A new lament is sweeping around the world. Already viewed close to a million times on several YouTube clips, Que Parva Que (What a Fool Am I) is a song mourning the plight of Portugal’s young generation hit by their country’s economic disaster. The song speaks of a generation studying but with no prospect of paying work, putting off relationships and children, the ‘parents’ house generation’.
There is much to lament. Portugal’s unemployment rate stands at a record 11.2 percent and among 15 to 24 year-olds the rate is 23 percent. In the words of one young Portuguese university graduate, demonstrating recently against unemployment along with hundreds of thousands of others: “The only work we can get is ‘work experience’, the only future we are offered is emigration”.
In Sad Songs from Portugal, Oliver Marc Hartwich writing in the Business Spectator found plenty more to be sad about. As early as 2006 – well before the current Euro crisis – with the country’s cost competitiveness declining, productivity stalled and its economy sluggish, Portugal’s fuga de cérebos (brain drain) was already visible:
[A survey published in 2006] found that hardly any other developed economy had lost as many of its university educated workers to migration as Portugal. Almost a fifth of Portugal’s graduates had left the country. Even poorer Cambodia, Senegal or Zambia were better at retaining their best qualified workers. ….
The loss of the country’s best qualified people is a disaster for the Portuguese economy – especially because Portugal has the least qualified population in the OECD. A mere 28 per cent of all working age adults have completed high school. This compares to 51 per cent in neighbouring Spain, 70 per cent in Australia or 91 per cent in the Czech Republic. If there is one country that cannot afford a large loss of its young graduates, it isPortugal.
Oliver notes that as well as the fuga de cérebros to EU countries, many young Portuguese migrants have headed for Brazil, where the number of registered Portuguese citizens has risen by 9 percent to 705,615 since 2008.
The same development could also be observed in other traditional migration countries. In just the last two years the number of Portuguese nationals jumped 6.3 per cent in the US, 16.0 per cent in Canada and 4.8 per cent in Australia.
The European rescue package will do little to make Portugal more attractive to its young generation. They only have to watch the news from Greece to see their own future. Overly indebted, unable to fund itself at reasonable interest rates in capital markets, the government will become dependent on funds from the European rescue funds almost indefinitely. And yet within the monetary corset of the euro there is little hope to regain competitiveness without resorting to a massive and painful internal devaluation – if this strategy will work at all.
At the risk of being melodramatic, it’s a story we should heed. With our own rate of unemployment for the latest quarter standing at 6.6 percent, youth (15 to 24 year-old) unemployment at 18.8 percent, and Maori youth unemployment at a shocking 28.8 percent, we should be very concerned. And with a net outflow of 3,200 permanent or long-term NZ migrants departing for Australia in the month of April (up from 1,500 in April 2010 and the highest for an April month since 2008) we should perhaps be writing our own sad song.