Dignified But Debt-Ridden, Portugal Faces Tough Choices

Proud of their quickly constructed but costly welfare state, the Portuguese have always wanted to play in Europe’s big league. Now that it’s time to pay the bill, they may have to reconsider.

Student protester in Lisbon (Pedro Simoes)
Student protester in Lisbon (Pedro Simoes)
Joëlle Kuntz

LISBON - It took Portugal only 36 years to build the social institutions and infrastructure that other European democracies needed 60 years to create. The result, however, is a national debt that has grown so cumbersome it recently brought down the Socalist prime minister, José Sócrates.

Portugal has three options, says Luciano Amaral, author of an essay on his country's economic deficiencies. First, it might get lucky and experience a sudden Irish-like miracle that brings in investors capable of promoting the kinds of highly productive activities that could actually interest global markets. A second possibility is that Portugal declare itself insolvent and run the risk, just like some Latin American countries did only a few years ago, of totally destroying its international reputation. The third and final option is that Portugal acknowledge its inability to cope with its own economic problems, accept the status of a simple European region, and wait for income transfers to offset its low productivity.

National pride would undoubtedly suffer, but, provided rich Europeans accept it, this third model would benefit Portugal the most. Nevertheless, Prime Minister Sócrates firmly rejected the option by resigning Wednesday. The move came after his package of savings, accepted only a few days earlier by the European Commission, was rejected by parliament.

In Portugal, political imperatives have always trumped economic ones. This old country, one of the oldest in Europe, has always wanted to prove its worth. Political parties have competed to succeed and government balance sheets are reasons for national pride or shame. At the moment, the budget deficit (7% of GDP) and a shortfall of 9 billion euros needed to pay a June debt bill make people blush with embarrassment.

Forthcoming elections will no doubt set the stage for a general display of nationalism. Ordinary people will question why they should be the ones to bear the brunt of pending budget sacrifices, and some will castigate those "who prevent Portugal from being a normal and prosperous country like the others."
The country will keep itself busy identifying the usual list of culprits: the mentality and culture of the Portuguese people "who live above their means," the state's exaggerated role in the economy, the rigidity of the labor market, poor quality in the labor force, wasted spending, corruption, and so on.

The people's hunger for dignity has been at the center of Portugal's democracy since 1974. Due to circumstances, however, that desire has come at a particularly high cost. Unlike most European countries, which built their welfare states during the postwar golden age, Portugal established its system during the oil shock and the ensuing recession.

"We owe our social state to a historical rupture," says Antonio Barreto, Chairman of Francisco Manuel dos Santos Foundation. "We wanted to seize the moment and align ourselves with the European model. And rightfully so. But the context at that time was far from propitious, both nationally and internationally."

The benefits are mixed, the researcher says. Universal health coverage can be considered a success, and the 7 to 8% of GDP spent on it has produced some remarkable results. Portugal, for example, has one of the lowest infant mortality rates in Europe. But the money spent on education has been less successful: the country's high enrollment rates have not boosted employment figures.

Education reform should be at the very top of Portugal's priorities. Too often, young graduates are condemned to working as taxi drivers and waiters; overqualified employees resign themselves to doing part-time and temporary work. Adults in their 30s have no choice but to live with their parents. Who is to blame for this? A faulty education system? Inappropriate university courses? Experts have yet to find an answer.

Young people are starting to protest. The Homens da Luta (The Men of the Struggle) rock band, best known for its song "I belong to the unpaid generation," will represent Portugal in the upcoming 2011 Eurovision Song Contest, set to take place in Dusseldorf, Germany.

"Our two biggest problems right now are low capital intensity in relation to labor, and also low productivity," says Luciano Amaral. "These two factors have encouraged the expansion of the non-market sector of the economy, as well as construction, health services and education."

The country has in fact become Europe's champion in terms of the number of highway miles per capita. Gigantic hypermarkets have mushroomed everywhere, and the number of cars is reaching impressive proportions, thus adding private debt to public debt. Cheap housing loans combined with shortages in the rental market has brought the total debt to a whopping 140% of GDP.

In the past, a national currency and the possibility to devalue it had allowed the country to improve access to export markets. The introduction of the euro has put an end to this practice, leaving Portugal with a currency that is much too expensive compared to its productivity.

As if this were not enough, several international events have added to Portugal's woes. The 2008 international financial crisis worsened the trade deficit. A related decline in remittances sent home by Portuguese emigrants coincided with an increase in remittances sent out of the country by Portugal's now larger communities of Eastern European or African immigrants. The eastern expansion of the European Union, meanwhile, has diverted foreign investment to other regions. The result was a situation of quasi-bankruptcy.

The budget deficit is deeply embedded in the history of this young and economically fragile democracy. The only budget cuts possible in the short-term are in the public sector. But they will be all the more difficult to implement since the social measures adopted these last 36 years have not been able to lower the income inequality gap. Alongside Lithuania and Bulgaria, Portugal today stands as one of the three most unequal countries in Europe.

Read the original article in French.

Photo - (Pedro Simoes)

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The Food Truck, A Sign That The White And Wealthy Are Moving In

In San Diego, California, a researcher tracked how in the city's low-income neighborhoods that have traditionally lacked dining options, when interesting eateries arrive the gentrification of white, affluent and college-educated people has begun.

Balboa Park Spring Fling Food Truck festival

San Diego Food Trucks via Facebook
Pascale Joassart-Marcelli

SAN DIEGO — Everybody, it seems, welcomes the arrival of new restaurants, cafés, food trucks and farmers markets.

What could be the downside of fresh veggies, homemade empanadas and a pop-up restaurant specializing in banh mis?

But when they appear in unexpected places – think inner-city areas populated by immigrants – they're often the first salvo in a broader effort to rebrand and remake the community. As a result, these neighborhoods can quickly become unaffordable and unrecognizable to longtime residents.

An appetite for gentrification

I live in San Diego, where I teach courses on urban and food geographies and conduct research on the relationship between food and ethnicity in urban contexts.

In recent years, I started to notice a pattern playing out in the city's low-income neighborhoods that have traditionally lacked food options. More ethnic restaurants, street vendors, community gardens and farmers markets were cropping up. These, in turn, spurred growing numbers of white, affluent and college-educated people to venture into areas they had long avoided.

This observation inspired me to write a book, titled The $16 Taco, about how food – including what's seen as "ethnic," "authentic" or "alternative" – often serves as a spearhead for gentrification.

Take City Heights, a large multi-ethnic San Diego neighborhood where successive waves of refugees from places as far away as Vietnam and Somalia have resettled. In 2016, a dusty vacant lot on the busiest boulevard was converted into an outdoor international marketplace called Fair@44. There, food vendors gather in semi-permanent stalls to sell pupusas, lechon (roasted pig), single-sourced cold-brewed coffee, cupcakes and tamarind raspado (crushed ice) to neighborhood residents, along with tourists and visitors from other parts of the city.

Informal street vendors are casualties.

A public-private partnership called the City Heights Community Development Corporation, together with several nonprofits, launched the initiative to increase "access to healthy and culturally appropriate food" and serve as "a business incubator for local micro-entrepreneurs," including immigrants and refugees who live in the neighborhood.

On paper, this all sounds great.

But just a few blocks outside the gates, informal street vendors – who have long sold goods such as fruit, tamales and ice cream to residents who can't easily access supermarkets – now face heightened harassment. They've become causalities in a citywide crackdown on sidewalk vending spurred by complaints from business owners and residents in more affluent areas.

This isn't just happening in San Diego. The same tensions have been playing out in rapidly gentrifying areas like Los Angeles' Boyle Heights neighborhood, Chicago's Pilsen neighborhood, New York's Queens borough and East Austin, Texas.

In all of these places, because "ethnic," "authentic" and "exotic" foods are seen as cultural assets, they've become magnets for development.

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

A call for food justice

Cities and neighborhoods have long sought to attract educated and affluent residents – people whom sociologist Richard Florida dubbed "the creative class." The thinking goes that these newcomers will spend their dollars and presumably contribute to economic growth and job creation.

Food, it seems, has become the perfect lure.

It's uncontroversial and has broad appeal. It taps into the American Dream and appeals to the multicultural values of many educated, wealthy foodies. Small food businesses, with their relatively low cost of entry, have been a cornerstone of ethnic entrepreneurship in American cities. And initiatives like farmers markets and street fairs don't require much in the way of public investment; instead, they rely on entrepreneurs and community-based organizations to do the heavy lifting.

In City Heights, the Community Development Corporation hosted its first annual City Heights Street Food Festival in 2019 to "get people together around table and food stalls to celebrate another year of community building." Other recent events have included African Restaurant Week, Dia de Los Muertos, New Year Lunar Festival, Soul Food Fest and Brazilian Carnival, all of which rely on food and drink to attract visitors and support local businesses.

Meanwhile, initiatives such as the New Roots Community Farm and the City Heights Farmers' Market have been launched by nonprofits with philanthropic support in the name of "food justice," with the goal of reducing racial disparities in access to healthy food and empowering residents – projects that are particularly appealing to highly educated people who value diversity and democracy.

Upending an existing foodscape

In media coverage of changing foodscapes in low-income neighborhoods like City Heights, you'll rarely find any complaints.

San Diego Magazine's neighborhood guide for City Heights, for example, emphasizes its "claim to authentic international eats, along with live music venues, craft beer, coffee, and outdoor fun." It recommends several ethnic restaurants and warns readers not to be fooled by appearances.

Longtime residents find themselves forced to compete against the "urban food machine"

But that doesn't mean objections don't exist.

Many longtime residents and small-business owners – mostly people of color and immigrants – have, for decades, lived, worked and struggled to feed their families in these neighborhoods. To do so, they've run convenience stores, opened ethnic restaurants, sold food in parks and alleys and created spaces to grow their own food.

All represent strategies to meet community needs in a place mostly ignored by mainstream retailers.

So what happens when new competitors come to town?

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

Starting at a disadvantage

As I document in my book, these ethnic food businesses, because of a lack of financial and technical support, often struggle to compete with new enterprises that feature fresh façades, celebrity chefs, flashy marketing, bogus claims of authenticity and disproportionate media attention. Furthermore, following the arrival of more-affluent residents, existing ones find it increasingly difficult to stay.

My analysis of real estate ads for properties listed in City Heights and other gentrifying San Diego neighborhoods found that access to restaurants, cafés, farmers markets and outdoor dining is a common selling point. The listings I studied from 2019 often enticed potential buyers with lines like "shop at the local farmers' market," "join food truck festivals" and "participate in community food drives!"

San Diego Magazine's home buyer guide for the same year identified City Heights as an "up-and-coming neighborhood," attributing its appeal to its diverse population and eclectic "culinary landscape," including several restaurants and Fair@44.

When I see that City Heights' home prices rose 58% over the past three years, I'm not surprised.

Going up against the urban food machine

Longtime residents find themselves forced to compete against what I call the "urban food machine," a play on sociologist Harvey Molotch's "urban growth machine" – a term he coined more than 50 years ago to explain how cities were being shaped by a loose coalition of powerful elites who sought to profit off urban growth.

I argue that investors and developers use food as a tool for achieving the same ends.

When their work is done, what's left is a rather insipid and tasteless neighborhood, where foodscapes become more of a marketable mishmash of cultures than an ethnic enclave that's evolved organically to meet the needs of residents. The distinctions of time and place start to blur: An "ethnic food district" in San Diego looks no different than one in Chicago or Austin.

Meanwhile, the routines and rhythms of everyday life have changed so much that longtime residents no longer feel like they belong. Their stories and culture reduced to a selling point, they're forced to either recede to the shadows or leave altogether.

It's hard to see how that's a form of inclusion or empowerment.The Conversation


Pascale Joassart-Marcelli is a Professor of Geography and Director, Urban Studies and Food Studies Programs at San Diego State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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