Migration and Talent Retention – “Portugal needs migrant workers and that’s it!” says minister

Portugal’s minister, who oversees government and public sector policy, says that Portugal needs more but controlled immigration to make up for the country’s falling birth rate, the emigration of its most talented youth, while the government must stop propping up zombie companies that drain the State.

These were some of the measures and policies outlined by the Minister of the Presidency, António Leitão Amaro in what was his second invitation to address the International Club of Portugal last week (December 11), the last being nine years ago.

Discussing two people-focused interlinked issues – “retaining talent and attracting overseas citizens” with the talent that Portugal needed to be more prosperous and wealthier, António Leitão Amaro said the government had “a concern and a vision for attracting talent to an economy in which one of the main factors for growth is labour and its quality, qualifications, and productivity”.

“We want a number of workers and people in Portugal that have the right qualifications and training, and the first thing we have to do is actively train them to be graduates, post graduates and have doctorates and stop them from leaving the country”, said the minister who added that a “culture of merit” had to be fostered by companies and an end to an entrenched culture of mediocracy and State hand-outs to prop up unprofitable “zombie” or bankrupt companies.

This meant greater market regulation and the end of the providential State meaning  State “hand-outs” . “If a company is failing, it’s not the State that has to bail it out. The State’s role is not to socialise their losses resulting from bad business decisions”, the minister said without giving specific examples, but at least two banks in Portugal, one of which cost the taxpayer over €8Bn to save, a perennially loss-making airline ( at least until fairly recently), and an electrical and transport systems company all spring to mind).

But on the other hand, the State should not penalise successful companies said António Leitão Amaro in a reference to the government’s proposal (actually, it was as much the previous government’s proposal) to slash IRC corporation tax – criticising the opposition parties for adopting “half measures” in cutting taxes that would have little positive benefit overall.

Emergency measures to stem overseas migration

Portugal, he said, had one of the worst cases of youth emigration from among the countries with advanced economies. “We only compare with countries that are suffering humanitarian crises, wars, drought, famine, and political persecution, and we are on a ranking where we don’t want to be”, said António Leitão Amaro.

“A country cannot plan its future on this basis. We have to take emergency measures, and one priority is to get young people to stay,” he stressed, adding that this also had to do with the amount of take-home pay they received and if it was sufficient to pay for a decent home, and if the economy was sufficiently dynamic to offer employment progression opportunities, growth and innovation.

The minister admitted that the tax incentives aimed at retaining young people (an idea from the previous government) was positive, but fell far short compared to the initial plan that had gone much further. (the government had its hands tied in parliament over the State Budget 2025).

This also involved facilitating access to measures that would make it easier for young people to buy or rent housing and still have money in their pockets, examples being exempting them from paying IMT property tax and stamp duty,

Attracting the right immigrants

The second thrust of the minister’s speech to members of the ICPT was immigration. António Leitão Amaro said that to ensure the country’s economic viability in the future, Portugal needed to adopt a policy of focused immigration and talent attraction.

This was partly because of Portugal’s low birth rate (1.3 children per couple) – according to the European Union Statistics Office, Eurostat, Portugal’s birth rate last year was the fourth lowest in Europe (0.85%), with the only three countries ahead in the table being Italy (0.73%), Spain (0.79%) and Greece (0.81%).

This replenishment rate – or rather lack of it – was not enough to sustain Portugal’s social security system in the long term, an issue recently raised by the Minister for Labour and Social Security, Maria do Rosário Palma Ramalho at a lunch organised by the American Chamber of Commerce in Portugal (AmCham) who referred to the issue as the “elephant in the room”; as well as the sustainability of public systems such as Portugal’s National Health Service or SNS.

An immigration pact with businesses

And low birth rates are a clear phenomena seen in virtually all Western and Eastern European countries, albeit for different reasons.

“We need immigrants. And that’s it!” the minister affirmed, ruling out closing Portugal’s borders to immigration.

Portugal’s relatively recently restructured immigration integration and asylum agency AIMA had multiplied its capacity to deal with processing the backlog from the influx of migrants by seven-fold, and the minister said that he wanted to create a immigration agreement with businesses.

“When we came to power, AIMA attended 800 people per day. After six months the State multiplied by six and a half times the number of people it could attend per day. Whereas before we could attend 800, now we are seeing 6,000 people a day.”

The Minster emphasised that the government’s policy was to bring overseas workers to Portugal to resolve the problem of a lack of labour. (particularly in the construction industry which needs up to 30,000 workers, and manufacturing which needs 80,000 workers as a whole).

Therefore, the government’s goal is to sign a deal with business owners. “We’ll meet our part of the bargain and you meet yours”, he said.

To facilitate this, the government was employing more people in Portuguese consulates overseas (an extra 50 staff), as well as guaranteeing to provide a reply or decision by a given date.

Businesses also needed to get involved with the recruitment processes by drawing up lists of employment candidates with the qualifications they needed, while ensuring further training, integration, and housing.

This policy has already been practised for years by multinational call centres and social media content moderators in the services sector that offer immigrants a contract and housing, but with mixed results. Often up to six are crammed into a house which is located on the outskirts of Lisbon and other cities, and salaries are still low, despite other benefits.

António Leitão Amaro thought that a reply from the government based on negotiations with business associations for work visa applications should take 20 days, which meant that AIMA would have to present a report on requests for workers in a maximum of three days.

This would mean that in under a month a person interested in working in Portugal would be able to travel with an employment contract in hand.

A moderate way over immigration

The minister of the Presidency argued for a “moderate way” when it came to Portugal’s migration policy, changing the law to tighten the rules so that priority could be given to citizens that came from Portuguese speaking countries. (PALOPS)

“We think that there should be a more favourable law for citizens from Portuguese-speaking countries and we’re waiting for parliament to act on this, given that there is cross-party agreement on the question”, he said.

“Looking at the outside world we see two main visions: boarders that are wide open and borders that are closed”.

This included repatriation projects from far-right parties in Europe, on a par with the ambition that the President Elect of the United States, Donald Trump has for illegal immigrants from Mexico and South America – effectively meaning mass deportations.

Instead, the government would call for a “moderate way” with European partners at a meeting, arguing for “moderate immigration that had to be regulated and controlled to be humanistic”, admitting that no country could cope with uncontrolled immigration (that would put intolerable pressure on social, health, public housing and education services).

And António Leitão Amaro slammed the “calamitous situation” over uncontrolled immigration that the government had inherited from the previous Socialist government under António Costa.

“If there was one area where things were dramatic and out of control it was in immigration where anybody was allowed to enter, legal or illegal”, he said referring to a legal recourse ‘Manifest of Interest’, which was suspended in June, that had allowed anyone who had 12 months of discounts (tax and social security), regardless of the type of visa they had, to become legal in Portugal.

Attracting the wrong immigrants?

António Leitão Amaro said that Portugal’s increased immigration has been on a “comparable level” to the hundreds of thousands of “returnees” – the Portuguese citizens who fled from the former Portuguese colonies in 1974 and 1975 after Portugal withdrew its troops, and its colonies became independent.

But now, one-third of fresh immigrants were hailing from non-Portuguese speaking countries. (Bangladesh, Indonesia and North Africa being among the most prominent).

“This poses a huge integration challenge for national communities, We have a lot more people who don’t speak the same language or have the same religion,” he said. (Anyone catching a Bolt or Uber taxi will recognise that you have to communicate with the driver more often than not in English as their Portuguese is usually rudimentary).

The overall message was plain. Portugal needs targeted immigrants to survive and the system needs to stop treating successful companies unfairly that are growing and doing well, while on the other hand companies needed to offer higher salaries to attract and retain the best talent.

And António Leitão Amaro concluded by stating that if there was one thing that the current centre-right PSD government under the premiership of Luís Montenegro would be remembered for, it would be for being the government that consistently cut taxes.