BACKGROUND TO OUR PORTUGUESE BASED OPERATIONS
Current economic landscape - 2020
Nobody can deny that the ongoing corona crisis has hit most industries in many countries worldwide, and Portugal and UK are no exceptions. Portugal unlike the UK is a poor country. We need to take into account that tourism is one of Portugal’s biggest contributors to GDP.
The Algarve’s heavy dependency on income from tourism meant that the region is one that was and is being affected the most.
The Algarve population is +-450,000 individuals (including children). Of this number approximately 100,000 are immigrants. British comprises the highest number of English speaking individuals and families residing in the Algarve, followed by Germans and Dutch speaking, all contributing to keeping the local economy afloat especially during the low seasons. Approximately 50% of immigrants from UK, Germany and Netherlands are retired, the balance are either seasonal workers, self-employed and a few are homeless.
As indicated above, the corona crisis created unprecedented negative impacts to various business sectors value chains, with massive losses already incurred, and further losses expected to last at least until the spring of 2021.
Many businesses closed since the beginning of the year; venues and festivals have been suspended until further notice, tours and performances have been cancelled, retail shops closed, etc.
Meaning, that many small and medium size businesses owners, employees, artists, artisans as well as the many self-employed professionals working in a wide range of sectors are facing serious economic hardships.
We also need to be cognisant, that social interaction is critical for the mental well being of individuals, it sparks creativity and innovation, and its result is reflected in sources of income, which for many - has already disappeared or was greatly reduced.
What we are seeing on the ground
We are already seeing first hand the terrible and devastating impacts the corona crisis is having on individuals and families accross the Algarve. We are confronted with: increased levels of poverty, homelessness, hunger and starvation, substance abuse, depression, suicide, child abuse, domestic violence, and fear affecting all communities.
We can add so much more to this section, but what this crises illustrates and has taught us, is the need and importance of dealing with unpredicted structural and economic challenges that can have negative impacts not only in key industry sectors but also on the entire local economic landscape.