Irish Government to cut expenditures

With a probable 12% deficit (and after several years of strong economical growth and governmental budgets surpluses) the Irish Government is set to huge central expenditures cuts, reestructuring the public administration, reducing army effectives and taking a hard stance on social benefits control. A measure many European Governments with less severe deficits but a consistent history of them should probably take.

http://economia.publico.clix.pt/noticia.aspx?id=1389120&idCanal=57

My own highway

I just traveled on a highway where I had (many times) the impression that mine was the only car on it. Which highway was this? The A8 and its extension to Aveiro (and then Oporto). With such a route being so scarsely traveled, the question is why is the Portuguese government planning to spend hundreds of millions of dollars on a third highway between Lisbon and Oporto. In a 'resources famine' situation like Portugal is now enduring, this seems to be an avoidable and highly questionable investment, that is not demand driven (remember A8 is almost 'desert')...

The MBA and the Fisherman

This is a parable I have crossed with in the last few days. It is widely know, and by no way, am I the writer of it...

"A Harvard MBA was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The MBA complimented the fisherman on the quality of his fish and asked how long it took to catch them.

The fisherman replied “only a little while”.

The MBA then asked why didn’t he stay out longer and catch more fish.

The fisherman said he had enough to support his family’s needs.

The MBA then asked, “but what do you do with the rest of your time?”
The fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, stroll into the village each evening where I sip wine and play guitar with my friends – I have a full and busy life.”

The MBA scoffed, “I am a Harvard MBA and could help you! You should start by fishing longer everyday. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat. With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution.

“You would need to leave this small coastal fishing village and move to Mexico City, then LA and

eventually NYC where you will run your expanding enterprise.”

The fisherman asked, “But, how long will this all take?”

To which the MBA replied, “15-20 years.”

“But what then?”

The American laughed and said that’s the best part. “When the time is right you would announce an IPO and sell your company stock to the public and become very rich – you would make millions.”

“Millions.. Then what?”

The MBA said, “Then you could retire – maybe move to a small coastal village, sleep late, do a little fishing, play with your grandkids, siesta in the afternoon, stroll into the village in the evenings…”

Don't lose track...

Surprise!!

According to the Portuguese Competition Autorithy, EDP (the electrical monopolist company in Portugal) practices unfairly high prices in the energy market due to lack of competition...

A keen eye of the EU Commission

The Comission announced today that it issued formal "Excessive Deficit Procedures" against a number of EU countries that overpassed the 3% limit (namely Spain, France and Ireland). This may be understood as a signal that the Commission will keep a keen eye on this issue, despite the deflactionary pressures and the mounting crisis. Still, some caution should be used on this procedures - after all, some public investment might be benefic to counterattack this crisis.

http://economia.publico.clix.pt/noticia.aspx?id=1377008&idCanal=57

Bad perspectives

An estimated 4.1% decline in the GDP, unemployment rate soaring to 11% in 2 years, low productivity, weak political leadership, a system plagued by corruption, slow and ineffective justice, low educational levels, low social commitment...

It seems Portugal is having a bad time. Let's see if it this is the low point, and work to ensure we can start climbing the mountain from the 'place' we are standing in.

http://economia.publico.clix.pt/noticia.aspx?id=1375905&idCanal=57

Microcredit in Portugal

Microcredit is a relatively new word, first used in the seventies to name a specific type of loan, of a relatively low amount, given to poor people, so they could gain some economical independence. It was initially designed to provide access to credit to people who were so poor they wouldn’t be eligible to any in the traditional banking system. Microcredit started in Bangladesh, through Muhammad Yunus and his Graemeen Bank, and since then (and supported on the positive impact it had on millions of Bengali households), it has spread over the entire World as a viable way to have a positive impact in the poor population, giving them credit to put their best efforts and creativity in action to run away from poverty claws – and all of this under an economical Liberal method!

As all new successful theories, some Portuguese banks have started their microcredit programs, crediting themselves as an adaptation to our country reality of Graemeen’s methods. The problem is, I must say, I am not sure if those programs were really designed to give a chance to Portuguese poor people or are just a good publicity stunt for the banks involved.

Of course microcredit in Portugal has been able to change lives. It provides the means (usually a €5000 limited credit) to people with good ideas and will to push it forward and make a new business that will get them out of poverty and into financial independence! And that is something absolutely amazing! My only question is why was it only conceded to 1100 persons since it started in 1999 in Portugal…

If we want it to work, we need to get it near ordinary people, make it simpler. That was one of the secrets of Graemeen’s success, and one of the most important things the Portuguese microcredit process was unable to capture…