In the Algarve and in the country, we have a complex year ahead of us, full of uncertainties, which demands from all active citizens, and from the outset, from entrepreneurs, a realistic attitude and a lot of courage.
One cannot live on illusions or mere hopes. Nor political promises.
The Algarve's current challenges require two lines of action.
One, immediate, is to consistently face and overcome the negative situation we have been experiencing since 2020.
Another, more fundamental, is to point to an effective strategy, and not just on paper, for the future of the region.
2023. Certainties & Uncertainties
The Algarve departs in 2023 with a very positive certainty.
After two years (2020/2021) of a sharp downturn in the economy, specifically in Tourism and in all the sectors that converge in it, in 2022, despite the difficulties, there was a strong recovery that brought the region closer to the values of 2019.
This is an important certainty to retain: the resilience and consistency of the economic structure of Tourism and of the companies and sectors that converge in it. And the courage of the entrepreneurs who believed in their activity.
For 2023, the main certainty that we can point to the region's economy consists of a set of unavoidable uncertainties, on which its evolution depends and, very specifically, Tourism, right away on a European scale.
They are known: in addition to the war in Ukraine, with no end in sight, and its reflection in the economic crisis (energy costs, inflation, interest rates, recession in issuing markets, etc.) that condition the decision of consumers. The weight of these factors can decrease, remain or even increase. There are opinions, not always innocent, defending the different hypotheses. Certainty: uncertainties are there.
Certainty: in either case, there is a need for mobilization and action by companies and entrepreneurs.
Companies with activity directly or indirectly linked to Tourism cannot be mere spectators, nor define their attitude on the basis of occasional information, often opportunistic in the positive or negative sense, which generate illusions or pessimism, but permanently monitor the positions of sources institutional.
Public institutions have a lot of responsibility and cannot release isolated opinions of mere propaganda. They must act regularly, with coherence and responsibility.
This requires, on the part of businessmen, permanent vigilance for the signs of all the economic and political factors that determine the evolution of behavior by potential consumers.
Certainty: entrepreneurs must take advantage of the difficult moments of the current situation to improve their companies' activity, rationalize costs, update the technological structure, invest in training, take advantage of support programs, improve their offer and competitive capacity, with the with the aim of preparing for possible negative conjunctures and the new challenges of competition.
Entrepreneurs must strengthen relations and joint initiative between the different Business Associations in the region and with representative regional institutions.
Strategy. Future of the region
Certainty: the Algarve presents three structural vectors in relation to the future of the region, which should concern us.
Economic development: the Algarve reveals a strong structural imbalance, with a very high weight of the sector directly and indirectly related to Tourism (accommodation, restaurants, real estate, commerce, services, etc.) and an insufficient weight of sectors of industry, agriculture and the sea, which weakens the region's economy as a whole. Always with one certainty: we don't have too much tourism, we have too little other sectors.
Certainty: which requires the need to consolidate a Strategy that, in addition to strengthening the sectors linked to Tourism, aims to diversify the economic structure of the region, taking advantage of endogenous resources and investing in new technologies, in a perspective of sustainable development. Failure to do so not only creates uncertainty about the future of the Region's economy, but also weakens Tourism itself.
Certainty: the need for true regionalization. The Algarve, in order to build a coherent future, needs a regional political instrument to manage the region. Decentralization and municipalization are not enough.
Certainty: the Algarve needs democratically legitimized political leadership, capable of politically asserting the region's weight in the national economy.
Certainty: I am aware of the difficulty of achieving these objectives, first of all due to the various corporatisms of different nature that weigh on the reality of the region.
Certainty: I will not give up fighting for them alongside the Algarve.
Author Vítor Neto is a businessman
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