While tourism and mining are both on the rise in Portugal—boosting the economy—there is still a sense of malaise as the country continues to lose population. Every building at street level is tagged with graffiti, and owners seemed disinclined to do much about it. If they did paint over, how long would it take before a repeat offense?
Despite this, one thing that strikes any visitor immediately is how safe Portugal feels. We have been renting an apartment in one of the poorer neighborhoods of Lisbon (Alfama), historically an Arab or Moorish sector, but today filled with immigrants from Asia, Africa, and Latin America—plus a lot of tourists! (See photo.)
Regardless of the neighborhood or the city, one feels safe, and the data bear this out. The murder rate is 0.6 per 100,000 people, compared to 3.0 for Europe as a whole and 5.4 for the United States. That’s an enormous difference—you are 9 times more likely to die violently in the rich U.S. than in this much poorer country.
I’m not sure about the reasons for this. One factor could be the social safety net (even though it’s stretched thin by austerity measures). Another could be the legalization in 2001 of marijuana, cocaine, heroin, and LSD for personal consumption.
I have seen some poverty, and some begging, but nothing like the panhandling in my hometown of Richmond, Virginia. This is despite a poverty rate in Portugal of a whopping 17%, which amounts to several million adults, and perhaps a half million children.
Inequality is considered high by European standards, but is low compared to the U.S. The Gini coefficient is .33 in Portugal, and has been trending downward for the past decade (1=complete inequality, 0=no inequality). The U.S. Gini is .41 and trending higher.
With the influx of tourism and retirees here, gentrification is a huge issue for the poor and middle class dwellers in trendy neighborhoods like ours.
Another feature of this economy, unsurprisingly, is the relatively low price of services, and the high price of goods. The low price of services is understandable, given the high unemployment and low wages.
The relatively high price of goods may be due to the VAT (23%), or to the tiny retail establishments that seem to abound in our neighborhood with no economies of scale and presumably high transport and handling costs. Gas costs the equivalent of $5.70 per gallon, and trucks are scaled down in size to maneuver through the narrow, winding streets. Our friends who live here drive once a month to a large grocery store to stock up. That is not available for many residents who live in tiny apartments with tiny fridges and little freezer or storage space, and don't have a car to begin with.
Prices in Portugal are lower outside of the metropolis (https://www.numbeo.com/cost-of-living/country_result.jsp?country=Portugal).