During the height of the financial crisis, citizens left their home countries in droves to look for work. Young people, especially those with degrees, migrated from Portugal, Spain, and Greece to other parts of Europe, or even further afield, in search of financial stability. Now that Portugal has turned a corner and its economic growth continues to expand at a faster rate than the rest of the eurozone, the country is seeking to tempt them back home.
So far, however, that’s been easier said than done.
Portugal’s diaspora is vast. More than 600,000 citizens emigrated during the financial crisis. Since the Socialists took power, convincing those that left to return has been a key government priority. Yet an additional 260,000 have also chosen to leave. According to the World Bank, Portugal has approximately 20 percent of its population residing abroad, and remittances sent back home are a major part of the economy. The Bank of Portugal reported that in the first six months of 2019, remittances received amounted to 1.95 billion euros – an increase of 15 percent year-on-year.
This is explained, in part, by the fact that many emigrants are young and highly educated, and their loss to the nation’s industry – in a rapidly aging population of little more than 10 million – is deeply felt. This is especially true for the pension and labour market, as well as agriculture and manufacturing.
There is also a shortage of trained personnel in the healthcare sector too, a result of when the government slashed the healthcare budget during the height of the crisis. The country has responded by working to create more prospects for well-educated citizens, including making room for start-ups and new business to grow, opening approximately 30,000 job vacancies, and bringing unemployment down to 6.5 percent – the lowest rate in fifteen years. Immigrants from eastern Europe and Africa only partially address this labour shortage.
This past July, Portugal launched a programme with a budget of 10 million euros for the year in order to entice its citizens to return home. After seeing a low returnee rate of only 71 individuals, the government tried again, tweaking requirements to make it easier to lure citizens back home, ideally to the tune of 1,500 or more.
Changes include easing the deadline by which prospective returnees can apply. The programme is offered to citizens who left before December 2015, and returnees must have secured a permanent work contract anywhere between January 1st, 2019 and December 31st, 2020. Originally, emigrants had to apply within 60 to 90 days of starting work and provide documentation to prove their status. Now, they can apply at any time and with less documentation.
The Return Programme’s financial incentives – 2,614 euros in cash, a 50 percent income tax reduction for five years, and up to 3,886 euros to cover relocation costs – haven’t changed. However, it’s precisely those incentives that many emigrants say is insufficient to tempt them back home. Despite Portugal’s financial come-back, wages are still higher in countries like Switzerland and Germany.
“People go abroad specifically because they’re going to earn more”, Bernardo Larisch, a 25-year-old Portuguese musician living in London, told Reuters. “Come back to Portugal, to earn less, on a small financial incentive? I can’t see anyone taking that up.”
Rodrigo Oliveira, 35, a supply chain planner who left Portugal in 2009 and now works in Switzerland, also told Reuters, “I earn ten times the salary I would in Lisbon over here. Honestly, me and my Portuguese friends abroad, we laugh at programmes like this.”
But others are taking the plunge, returning to both Spain and Portugal. In the latter, the number of returnees has surpassed the number of people exiting; Spain, however, is benefited by private organisation “Volvemos“, Spanish for “We are returning”, having aided more than 600 people in moving back to their country. So far, more than 83,000 Spaniards returned in the year 2018, and the number returning has also surpassed the number leaving.
As it remains, only time will tell if the government’s financial incentives, homesickness, or both will be enough to encourage Portugal’s diaspora back home to its open and waiting arms.