Economy

Resignation, Not Revolt: Portugal's Unusual Calm On The Brink Of Economic Collapse

Singing the blues in Lisbon
Singing the blues in Lisbon
Mathilde Farine

LISBON – Manuela, an animal rights activist, is standing outside the entrance to the Entrecampos train station in Lisbon, calling out to the occasional passersby, who pretend they don’t see her.

The majority of the shops in the station’s arcade are empty, and even though the building is new, there is a feeling of neglect. The trains, which depart from the second floor of the station, set off into the capital's autumnal, muggy haze.

When the economic crisis is mentioned, the young woman starts with a sigh - she has had to pay a heavy price. The 30-year-old Lisbon native lost her job in a veterinary hospital and since then, has had to accept a lower-paying job in a beauty parlor. She dreams of moving to the Netherlands or Switzerland, and blames Europe for pushing Portugal into a never-ending cycle of recession and budget cuts.

At the beginning of 2011, despite austerity measures that were well underway, extremely high interest rates were strangling Portugal. In April, prior to socialist José Sócrates's departure as Prime Minister, the government decided to ask for international aid. The troika - the European Central Bank (ECB), the European Commission and the International Monetary Fund (IMF) - took up residence in Lisbon and tried to tackle the reduction of the deficit, which had reached 7.3% of the GNP in 2010.

The last seven trimesters have been marked by recession, and forecasters do not predict growth for next year either. At the same time, the rate of unemployment has risen to 15%, a figure that has never been seen before on the Iberian Peninsula.

Depression lurks in the winding streets of this city of seven hills. The recession is worsening. The GDP is expected to shrink to 3% this year, down to 1% next year. Moreover, Portugal is going through a decade marked by a growth rate inferior to 1%.

The country has had to deal with China's integration to the World Trade Organization (WTO) in 2001 and the subsequent torrent of cheap textiles in the marketplace. Also, the European Union's eastward expansion has created fierce competition in attracting foreign investors. "The car manufacturing industry has moved to the East," says Pedro Lains, professor in history and economics and the University of Lisbon. Volkswagen is the notable exception. A stalwart of Portuguese exports, it represents 3% of the total.

Almost wiped out, the textile industry has, however, reacted by becoming more upmarket and remains one of the country's most important export industries, along with machine tools. "Rather than making t-shirts as they did before, some companies are now focusing on printers for printing t-shirt patterns," explains Pedro Lains. High-quality fashion garments and shoes, made by state-of-the-art equipment, are replacing the production of simple, casual wear. "But that takes time, and the crisis has crippled this process," Lains says.

State of emergency

"Our country is in a state of emergency," says Sandro Mendonça, in a typically Lisboan restaurant, where the ceramic tiled walls create an echo.

The economist, a specialist in competitive performance issues, aggressively sticks his fork into his grilled sea-bream, as if he were stabbing it into the back of the troika or the government. He has sifted through all the measures in the "memorandum of understanding," signed by Portugal and outside financial providers. In the hundreds of provisions, only a handful was found to be able to realistically improve growth. "No more than 2%. The measures are supposed to promote activity, but that doesn't mean they will be effective. They are often too far-flung or too vague," he says, citing, for example, the incentives for universities to become more privatized.

In the capital and its surroundings, the feeling of resignation has taken over. "We have been spending more than we actually have. We really need to tighten our belts now," sighs João, a young manager for a chain of luxury hotels. The exorbitant amount of taxes being imposed is discouraging. However, people know there is no alternative: a thought shared by many Portuguese people.

At the beginning of September, the center-right Prime Minister Pedro Passos Coelho announced that social security contributions paid by employers would be lowered to 18%, from 23.75%. In return, workers would see their contribution climb from 11% to 18%. The announcement was met with an outcry, and numerous demonstrations. Even economists and business leaders criticized the decision, judged to be completely unjust, so much so that the government has retracted it.

Disappearing budget

Still, dissent has gone down a notch and a calm has settled over Lisbon. Even more so than usual. "There are no traffic jams, the roads are generally clear now that carpooling has grown in popularity, and companies have reduced the amount of cargo transportation. Now, we can see the good side of the crisis," explains Vincent, originally from Switzerland, who has lived in the suburbs of Lisbon for almost 30 years, as he hurtles down the small, paved alleyways and off onto the main boulevard.

The calm is obscuring the fact that austerity has pushed Portugal to the brink. "For this year, the troika demanded that the budget be reduced by 2 billions euros. The government, which has publicly announced that it wants to do more, has warned that it might reduce it by 5 billion. The result is that it has ended up with a budget of 1 billion because it hadn't anticipated the contraction of economic activity and the drastic reduction in income," outlines Pedro Lains.

In fact, Portugal's budget deficit must go down to 4.5% of the GDP this year. Creditors have agreed to adjust this prediction to 5%, and to give the country more time, in order to have a balanced budget by 2014. "This government is obsessed with the idea that if accounts are made healthier, things will take off again. But that has never worked, anywhere. And, in this case, it could do a lot of damage," he warns.

Numerous economists are also criticizing the cuts, which are usually salary cuts and tax hikes, but rarely spending cuts. Entrepreneurs are also starting to worry. "The worst isn't austerity. It's the government's equivocation. They decide on something one minute and then change it the next," deplores Antonio, who is the manager, along with his wife, of a small interior design business. "I don't know how much tax I'm going to have to pay next year - 50%? More? How are we supposed to invest and hire new people in these conditions?

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Geopolitics

How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.


But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

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