I\’ll tell you what\’s wrong with the Portuguese economy

A little tale from recent experience.

In the setting up of Algarve Golf we needed to have two legal structures. One a not for profit association under Portuguese law. Yes, it did need to be a not for profit because that\’s the only type of organisation that can affiliate to the Portuguese Golf Federation and thus issue handicaps.

We also needed a for profit arm and did that as an LLP under UK law.

To get the LLP we downloaded the forms, filled them in and sent them off. Even with me managing to get the forms wrong the first time and having to repost them, total elapsed time 10 days (including international post) and cost of £20.

The Association? Two months of elapsed time and costs of around € 2,300. And the absurdities we had to go through to get something as simple as a bank account…..after the external legal documents at the notary (yes, we had to have one of those, our solicitor wasn\’t good enough) and the internal set (who is on the finance committee, who the admin etc) then our account was still not opened because we hadn\’t pasted the board resolution concerning who were the authorised signatories into the special \”Acta\” book.

If it\’s true that economic growth comes from entrants to the market (something which is braodly true) then we might be seeing something of a reason why it\’s been so anaemic here for so long. We had been considering incorporating our next adventure under Portuguese law but now absolutely certainly will not.

Another more general observation: around here (internal Algarve, not the concrete and baked beans of the coast) the top jobs are in the bureacracies.  Social class and education aren\’t difficult to spot here: as with pre WWI Britain, height is a reliable guide in those over a certain age. And those who have that class and education…..well, let\’s put it this way. The local water board in the payments office employs taller people who dress better and speak more languages than does most of the retail economy I see around me.

They\’re also paid more as well. I can\’t help feeling that when the local water board is one of the more desired posts (and the same is very much true of the post office, the people collecting the money at the electricity office and so on) then you\’ve got something of a problem with trying to build a vibrant private sector economy.

On the other hand, most around here are looking forward to a good tourist season this year. Yes, of course, everyone\’s got problems, there\’s not a lot of money around for travel. But no one\’s going to be going to North Africa this year, are they?

5 thoughts on “I\’ll tell you what\’s wrong with the Portuguese economy”

  1. “But no one’s going to be going to North Africa this year, are they?” You’ve not met my daughter, have you?

  2. Could be worse, could be one of those countries Hernando do Soto describes in “Mystery of Capital”

  3. Ditto for Spain, Tim

    The local university sociology department does a survey of each year’s intake of new undergraduates. Any guesses as to the most popular work ambition? Year after year more than 50% want to be a civil servant!!!!!

    Last weekend, there was an interview with the IKEA Chaiman in one of the Sunday glossies. 10 years and they haven’t been able to open in the Valencia area, (political protection for the local furniture industry) and the longest lead times for permits that he was able to think of out of all the countries that they operate in.

    The current government not only doesn’t get it but is emotionally and intellectually incapable of getting it. Mind you, I don’t have much faith in the other bunch either.

    They talk about reform as though tinkering with a percentage here or there is reform.

    They have no idea of what is necessary to get us into (not back into as we were never there) the Champion’s League of European economies (Zapatero dixit 2 years ago).

    Two words come to mind, the diminutive of ‘Richard’ and ‘head’.

  4. Bilbao boy: I would have thought that the Basque Country would be one of the less bad bits of Spain, too. I suppose the comparison is between really bad and even worse, though.

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