- dedicated to business responses to globalization, especially on the part of Portuguese firms
In 1999 FPG had decided to continue its project on internationalization of Portuguese business. At a working lunch at Somague,  on 9 November the topic of neighbours in a global market was chosen, giving the controversy around the proposed alliance between the Champalimaud group and BSCH, blocked by the Portuguese government until the appointment of Mr. Pina Moura as Minister for Economy and Finance.  The outline of the study, commissioned to José Braz, was presented at a working luncheon at Finantia, on 10 December. The revised version was distributed at a working dinner at Grémio Literário, following the general assembly, on 31 May, 2000.
In 1998, Forum Portugal Global (FPG), created to support the Portuguese participation in the Trilateral Comission, to promote  better links between business firms and applied economic research, especially about the globalization of business, decided to study explicitly the response of Portuguese business to global markets as a way of deepening the understanding of the internationalization of Portuguese business. On June 1, I met with the Minister of Economy,  and on July 9 he convened a meeting where the Presidents of ICEP, IAPMEI and his chief of staff debated with Antonio Mexia and myself the nature of the project. Based on this exchange of views a proposal was commissioned to José Braz, partner of TEcFinance and was approved during a working dinner of the same group (also including vms@min-econ.pt and jcosta@mec.gov.pt) which took place on July 28.
Click here to read the FPG project proposal (in Portuguese)

The internationalization of Portuguese business

Last updated 3 October, 1996.

The internationalization of Portuguese business is just beginning. Forum Portugal Global was established by Portuguese enterpreneurs wishing to debate internationalization, so as to make government efforts more effective. The Forum also supports the activities of the Portuguese group of the Trilateral Commission, a private initiative dedicated to fostering closer cooperation among North America, Western Europe and Japan.

Government efforts to promote it began in the late 1980s, when, after a successful accession to the European Community, macroeconomic adjustment was in progress in an environment of political stability. Of course, there were sizeable resistances to structural reforms in the public administration and in state-owned enterprises. As a consequence, the ambitious proposal to make state action more effective by the merger of the Institute of Foreign Trade of Portugal (ICEP), the Institute of International Investment, the National Development Bank (BFN), the Company for Export Credit Insurance (COSEC) and the Institute for Economic Cooperation (ICE) was only partly implemented.

While some of these institutions did disappear, or at least have been renamed, there is still more that one government agency responsible for foreign economic policy. Worse yet, an artificial division has remained between industrial and tropical markets, leaving out a great deal of opportunities in-between. Even the more familiar markets of the EU and of the CPLP are more often seen as substitutes than as complements.

Instead of cooperating, ICEP, BFN, COSEC (then part of the BFE group) and the Cooperation Institute (now ICP) were ignoring each other, and Portuguese entrepreneurs lost opportunities for restructuring and for internationalizing when the world economy was booming.

Another effort was the creation of Funds for the Restructuring and Internationalization of Enterprises (FRIEs) approved shortly after the 1992 Budget, shortly before the onslaught of the European recession, whose gravity was misperceived by government and business alike, in part because of the boom in exports to Angola in the Spring of 1992.

Yet another effort was the pedagogic campaign based on the report of Michael Porter on the sources of comparative advantage for Portuguese firms, widely discussed between government officials and business leaders in 1994 and 1995. But the FRIEs never took off, due in part to the passive resistance of state-owned banks, and the pedagogic efforts were clouded by rumours about dissolution of Parliament and the threat of early elections.

The government sworn in after the upset in the general elections of one year ago maintained the medium term orientation of macroeconomic policy and the emphasis on structural reforms. It created a Ministry of the Economy, and in it a Secretary of State for Competitiveness and Internationalization and shows a continued commitment to helping the restructuring and internationalization of Portuguese business.

Most Portuguese firms acknowledge more readily the costs than the benefits of open markets for the trade in goods, services and assets. Reasons for this can be found in a tradition of state intervention which was extremely exacerbated when democracy was restored in 1974.

In banking and insurance, liberalization was blocked by nationalization: Banco Essi and Seguros Império belong to the Espirito Santo and the Mello families, whose economic groups have roots in the 1800s and had to restructure outside the country. Pleiade is a recent conglomerate, albeit with a long tradition in Africa which was reflected in the Lisbon 1992 Meeting.

A delayed liberalization was observed, for different reasons, in traditional export sectors like wine, where Sogrape has been a leading exporter since the 1950s. The same is true in sectors with a defensive reponse to interdependence like construction, where Bento Pedroso, now owned by the Brazilian concern Odebrecht, has been at the forefront of internationalization. Private firms understood the challenge of globalization in telecommunications, where Telecel, in natural resources and energy, with Portgas, in environment-related activities, with Somague and in legal services (with ML&GT).

Among the founders, 5 corporate representatives and 4 present or past individual members of the Portuguese group of the Trilateral Commission were elected to the ruling bodies. New members of FPG - especially in other sectors and under the statutory minimum of 20 -  include Banco Finantia, Lusomundo, Portucel, Semapa and Sojornal.