cimentos, which derives about 30 per cent of its revenue from Brazil as well as its two biggest shareholders.
Like Greece and Ireland, Portugal, with a resident population of about 10.6 million, has been a country marked by high rates of emigration. About 5.1 million Portuguese or people of Portuguese origin live outside the country, according to the Ministry of Foreign Affairs in Lisbon.
Overseas Empire
Emigration is currently running at about 40,000 citizens per year, in addition to non-nationals who are leaving the country, according to Barreto, who is also chairman of a foundation that owns Pordata, a center in Lisbon for statistics on Portugal and Europe.
The rate was last that high in the 1960s through the mid- 1970s when Portugal sent troops to try to retain its African colonies during the tail end of the authoritarian rule by Antonio de Oliveira Salazar and his successors, he said.
The Portuguese empire spanned six centuries from the capture of Ceuta in northern Africa in 1415 to the handover of Macau to China in 1999.
The number of Portuguese citizens registered in Angola, the biggest oil producer in Africa after Nigeria, rose 64 percent to 91,854 by the end of 2010 from two years earlier, according to the Emigration Observatory in Lisbon. These numbers include people who acquired Portuguese nationality though marriage and Portuguese nationals born abroad.
In Mozambique, that number increased 23 percent to 20,413 last year compared with 2008, while the number of Portuguese registered in Brazil grew 9 percent to 705,615, the data showed.
Angolan Allure
Almeida, a Lisbon resident whose father is already in Angola, took a string of low-paid jobs since graduating five years ago from a university. He was dismissed in January after the construction company he worked for went bankrupt.
Antonio Posser de Andrade, 33, was a general manager of a shipping company in Angola before he gave up his well-paid job and returned to Portugal for the birth of his second child in July. Once in Portugal, he quickly realized there were few “decent jobs” available at local companies.
He turned to a head-hunter who advised him to find an employer doing business in Angola or other faster-growing market. “It looks like my situation will be resolved soon,” Posser de Andrade said by telephone on Sept 23.
Portugal’s economy will contract 2.2 percent this year and 1.8 percent in 2012 before returning to growth in 2013, according to government forecasts. It expanded at an average rate of less than 1 percent a year for the past decade.
World Cup Host
Brazil, which will host soccer’s 2014 World Cup and 2016 summer Olympics, will grow by 3.8 percent in 2011 and 3.6 percent the following year, the IMF predicts.
Angola, which is still rebuilding from a 27-year civil war that followed independence from Portugal in 1975, is expected to expand by 3.7 percent this year and 10.8 percent in 2012, according to the lender’s World Economic Outlook published this month. Growth in Mozambique will probably be 7.25 percent this year and remain at an average 8 percent, the IMF predicts.
Angola accounted for 15 percent of Mota-Engil’s 3.4 billion-euro order book in the first half of 2011, the Porto- based construction company said in a filing on Aug. 31.
“It’s one of our key markets,” CEO Jorge Coelho said.
The business relationship between the former colonial power and one-time colony is also working both ways.
Angolan Stakes
Flush with money from oil exports, state-owned Angolan oil company Sonangol owns 12.4 percent of Banco Comercial, Portugal’s second-biggest publicly traded bank.
Isabel dos Santos, daughter of Angolan President Jose Eduardo dos Santos, owns 9.9 percent of Portugal’s Banco BPI SA and 10 percent of Zon Multimedia SGPS SA, Portugal’s biggest cable television operator.
“With the economy booming, it’s normal that Angolan companies and investors start investing in Portugal and other foreign markets,” Bornito de Sousa, Angola’s minister of territorial administration, said in a Sept. 16 interview.
In August, Centrais Eletricas Brasileiras SA (ELET6), Latin America’s largest publicly traded utility, said it was in talks with the Portuguese government to buy a stake in EDP-Energias de Portugal SA, the country’s biggest energy company.
While the government fosters doing business with the faster-growing former colonies, it’s doesn’t want to lose all its engineers and business managers.
“If nothing is done, we will certainly all have emigrated,” Alvaro Santos Pereira, a former economics professor, said in his book “Portugal in the Hour of Truth” published in April this year. “The government is totally committed for that not to happen.”
In Ireland, emigration rose to the highest since the 19th century in the year through April. Athens-based newspaper Kathimerini said Sept. 15 that Greeks are attracted to countries such as Canada and Australia that have large Greek communities.
Almeida now plans to join his father in Angola, who also works in construction, and has promised to find him a job.
“Once I get settled in Angola, I plan to come back and take care of my mother’s visa so she can join me and my father,” he said. “The whole family will be moving there.”
To contact the reporters on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net
To contact the editors responsible for this story: Angela Cullen at acullen8@bloomberg.net
