If you build it, will they come?
18.10.13 @ 10:23
Beja, Portugal - As EU-backed projects go, the hydroelectric Alqueva dam in Portugal looks mighty impressive. The dam was initially opened in 2002 with the help of €203 million of EU funding, and currently has a capacity of 259 megawatts.
The second stage of development, with an additional 259 megawatts, was commissioned earlier this year.
In the process, the dam also created the largest artificial lake in Europe, providing enough water supply for the region's farming communities to survive three years of drought.
Such projects are the "anchor of development," says Jorge Pulido Valente, the mayor of nearby Beja, a city of around 50,000 which sits in the Alentejo region of Portugal, just under 200 kilometres south-east of Lisbon.
The city played host to the Congress of European Emerging Regions (CoEER) this month, with the underlying theme the role of infrastructure projects in driving regional economic growth.
The Alqueva dam, together with the development of Sines harbour, and Beja international airport, a converted military airbase, are the jewels in the region's crown.
With Portugal in recession as it struggles to cope with an economic crisis which forced it into a €90 billion bailout programme in 2011, getting the most out of the country's EU structural funds is now a political priority.
It is also an issue which unites local politicians. Government-created regional assemblies bring together local mayors who then draft a programme on how the largesse from Brussels should be spent.
The next big project is likely to be an irrigation system capable of treating of water and sewage for 21 municipalities in the region.
A strong case can be made that big public investment projects can act as stimulus measures giving a shot in the arm to the region affected.
Hundreds of jobs are created at the construction phase and, barring very poor planning, the economic gains will see a relatively speedy return on the investment.
A study to analyse the effects on population growth and jobs estimates that 20,000 people will come to Beja and its surrounding area due to the new job prospects, particularly in the agriculture sector.
Unemployment in the Alentejo region stands at 11 percent unemployment and falling, much lower than the national jobless rate of 17 percent and rising.
"We will need more workers than the region can provide," the mayor says.
Portugal will get a total of €19.6 billion in EU structural and cohesion funds in the 2014-2020 budget cycle, much lower than the €21.5 billion available to it between 2007-2013. One billion euros have been specifically allocated to help with the country's economic difficulties.
But one of the consequences of the crisis is a greater number of applicant projects competing for a smaller pot of money.
"We now have three important projects that are candidates for EU funds but only one will be selected," Pulido Valente comments, adding that "the problem is not the amount of funds but the national and regional priorities."
It seems that the Alentejo experience is to paraphrase the famous line from Hollywood's 'Field of Dreams' - "if you build it they will come".
It is not quite that simple, however.
Agriculture, and in particular, olives and grapes, is the main source of income in the region, and the sector is growing. However, projects such as Alqueva and Sines harbour offer job opportunities that encourage migration from rural communities.
But EU resources are needed for rural communities, says Pulido Valente, noting that over 60 percent of the Portuguese population live outside the country's cities.
EU regional policy is "almost exclusively aimed at competitiveness in urban areas, but we need funds to support projects in rural areas."