Welcome to the Official page of the Presidency of the Portuguese Republic

I am extraordinarily pleased to take part in this COTEC Forum, dedicated to business competitiveness within a worldwide context, a topic of great relevance for the Portuguese Economy.

The entrepreneurs and managers present here today will find in this event a very opportune and relevant contribution for reflection upon the nature of the changes which, as answers to the challenges of globalization and technological progress, will probably need to be introduced in their organizations.

I welcome our distinguished guests, leaders of internationally quoted companies, and take this opportunity to thank them for their availability to impart their experience and their knowledge. I am pleased to note the very significant number of national companies who showed great interest in participating in this event. I sincerely hope that the sharing of experiences will bring positive and enriching results for us all.

Ladies and Gentlemen,

The global economy faces difficult and demanding challenges, and Portugal is not immune or alien to such challenges.

In the entrepreneurial and academic milieu it is commonly heard that crises hold risks but, at the same time, open up new opportunities. It is this perspective of confidence that I would like to see reflected in this Forum and that it musters the economic agents. This is the main motive for my sponsoring this initiative.

The world economy continues fairly fragile. In spite of the existing signs for a recovery of the global environment, mainly arising from the emerging economies, there is still a set of circumstances that bring about a particular measure of uncertainty in the analysis of the near future.

The turbulence in the European markets for public debt, the weakness of the labour market in the United States and the dependence that the markets and the real economy continue to show in the face of monetary and budgetary stimuli are, to be sure, reasons that lead us to face the future with great care and sense of responsibility.
In spite of these factors, the global economic scenario is certainly different to that of the latter two years. In addition to the perspectives for the gradual recovery of the economies of the more developed countries – specifically the United States, Germany and Japan – many so-called emerging economies have shown an extremely positive performance, providing a clear signal that there are business opportunities which must be closely watched by Portuguese companies.

In addition to China, India and Brazil, where economic growth has reached very significant levels, we have, nearer to us, countries such as Poland and Turkey which are showing very encouraging paths of development. Equally, some of the countries with which we have a deep tradition of economic relationship, such as Angola and Mozambique, and even many North African countries that we consider as friends, have demonstrated a very satisfying performance.

In spite of the uncertainty which still involves the development of the world economy, it is important that we realize that no recession is permanent and that the scenario of economic recovery will not necessarily occur uniformly at a global level. It is for this reason that entrepreneurs must view with redoubled attention a wide selection of countries, markets and business solutions. The opportunities are there. Companies must perceive and exploit these opportunities, capitalizing their specific skills.

Ladies and Gentlemen,

Following the global financial crisis, which started in 2007, and along with the answer provided by the European Central Bank at monetary level, the member countries of the European Union collectively decided the strengthening of their action at budgetary levels. As we are now aware, it is legitimate to arrive at the conclusion that the expansionist measures adopted by the Member States of the European Union contributed to avoid a deeper recession and, above all, to lighten the consequences of the crisis for those citizens who are more unprotected and subject to situations of greater risk.

This effort on the part of public finance however, ended up by generating new challenges. The turbulence in the sovereign debt markets was a reminder that there are limits to the recourse to budgetary tools and to the increase in indebtedness. And it also demonstrated that financial sustainability is a necessary condition, even if insufficient, to ensure a fair economic performance.

The Stability and Growth Pact, an essential tool of the Economic and Monetary Union, was placed in a somewhat secondary stage when, at European level, the budgetary strategy to combat the crisis was being established. It can now be said that the States were unable to anticipate the reactions of the markets, which may be explainable by the seriousness of the economic situation then faced by the European Union. It is however time to remember the underlying logic of the Stability Pact: guarantee the discipline and solidity of public finance and ensure the credibility of the European Monetary Union and of the economic policies of its Member States.

The current crisis demonstrates the relevance of credibility. An attribute which takes years to establish, but can be placed at issue due just to a quick succession of errors.

I am confident, however, that Europe and the community authorities have available the required tools and leaders who will be able to bring the European Union back to the path of success of the last 50 years.

It is in this context that we must interpret the need for policies of financial stability and management of the economic cycle, understanding, however, that this does not deplete the role of economic policy. Medium term policies, comprising competitiveness and economic growth potential, must occupy a central area in Europe’s concerns. The 2020 strategy illustrates and is a part of this concern.

In this sphere, the balance that must be reached includes a greater and more efficient coordination of economic policies at European level. Shocks on all Europe demand a coordinated and more comprehensive answer, whether at budgetary level or in the connection between the joint budgetary policy of the Member States and the European monetary policy. Further, for this coordination to become effective it is essential to value the role of the long term structural policies, destined to increase productivity and the growth potential of the economies.

It is not surprising that this is, currently, a relevant topic of debate within the community, and even between investors and academicians. At issue is the consistency of the economic policies of the Member States amongst themselves and also its consistency with the single monetary policy. The Treaties have long stipulated that the economic policy of the Member States is an issue of common interest. There is however a need to avoid direct interference in the design of the specific aspects of the economic and structural policies of each country which could place their sovereignty in question.

Ladies and Gentlemen,

As you will understand, I am especially motivated and concerned with the consequences for Portugal of the current situation in the world and in Europe. .

The first aspect which I would like to stress is that the issues we are facing do not hinder but rather impel us to take advantage of the existing global opportunities.

The second aspect to remember is that the crisis will inevitably give way to a new reformist impetus in Europe, destined to stimulate productivity, innovation and competitiveness. Portugal must take an active part in this move, in order to increase the growth potential of its economy and the full and efficient use of the diverse resources, particularly the labour factor.

The gains in labour productivity depend essentially from the companies’ capacity to take advantage, muster and organize their human resources efficiently, specifically directing their activity and their efforts towards the production of saleable goods and services with high added values.

A third idea, possibly less understood by some until a few months ago, is that the limits of intervention of budgetary policy require the adoption of a new generation of public policies, less centred on public expenditure and turned farther towards the promotion of productivity and external competitiveness. In this context, I believe it is especially important to understand that there is no benefit, not even in the short term, to continue searching in the State for the security that companies probably cannot find in their markets.

Managers and entrepreneurs must, as such, assess up to what point the new reality in which we will move conditions the effectiveness and determines the future of their entrepreneurial strategies. Ascribing such reflections in companies’ strategic planning will be a crucial step for the change and modernization of the Portuguese economic structure.

Entrepreneurs and Managers,

Since the beginning of my mandate I have given special attention to the issues related to the competitiveness of the Portuguese economy in the global context. With this in mind I promoted the Council for Globalization, also organized by COTEC, destined to stimulate discussion over the opportunities for the national economy deriving from the global integration of the markets.

I have tried to encourage Portuguese companies and their leaders towards a strategic reflection over the challenges placed by the international competitive scenario, in the context of the integration process of the world economy and, more recently, that of the recovery from the crisis on a planetary scale.

We are however aware that the number of Portuguese companies which are effectively relevantly sized exporters are still in a minority, and that the markets where our products and services have an expressive presence are still few. In order to counteract this risky concentration in a limited number of business destinations, it is imperative that a greater number of companies start exporting to a larger number of markets.

It is especially important that an exporting dispersal relevantly covers the emerging economies. That would allow reaping the benefits from the high rates of growth of those countries, thus permitting an easier restructuring of the Portuguese export fabric, in the face of an already relatively consolidated European market.

Portuguese companies are faced with a domestic market with a small growth potential and in an extremely intense competitive environment. Its opening to the outside world is more than an option, it is a path that cannot be postponed in order that the national economy recovers a trajectory of sustained growth.

Despite all the efforts made in the increased intensity of investment in research, development and innovation, our weaknesses may only be reduced if this investment is effectively changed for the improvement of the competitive capacity of our companies as compared to foreign production. This is the true measure of economic competitiveness and the mirror of the efficiency of investments in innovation, whether public or private.

For many companies, international success will depend from two crucial factors. On the one hand the adoption of a veritable culture of innovation within their production facilities, as the primary path for short and long term competitiveness. On the other hand, the rejection of cronyism and tax evasion, exchange of favours, and State dependency, which relegate competitiveness to a secondary place in companies’ strategic priorities.

The main objective of our economy must be to encourage and push more companies into competing in the global stage. Never as today has the need to «Think Globally and Act Globally» been so necessary to impose upon the strategic attitude of Portuguese companies, as well as upon the reference frameworks of our politicians, investors, social partners and Public Administration.

The success in external markets has never been the result of chance, but that from human ingenuity and creativity. It is the result of continuous work and of medium term investment and training with the inevitable random errors. It demands a leadership which is inspiring and confident, where the example from above is the predominating rule.

The new global Portuguese companies represent a reasonable hope that the change in culture and in the values of which the Country is so needful is possible. Ambition, excellence and merit must be included in our heritage of values, since these are so essential to the development and to the improvement in the quality of the lives of the Portuguese.

Above all, success will depend upon us and upon our companies. I am fully confident in the Portuguese and in your capabilities. I know that you will be equal to this challenge and this responsibility. I incite Portuguese entrepreneurs to seize the opportunities with drive, ethics, professionalism and the cult of innovation.

Thank you very much.