How to Vitalize Portugal Interior’s Economy
Nearly 8,000 people have moved to Portugal’s interior with the assistance of two government programs. However, a migration expert says that the numbers are not enough.
Compared with 2011, the country recorded a population decrease from 10.6 million to 10.3 million, reported Expresso (December 16, 2021). It was the first time since 1970 that there was a drop in population despite an increase in immigrants.
The population increased only in the Algarve and the Lisbon Metropolitan Area, reported SIC Noticias (December 16, 2021). It decreased in all other regions, according to the 2021 Census.
A total of 4,728, mostly young people and those in their households, have benefitted from Mobilidade Apoiada para um Interior Sustentavel (Supported Mobility Program for a Sustainable Interior), which began in July 2020. This measure provides initial support of up to £4,827, according to the Portuguese government.
“There are some councils in the interior of the country which do not even have this population,” Ana Mendes Godinho, Minister of Labor and Social Security, told Expresso (July 21).
In addition to the new residents from the Supported Mobility Program, another 2,876 have benefitted from the Regressar program, which facilitates the return of emigrants, reported Expresso (July 21). The government has added a 25 percent increase for those who settle in the interior for work, according to the government. Regressar, the Measure to Support the Return of Emigrants, allocates initial support of €3,291, compared with the €2,633 allocated to those who settle elsewhere in the country.
The two programs supported 7,604 people move to the interior.
Ineffective, Symbolic Programs
However, the numbers do not persuade Pedro Gois, sociology researcher at the University of Coimbra, of the programs’ success in stemming depopulation. He told Expresso (July 21):
“They are symbolic programs that are not very effective. Attracting 7,500 inhabitants to the interior in three years is insignificant. It is not with gains like this, and with these plans, that the population will change. Symbolically, these programs show that the State has not abandoned these territories and has some kind of benefits to support change, but that’s about it.”
Gois said that the interior must retain its present population, attract new people and recover those who left in the past decades.
“Probably, the people who left the interior for the coast or abroad in recent years were more than the 7,500 who moved there in the same period. The truth is that we are not managing to retain the population, namely young people who come to the coast to study and then do not return.”
Pedro Gois stressed the need for immigrants. However, he said that there must be “an active selection policy to attract more skilled labor, not necessarily highly qualified but professionally qualified for the available jobs”.
“An interesting fact is that many immigrants are arriving in these regions either because of jobs that no one here wants to do, such as cleaning forests, or because they realized that housing is much cheaper in the interior, and they manage to have a better life than in the big cities. We have to be able to hold them.”
Building Economy, Society in Parallel
Pedro Gois, the sociologist, discussed a measure to help stop depopulation, reported Expresso (July 21):
“The first is not to let the economy disappear but, in many of these territories, it is dying out, little by little. We removed many public services from there and, therefore, companies do not settle there. And if there are no companies, people won’t be attracted. Young people leave because they look to the future and realize that there is nothing to hold them back.
“Therefore, the great solution is to build the economy and build society in parallel. The best example is Fundao, which managed not only to stop the loss of population, but also to gain immigrants. It did so with a plan for economic development, the establishment of new companies and communication that allowed for the creation of a movement in which it seems interesting to live in that space. This was not done in most municipalities in the interior.”
About 10 years ago, the City of Fundao, in Fundao Municipality, Castelo Branco District, undertook a campaign to attract multinational firms in information technology and computer programming. Altran, Logicalis and Readiness IT, are located there, reported Expresso (August 5, 2018). Last year, there were a thousand computer engineers in Fundao, which made it the city in the interior with the most computer engineers per capita of Portuguese and about 106 other nationalities, according to Jornal de Negocios (April 19, 2022).
Eventually, Fundao’s successful economic development campaign led to a housing shortage, according to Expresso (August 5, 2018). In response, the Municipality of Fundao loosened the rigidity of the urban property market by granting tax and other benefits to house owners, especially in the historic city center, who put their property on the market. Second, the municipality created a “house exchange” program. Third, the local government repurposed a set of underutilized public buildings into housing for workers. And fourth, the city experienced the activity of cranes, scaffolding and concrete mixers as new housing was built with municipality permit approval.
“I cannot say that we are reversing the trend of demographic decline that we have been suffering for decades but, at least, we have stabilized,” Fundao Municipality President Paulo Fernandes told Expresso (August 5, 2018).
Last year, the foreign population in Portugal reached its highest ever figure. Is there room for more immigrants?
Pedro Gois, the University of Coimbra sociologist, said:
“I keep hearing people responsible for tourism or civil construction say that they have a shortage of workers, so there is still room for more people to come. In fact, either more people arrive, or the economy starts to decline because it can no longer function fully.”
The Supported Mobility Program for a Sustainable Interior provides direct financial support for those moving to the interior of €2,633 plus a 20 percent increase for each member of the household, up to a limit of €1,316, according to the Portuguese government (December 9, 2021). There is also support for moving expenses, up to a limit of €878.
Unemployed workers or employees looking for a new job are eligible for the program. Beneficiaries must have a full-time contract, with a minimum duration of more than one year, or they can apply by creating their own job.
In March, the Supported Mobility Program for a Sustainable Interior expanded to include professional activity in which there is a transfer to a low-population area; digital nomads; scholarship holders, and members of statutory bodies of companies.
The Supported Mobility Program and Regressar, or the Measure to Support the Return of Emigrants to Portugal, are administered by the Instituto de Emprego e Formaçao Profissional (IEEP) and resulted in 7,604 new residents of the interior. There are 2,521 applications under review, covering a total of 4,608 people, according to Expresso (July 21).
According to the Instituto de Emprego, 73.2 percent of approved candidates are employees; 23.2 percent are self-employed, and 3.5 percent are company founders. A total of 54 percent of recipients have higher education, and 54.7 percent are 35 or younger, reported Expresso (July 21).
The largest percentage of the new residents are from Lisbon District (32.5 percent). Some other places of origin are Porto (17.2 percent); Setubal (7.4 percent); Braga (5.9 percent); Aveiro (5.3 percent), and Coimbra (4.7 percent).
The main destinations are the districts of Castelo Branco (25.4 percent); Evora (13.7 percent); Portalegre (7.6 percent); Guarda (7.3 percent), and Vila Real (7.1 percent).
Sustainable Employment Commitment, another government program, assigns 25 percent financial support to each job located in low-density areas, according to Expresso (July 21).
With companies looking for talent and generating skilled jobs, wages are going up. IEFP (Instituto de Emprego e Formaçao Profissional) data show that in the districts of Bragança, Guarda and Viseu, the average salary now exceeds €1,100 when, in 2015, it was around €800.
Minister of Labor and Social Security, Ana Mendes Godinho, told Expresso (July 21):
“There are districts in the interior where not only is employment rising, but wages are growing above the national average. In Guarda and Viseu, the average salary increase from 2015 to 2023 was over 37 percent.”
The national average gross monthly salary in 2022 increased 3.6 percent, compared with the previous year, to €1,411, according to the Instituto Nacional de Estatistica (February 9).