The history of the global economic crisis and the practice of the Portuguese State are repeated. And the Region?

For about three and a half years, we listened to the various Institutions and Political Parties that govern and govern the country […]

About three and a half years ago, we heard the various Institutions and Political Parties that govern and govern the country say that the intervention of the “Troika” would be a fundamental moment, of discussion, debate and a change in the way the State intervened in society.

Now, after this period, history repeats itself…whether for the economic crisis or for the crisis of the Portuguese State and its Institutions!

In 1970, a book on the elements of economic theory was launched in France. In this “pocket document for an economist”, three periods are described: the crisis; depression; and the 'reprise'.

1 – The crisis (or the end of euphoria!) is caused by overproduction, followed by market saturation and finally by sales difficulties.

Credit for consumption and production try to mask the nascent overproduction, allowing its consequences to be postponed – but they will be very multiplied in the future.

The antiquated companies, the less modern ones (without innovation), are starting to close. Now it is companies with a large organic composition of capital that determine market prices.

Banks do not accept to grant new credits except at exorbitant rates (invoking very high risk premiums!).

2 – One falls into depression. Thousands of (bankrupt) entrepreneurs close their businesses. We are witnessing a constant depreciation of capital, that is, companies depreciate in terms of assets and profitability prospects.

The interest rate, being low, since economic activity is weak, does not “bite” enough to invest, as the market risk is high.

3 – 'Reprise' (or retake!): if the capitalists of the primary sector (agriculture, fisheries, etc.) were the hardest hit, as “it is still necessary to live”, the accumulated 'stocks' that pass and remain in the secondary sector they will end up draining, little by little, under pressure and influence from the primary sector, and the recovery could take place.

And so, all other sectors will follow, including the 'reprise' in the tertiary sector.

In conclusion, the crisis appears as a necessary phase of the cyclical march of the capitalist economy.

It does not mean the end of the system, but rather the means by which the balance between production and consumption is provisionally re-established to be broken again, etc.

Whether the economic crisis, the Budget, or the detailed discussion of expenditure and/or revenue should be seen as a means or instrument to reach a higher goal.

If we praise the signs of economic recovery, the result of an increase in external demand (increase in exports) and innovation on the part of companies (and well!), why not talk about the expected deficit primary balance in the Public Administration accounts? Which generally means that we do not have the public accounts balanced in a sustainable way (stable public debt, but with no perspective of reduction!).

It's one thing to talk about the country's economic recovery, another is to discuss broadly and without complexes, after all, what we want the State to be and what is its intervention in society.

It is one thing to cyclically resolve economic crises, another is to discuss with common sense, in a decentralized manner and with all the “actors” in society, the role of the State.

In other words, the discussion cannot (and should) not be around the economic crisis (which is itself a result of the capitalist regime we have adopted), but centered on how the State's power should be exercised, whether at the level of function or it at the spatial level (autonomies, regions, municipalities).

The economic crisis is a constant coming and going every 15 years, but the country is not! The structure and pillars that support it must be strong, consistent and secure.

As an economist, Portuguese and, with great pride, Algarve, this lack of discussion and debate fundamentally affects those farthest from the central power of the State.

Regional Institutions tend to disappear, the role of regional leaders tends to be that of minimal services (which should and will be the target of further discussion in the future) and, consequently, the creation of regional development models tends not to be encouraged.

This facilitated regional life tends to debilitate morally (in the medium/long term) the Algarve.

In this sense, the “continuous shrinkage” of the Central Public Administration must be replaced by a “continuous interregional relationship” carried out in strict permanent dialogue with the living forces of the Region.

The Country is the sum of all parts! And shouldn't the 445.265 Algarvians (data from 2012 PORDATA – NUTS II) be called up for discussion as a whole?

 

Author Pedro Pimpão
Effective Member of the Order of Economists
Coordinating Member of the Installation Committee of the Algarve Delegation of the Economists Association
PhD student in Management at ISEG/UL, in collaboration with Grupo Pestana

 

Note: Article published under the protocol between the Sul Informação and the Algarve Delegation of the Order of Economists

 

 

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