Entrepreneurs do not live on illusions or dreams. Every day they are faced with concrete responsibilities, which derive from the economic, financial and social reality of their activity.
In the Algarve, we are familiar with the picture resulting from the impact of the violent tourism crisis on our entire economy.
We have to be aware of the gravity of the moment we live. And that, to face it, we have to know the reality clearly.
We have reason to be concerned. We cannot be surprised!
We must have a correct idea of the process that led to the current situation and the factors that condition its evolution.
Let's see – in a simplified way – some issues that NERA has been referring to:
The causes and nature of the crisis.
We are facing a global economic crisis which, contrary to previous ones, does not have an economic and financial origin.
It was generated by a global pandemic, impossible to be controlled by traditional instruments. This situation is further aggravated by the difficulties of concerted actions, even between countries on the same continent. Look at Europe. Look at the European Union. It was the pandemic that generated the world economic and financial crisis. Which also reached Portugal. And above all the Algarve.
Impact on the Economy. Heavy consequences in all countries.
This crisis, by affecting the mobility of people at national and international level, has profound consequences throughout the world economy and especially in one of its most important sectors - Tourism - which fell by about 75% in 2020 - immediately reaching the main markets – USA, France, Germany, UK, Spain, Italy, etc. And also Portugal, where Tourism has a relevant weight.
The crisis is not under control. Nobody knows when it will be.
It is not dominated because its origins have been underestimated and because countries and international institutions have failed to define a common strategy and coordinated action. Prevailing national political and economic interests. Navigating in sight. Every man for himself.
In a crisis that can never be mastered in a single country.
It is essential to be aware of the uncertainties generated by erratic and opportunistic attitudes, from the outset of European countries. They will continue.
Base factors to overcome the crisis.
A clear and coherent national and international strategy is required. Priority number one, from the outset for Portugal, is that the application of measures to combat the pandemic, be generalized and accelerated within the framework of the necessary strategies: combat, contain and eliminate the outbreaks of Covid-19 in the territories and intensify the vaccination program when populations.
Objective: build global health security.
Obstacles to Strategy Success.
The health situation of residents in Portugal depends in the first place on adequate measures. But it is not enough to have a correct national strategy, as we are facing an enemy that we do not control, much less dominate. There are several factors that we do not master.
We also depend on the effectiveness of health strategies in other countries. From the millions of foreign tourists who visit us, from the trips that the Portuguese make abroad.
The evolution of the pandemic in European countries must be a permanent concern.
Every day we are surprised by changes in restrictive measures by European states: travel bans, exclusion from air corridors, quarantines on entry or exit. Requirement of vaccination or testing.
Or worrying news, such as the AstraZeneca vaccine scandal, the EU-UK vaccine war, the canceled state of emergency announcements a few hours later (Germany), the travel permit announcements (UK) and shortly afterwards denied, the announcement of green passport, already questioned by several countries, etc. In short, daily surprises in both directions that only generate uncertainty about the evolution of the crisis.
Recovery prospects. What should we do?
Given the origin and specificity of the crisis generated by the pandemic, taking into account the tendencies of national and uncoordinated actions between countries, which generate uncertainties, it is very difficult to predict and define consistent strategies in a perspective of recovery. The “optimism” or the “hope” and the “certainties” of governments are not enough.
A certainty: as long as the pandemic is not under control – at least in Europe and, of course, in Portugal – the risks of a continuation of the crisis remain. What affects mobility, travel, tourism.
As NERA has been referring, international tourism institutions starting with the OMT, but also the WTTC, as well as the large international operators, the air transport associations (IATA), major investors in the area of tourism, all point to the perspective of a slow recovery this year, which could be strengthened in 2022 and gain better expression in 2023, 2024…
It is for this perspective that we have to gain awareness and strength.
A sure bet for Portugal.
How should Portugal act in the face of the nature and complexity of the global crisis generated by the pandemic – invisible deadly virus, mobility of people with disabilities, lack of common strategy between countries, unilateral political measures of each country, economic and political interests, uncertainties about what could happen on a trip, etc.?
A first sure bet for Portugal is to prioritize fighting, isolating and eliminating the virus across the country and quickly completing the national vaccination plan to curb its expansion.
With that, we gain in two dimensions. Immediately conquering and guaranteeing a good year in the domestic market.
A good sanitary image, on the other hand, becomes a decisive asset for a faster recovery in the main international markets.
If, in the meantime, the global situation improves, we will be in a good position to take advantage of it.
If we don't win the battle against the virus, we lose in both directions.
It is evident that the foundation of this simple strategy must be the defense and strengthening of our Companies and Employment, which are essential to face these difficult battles.
This is what we must do with realism and serenity. The Algarve is in this battle.
Author Vítor Neto is president of NERA – Business Association of the Algarve Region