NEW YORK, 27 SEPTEMBER 2002
STATEMENT BY HE Mr. DURÃO BARROSO, PRIME MINISTER OF THE PORTUGUESE REPUBLIC, TO THE NEW YORK STOCK EXCHANGE
Ten Reasons to be in
It is with great pleasure that I find myself among you today. I am delighted to take this opportunity to share some thoughts with you on why I believe
and the Portuguese economy is the place to be. Portugal
It was Neil Armstrong who said when landing on the Moon - “That’s one small step for a man, one giant leap for mankind”. Armstrong admired the leading role of the Portuguese navigators in the Age of the Discoveries and I believe that if you take the small step of investing in
, you too will be making giant leaps for your companies. Portugal
You may remember that I was in
earlier this month, at the invitation of President Bush, for a bilateral visit. Afterwards, I came to Washington to pay tribute and remember the tragedy of September 11th and to highlight the close relationship New York has with the Portugal . We see clearly who our friends are in the international arena. I believe that, particularly in moments of crisis, allies must show that they are just that: allies. United States
I made a point of coming to you, to the financial capital of the world. I came to draw your attention to the business opportunities in
that await companies and investors. Portugal is particularly well placed to attract the attention of the international business community. Let me tell you why. Here are some key reasons to invest in Portugal : Portugal
First, we are a business-friendly environment
is a stable democracy. Its government offers reliable and predictable policies and a solid, institutional environment that business trusts. I have lived and traveled extensively abroad and I can assure you that the business environment in Portugal is above all open and very user-friendly. Its people and government understand that an open economy to outside investors is the right way to growth and prosperity, raising our standards of living to the European Union average and beyond. Portugal
My government is strongly committed to curbing public spending, decreasing corporate income taxes and guaranteeing firm control of our public finances. We believe that business is the source of economic growth and well being, and we are enacting policies focused on increasing the efficiency of the Portuguese economy. In some instances, we will deregulate; in others, we will create independent authorities to supervise competition and business practices.
As I said, my government has made the economy’s efficiency and competitiveness the cornerstone of its economic policy. Given our current situation, we believe that foreign investment is a key factor for us to regain high growth rates. We need foreign capital to modernize and to leap to the cutting edge in certain areas.
To that end, we have recently created the Portuguese Agency for Investment. This Portuguese Agency for Investment will be the sole interface for large investment promoters – in its essence, “one-stop shopping” for investors, both domestic and foreign. It shall identify investment opportunities in
and handle all the required administrative procedures, including applications for financial and tax incentives, licensing and installation processes, as well as the negotiation of special contract regimes. This will save time and money for investors. Portugal
The Portuguese Agency for Investment is the only address foreign investors will need to begin investing in
Second, we have innovative people
is a country wide open to the world and to innovation. Portugal
, the world is its geography. And one of the features of the Portuguese people, as history has shown, is its eagerness to innovate and experiment. Let me give you two specific examples: Portugal
· We were pioneers of the most advanced freeway payment system in the world: an integrated, and widely used system, called Via Verde that allows automobile drivers to travel throughout
without stopping at toll booths; Portugal
· Another example is the enormous success of cellular phones in
. Instrumental to that success was the pre-paid system, where customers buy phone minutes before use. This innovation, first introduced in Portugal , was extremely important for the deep penetration of cellular phones in Portugal . Currently, cellular phone services are an important industry cluster in Portugal , and many companies think of Portugal as the right market to develop and test innovations. Portugal
Our most important asset, however, is the quality of our people
has a flexible, productive and well-educated labor force. Currently around 6,5 per thousand people in the 20 to 29 year cohort have college degrees in engineering and the sciences. Even though we are still working hard to improve this figure, it is already well within the range of most industrialized nations. Equally important, our labor force is increasingly able and willing to use English as a working language. Portugal
According to OECD data, real productivity growth in
between 1995 and 2001 was well above that of countries like Portugal , Germany , UK , France , Spain , Netherlands and even the Denmark . To reinforce this positive path, we are currently conducting a major overhaul of labor laws in United States to make our labor market even more flexible so that companies can better adapt their strategies to the speed of change in the global markets. Portugal
Third, we have good infrastructures in transportation and telecommunications
has well-developed infrastructures for transport and communication. The telecommunications infrastructure is modern and has capacity and coverage. The transport system for goods and services is very good, especially along the Lisbon-Porto and Lisbon-Madrid axes. Portugal is also a major European port. Moreover, there are a growing number of medium-sized cities in Lisbon where companies will find very attractive location facilities for all types of industries. Portugal
Fourth, we are a modern country
is modernizing quickly and surely. Income per capita in Portugal (adjusted for purchasing power parity), hovers today around 75% of the European Union average. Agriculture represents only 4% of our national production, industry is responsible for 29%, and services have a contribution of 67%. Portugal
Regarding capital markets in particular, capitalization has increased significantly with the presence of the newly privatized companies, which are today amongst the most traded stocks and represent, altogether, almost 68% of market capitalization of the main index of the Lisbon Stock Exchange (PSI – 20). Nevertheless, we must still strengthen our capital markets.
’s membership of Euronext group along with the Portugal , Paris and Brussels stock exchanges is helping a small capital market such as ours to have a greater exposure to new opportunities and to enlarge its potential turnover. Amsterdam
has a new, young and reformist government. My government is committed to structural reforms. We want to make our economy less dependent of the state, more flexible, so that capital and labor can adjust to changing market conditions. We are part of a new generation that believes that Portugal will be among the most developed countries in Portugal Europe. I know not of a single reason that would prevent us from achieving this goal.
Fifth, monetary and economic stability has been provided by membership of the European Union
is well anchored within the European Union. We are founding members of the Euro currency, and participate in the decision-making of the European Union on all matters. The European Union has brought to Portugal an economic and monetary stability that is well regarded by major investors. Portugal is strongly committed to the conditions that Portugal Europehas enshrined in the Growth and Stability Pact and in the Treaty. My government will deliver the necessary government budget results both in the short as well as in the medium terms.
By investing in
, you are also investing in the heart of Portugal Europe, because you will have a very similar regulatory and institutional environment.
is an economy with a free flow of capital. Therefore, capital investments and outflows of capital are decided freely by investors. And you know that our membership of the European Union and the Euro currency will guarantee that all governments will keep it that way. Portugal
In this and other senses,
is a gateway to Portugal Europe. And my country can be your southern gateway to Europe.
Sixth, we provide low operating costs
has the lowest operating costs in Portugal Western Europe. In 2000, Healey & Baker concluded a survey of more than 500 European companies, which ranked as the best location in Lisbon Europein terms of cost and availability of staff. The US Department of Labor put manufacturing costs in at 55% less than in Portugal , 70% less than in the Spain and 80% less than in US . A comparative survey recently led by Price Waterhouse Coopers concerning the operating costs for a car component plant in various locations around Europe put Lisbon 40% below its closest rival, Barcelona, and less than one third that of Dusseldorf. Germany
Seventh, we are a country that is attractive to business expatriates
On a personal note, I would like to tell you that all business expatriates I know (and I know many) very much enjoy working and living in
, and actually many choose to settle there for life. This is not surprising in view of our privileged climate and the beauty and variety of our country, as well as its safety. It is certainly a country where your executives will be more than willing to travel to and to live in. Portugal
By the way, we are also a premier golf destination in
Europeand I suspect that many business investments and deals are closed on our golf courses. For some of you, this reason – good golf - may be the most important reason of all.
Eighth, the Portuguese Diaspora is a Portuguese asset
Let me remind you that there is a substantial Portuguese Diaspora around the world, but especially in the
. You will be able to capitalize on this in various ways. First, many of these Portuguese abroad are very successful businessmen in their own right. Their knowledge and skills are much appreciated and welcome in US . Second, you will find right here in the Portugal many people with strong links to US . People you can talk to and who will be able to help you set up operations in Portugal, reducing your perceived risk, through better independent knowledge of Portuguese ways, language and culture. Portugal
Ninth, we have a new generation of builders and leaders in
Portuguese business leaders and builders are self-confident and assertive, and you will find many competent local business talents to help you develop and manage your business projects. Young Portuguese entrepreneurs are confident and reliable. They have a can-do attitude and you will find that some of them have come out of your most prestigious business schools.
Tenth, we are a Government committed to reducing the corporate tax rate across-the-board during this political cycle
I would like to end this presentation with one more piece of good news.
is today amongst the countries with the lowest corporate income tax in the European Union – 30 percent. Because we know this is a critical aspect for investors facing the choice of several possible locations, we are making available an incentives package that includes significant tax credits, loans for fixed asset investments, cash grants for training expenses and social security exemptions for first time employees and others. Portugal
But we will go even further. The Government has promised to reduce the corporate tax rate during this political cycle. The Portuguese people already know that we are delivering on all major policies that we have included in our program for the first year. So, you too can believe that our commitment to help business create wealth for
is core to our economic and fiscal strategy. Portugal
Ladies and gentlemen,
I know the time is right for you and your business to invest in
. I sure hope you do not miss out on making this important business step. Portugal
There is a popular song by Paul Simon, whose lyrics say that there are fifty ways to leave your lover. I am in a more positive mood. That is why I believe I gave you ten good reasons to find a new love: