September 30, 2015 / 12:31 PM / in 2 years

Portugal brain drain spells lasting headache for election winner

LISBON (Reuters) - Portugal heads into a national election on Sunday with a sounder economy than four years ago. But the austerity that made it more competitive has led to a mass exodus of youthful talent that will set back the recovery regardless of who wins.

Emigration has become a major campaign issue in a tight-fought election race that has no clear winner in view.

The opposition has promised to bring back the best and brightest. But with the conditions that caused them to flee seemingly entrenched, notably an unemployment rate affecting one in three young people and available jobs often badly paid and without firm contracts, that promise will be tough to keep.

A total of 485,000 people left Portugal between 2011 and 2014, including almost 200,000 as permanent emigrants, with most aged 30 or under, according to official data.

Even as the main opposition Socialist candidate Antonio Costa poses with young supporters in “I don’t want to emigrate” T-shirts or opens a “Vote for Return” portal trying to capture the expatriate vote, many of those who left doubt that Portugal will provide enough well-paid, career-building jobs any time soon.

“My heart is split. I love Lisbon, but I don’t see myself coming back in the near future,” said 29-year-old postgraduate Mailis Rodrigues, who works on a music technology project in Montreal co-funded by the Canadian government.

“I had no prospects to speak of in Portugal. Had I stayed I guess I would have found a job, but not with the same conditions,” said Rodrigues. “I’d like policies to change, but realistically I don’t expect much from any new government.”

NET EMIGRATION SINCE 2010

Halfway across the globe in Hong Kong, 30-year-old civil engineer Tiago Sacadura has similar concerns. Like many, he’d prefer to live in his sun-kissed homeland with sandy beaches, good food and wine and a laid-back atmosphere.

“It was pondering my prospects in five years’ time that made me leave. I‘m always thinking about going back - my friends and roots are in Portugal. But it would mean taking a huge step back in terms of career and pay,” he said.

He had two promotions in the past two years and earns about four times his last Portuguese monthly wage of 1,300 euros ($1,460) in 2012, still considered a hefty paycheck back home.

“The economy is now better, but I don’t think the situation will change sufficiently for people to stay ... And I don’t believe the Socialists can make much of a difference,” said Sacadura, who describes himself as left-leaning.

After years of net immigration into Portugal, EU data shows, the trend inverted in 2010 and stayed that way to at least 2013 when a net 36,000 left. That was the largest outflow in western Europe after Spain, from where experts say more non-nationals left for other countries.

At the height of the economic crisis in 2011, officials in Prime Minister Pedro Passos Coelho’s government advised citizens to seek work abroad if they could find none at home.

The pragmatic advice upset many, however, and the opposition - which promises to prioritise youth job creation and improve long-term employment opportunities under a plan that is short on detail - has chastised the government on the issue ever since.

While unemployment has fallen from an early 2013 peak of nearly 18 percent to 12 percent, youth joblessness has held above 30 percent.

Passos Coelho now urges young emigrants to come home, but a government programme with that aim has been ridiculed for targeting just 20 people, to be picked next year from a list of applicants with a business plan.

BUMPKINS NO LONGER

While Portuguese emigrants traditionally used to be unskilled, now most are educated urban professionals.

A popular internet caricature juxtaposes the moustachioed, stick-carrying country bumpkin of previous decades with today’s hip young man with a backpack full of university diplomas. Both look sad-eyed and worried.

The brain drain is also a downer for the economy, entailing hundreds of millions of euros in future lost tax revenues and a general ageing of the population that puts additional strain on the pension system.

A study put Portugal’s expenditure on education that other countries will reap the benefits of at at least $11.5 billion.

“The country has thrown away 10 years’ worth of public investment in higher education,” said Luisa Cerdeira, economics professor at Lisbon University and one of the authors of the study.

It showed that nearly 70 percent of emigrants with university degrees living in Europe - primarily Britain, Germany and France - plan to stay for good.

“It’s hard to be in the classroom sometimes trying to cheer up students who know that they’ll likely have to emigrate,” she said, describing the exodus as “bleeding Portugal’s best resources linked to innovation”.

While more than 70 percent of the survey’s 1,011 respondents earned below 1,000 euros per month in Portugal, more than a half now make over 2,000 abroad.

But whereas in previous decades, emigrants sent generous remittances home and had houses built for them in Portugal, “now we see mainly middle-class children of qualified professionals, so remittances are no longer important, building a house here is not a priority,” Cerdeira said.

Portugal’s construction sector has slumped 40 percent since 2010.

The end the study means the end of scholarships for three researchers, including 31-year-old Rafaela Ganga who, with a hiring freeze in force in the public education system, is already prospecting for jobs abroad.

“That begs the question whether it’s worth investing in our future in Portugal,” she said, having seen her previous teaching job in a private university scrapped in 2013.

“I don’t see much light at the end of the tunnel here.”

(This version of the story was refiled to restore dropped word in second paragraph)

Reporting By Andrei Khalip, editing by Axel Bugge and John Stonestreet

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