Portugal witnessed until March 2020, for the first time since the advent of the Euro, a growth trajectory above the European average marked by a sharp increase in exports, as a result of public and business policies anchored in quality, differentiation, design, productive flexibility and incorporation of technology in the production and marketing processes. A new positioning achieved during the last decades and which enabled Portugal to win market share in international markets. It is worth highlighting, however that the path followed by the export sector is the result of policies put in place to attract foreign investment. It is, to a large extent, the result of attracting FDI.
The fact that Portugal is now under the radar of international investors, shedding some light on our comparative advantages comes after the ongoing work by public and private actors and the promotion of a virtuous cycle and, as a result of this, foreign capital (and not only) now looks at Portugal as an investment base that is there to meet the regional or interregional demand, within a framework of integration of activities carried out Portugal in the global value chains. This is the path followed so far; this is, to a large extent, a consensual political option shared by most of our parties (and members of parliament).
In a nutshell, we should highlight the figures resulting from the investment agreements signed in 2019 (by AICEP), the year when we broke once again records, e.g. € 1,172 million, which, taken together and at cruise speed, should lead to the creation of 7,245 jobs.
We are collecting more FDI with less risk, diversifying the geographies of capital inflow as well as the type of investment (industry and services).
In 2020, despite this pandemic, Portugal was able to keep collecting foreign investment. And to prove this point 24 new foreign capital projects have chosen Portugal to settle in since January, from 12 different geographies, approximately more than € 415 million in investment, with the creation of more than 1,950 jobs. Currently 74 further projects are being monitored, at different stages of the decision-making process, from 23 countries in 4 continents, which together are estimated to create over 10,500 jobs. We remain on the radar even for those – and this is important – that are already looking beyond the pandemic.
The work carried out during the year 2020 – after which Portugal was considered the second best European ‘Country Brand’ – was there to reinforce the central elements of the strategy that we have been pursuing, and which led, as we know, to being chosen by economic operators from all continents in the recent past, totalling a stock of FDI that reached around 70% of GDP in 2019 and an export record value of € 93.5 billion (43.9% of GDP).
Today, looking at the near future, the strategy to attract FDI has two core elements: a first, short term, focused on communicating openness and resilience in the face of the pandemic and, to a large extent, focused on showing that the comparative advantages of the territory and our companies remain intact; and, second, that the decisions we make help Portugal becoming an attractive destination, reinforcing the value chains that serve the European Union markets.
The list of things that led to this success – talent, the safety of people and assets, the location of interregional connection (between continents), in addition to the physical and immaterial resources of our territory that enable us to competitively develop different businesses – remains an advantage in the preparation for recovery; and, the political option of supporting the digital and energy transitions, within a framework of reinforcing Europe’s strategic autonomy (and resilience), leads to a new context where we will be able to dispute investment.
Understanding this context, the strategy of attracting investment for the next decade, within the framework of the “Program Internationalise 2030” of the 22nd Constitutional Government, required a deeper analysis of the role that economic activities developed in our territory can/must play when it comes to redesigning the global supply chains in its (possible) regionalization and how the global dispute for resources and talent may enable us to build the best conditions in order to create wealth, generating job (life) opportunities for the Portuguese. We should focus precisely here in order to keep growing not only FDI but also national exports.
In 2021 we are faced with a double challenge – and one that will greatly influence the results of the economic recovery: fighting the pandemic and prioritising the vaccination process, as a precondition for a more robust economic recovery; and, to launch the instruments of the European “bazooka”, which will open up new opportunities, within a framework of review of the European Union’s industrial, commercial and competition policies. The attraction of FDI should occur under this particular context, in a country where capital is scarce but a core element for the sustainable recovery of Portuguese economy.