António Saraiva

Today, he assures us that he is proof that it is possible to overcome the circumstances that prevent social mobility. From metal worker to boss of bosses, António Saraiva talks to Villas&Golfe for the last time as President of the Confederation of Portuguese Business (CIP). Thirteen years of his term of office are coming to an end, with experiences that only António can recount. ‘Troika’, the bankruptcy of leading banks in the national economy and the pandemic, the biggest recession of the last hundred years. All of these phases were experienced by António Saraiva. Side by side. With Portugal. An interview of a lifetime, dedicated to the country and to the man who has nurtured the CIP for over a decade. His journey through the business world stops here, but what is to come? This is to be revealed by the «builder of bridges» in the coming lines.

From apprentice metal worker to boss of bosses. Do you think that where you come from has no importance on where you want to get to?
I would like these circumstances to be of less importance in today’s Portugal. Education and training are fundamental. They were fundamental in my life. Entrepreneurship is also a path to social mobility. But being an businessman in Portugal, even more so, becoming an entrepreneur in Portugal, is a tremendous adventure. Looking at the financial system we have, with the perception of risk it has, with the lack of ability in risk evaluation it has, I wonder if it would be possible today, in the circumstances that I had in 1996, to successfully acquire a company, in the conditions in which I was able to do it. I fear that we have gone backwards, rather than forwards in this area. 

You were born in the municipality of Aljustrel, but at the age of six you arrived in the big city to stay. Did you find it hard to integrate then? Do you think you struggled with social prejudices?
Without a doubt about. I learned to overcome these difficulties and to live with these prejudices with serenity and a certain amount of self-confidence. 

At the age of 17, you began your career at Lisnave. You completed the Industrial School Course and attended the Higher Technical Institute. Through the twists and turns of life you eventually became President of the CIP. At the end of 2022 you were awarded an Honorary PhD. What did this honourable distinction symbolise for you?
Naturally, I was proud to receive this distinction. It also came with the satisfaction of seeing in it the recognition of the values that have guided my life, the causes I have embraced and my dedication to the country’s civil society, in particular to its business community, as a businessman and as leader of an association.

Looking back, how would you describe your entire term of office at CIP?
I served as President of CIP for a period of 13 years, in which Portugal faced very tough threats and challenges: first the near financial collapse and the intervention of ‘Troika’ that followed, with very high costs, but also an opportunity for reforms. We had a financial sector crisis that led to the bankruptcy of leading banks of the national economy. More recently, we had the COVID-19 pandemic, the biggest recession in the last hundred years. We now have the impact of the Ukraine war with the escalation of costs, the return of inflation and the sharp slowdown of the economy. As I said in my letter to the business community, these were very difficult times, which required CIP’s reflection and firmness, but also resilience and a spirit of dialogue, strengthening homegrown skills and the capacity for public intervention.
Throughout these years, CIP has managed to affirm itself nationally and to gain in relevance internationally, namely in the European and international organisations to which we belong. Today we are stronger in our mission to be the voice of Portuguese companies. I am proud of having always defended the role of social dialogue, even when we were faced with a period in which the government put social dialogue aside in favour of negotiations with the forces that guaranteed parliamentary support. I am proud of the forthright and constructive dialogue that could be established with other employers confederations. 

Moving on to the economy, the European Commission’s recent economic forecasts indicate that, in 2024, Romania will overtake Portugal in terms of per capita GDP. Can we say that Eastern European countries know how to make better use of European funds than Portugal?
As a matter of fact, in the last 20 years, all the European Union countries of the former Eastern bloc, which were poorer than Portugal, have converged with the European average. Convergence is possible. Portugal has almost always diverged, alternating crises, in which we have shrunk more than others, with weak growth. The issue is not only the use of European funds. It is in the collective capacity to transform our economy. I have insisted that our goal cannot be just to recover, it must be to transform the economy, to open a new cycle of sustained development. This transformation is to a large extent in the hands of the businesses. It will be, fundamentally, the work of companies. But without neglecting the responsibilities or the potential of companies, the design of the transformation of the economy is conditioned by the direction given to economic policy. Therefore, we not only need to make better use of European funds, but also a new generation of public policies, based on a new culture of relationship with economic agents and on the appreciation of the role of the market economy and private initiative. We need an economic policy that places competitiveness as a all-encompassing concern in the state’s involvement in the economy.

Are you worried about the country’s future?
I am dissatisfied with what is being done to achieve a more prosperous future that is more in line with the aspirations of the Portuguese. I am left with confidence in the value of our companies, in their capacity to endure and reinvent.

«I am dissatisfied with what is being done to achieve a more prosperous future»

Strengthened business dimension, innovation and internationalisation. Is this what Portugal lacks?
Undoubtedly, these are three fundamental vectors for companies to reach higher levels of productivity, in order to reconcile competitiveness with income in a positive dynamic. 

What impact has Web Summit had on Portuguese companies?
Besides the direct impact of an event of this dimension, Web Summit is an opportunity for Portuguese startups to show themselves to the world and get a first contact with investors. It is also an excellent vehicle for promoting the new image of a country open to innovation, an exceptional location for setting up technology-based companies. And that is important for the national economy and its attractiveness.  

Throughout energy and fuel costs increases, how is the health of companies and which sectors are most affected?
The escalating costs and disruptions to supply have put businesses under tremendous danger. The picture has been particularly worrying for companies in the most energy-intensive sectors, especially ceramics and glass, but also many others such as steel, smelting, textiles, paper, wood, chemicals, cement and mining and quarrying industries. There are also sectors which are affected by the lack of raw material supplies, such as metallurgy and metalworking and the food industries. But the impact has already spread to the majority of companies with the increase in inflation. The recessionary effects are clearly visible in the erosion they cause in the purchasing power of consumers, and they also directly affect company margins, as cost increases have not been fully passed on to prices. 

Should there be a fiscal harmonisation suited to companies?
I have been advocating a profound reform of taxation, which provides a simpler, more transparent, coherent, and understandable legal framework. A reform that mitigates the aspects in which our tax system is more unfavourable compared to the countries with which we compete in the global markets and with which we intend to compete in terms of economic welfare. I would highlight the need to reduce the gap, in relation to our competitors, in the levels of the direct taxation of companies.
With regards to the corporate income tax, with the increase in the state surcharge introduced in 2018, and taking into account the reductions made in France and Belgium, Portugal now has the highest maximum rate of taxation on corporate income in the entire European Union (with the exception of Malta, which has a system of very high tax refunds).
This gap also exists with regard to the implicit tax rate, which measures the effective tax pressure on companies. According to a European Commission report, in 2020 Portugal was the third country with the highest implicit tax rate on company income in the entire European Union, only below France and Croatia. We compare badly, therefore, and the responsibility to correct this situation lies with the nation’s policy makers. In the European framework, tax harmonisation has been virtually limited to VAT and it will be unrealistic to expect significant progress. The member states remain wary of their competences. There is, however, room for some harmonisation to reduce the complexity of tax rules and the compliance costs faced by EU businesses operating in more than one member state. The European Commission has been working in this direction, albeit without much success, with proposals for a common corporate tax base applicable precisely to those with a presence in several member states. A new proposal is being prepared, but I foresee that it will not be easy to find consensus within the Council. 

Who does access to credit benefit the most at the moment, companies or banks?
I would not put it like that. In a healthy financial system, both those who give credit and those who get credit benefit. What I think is that banks are still not able to redirect credit to the productive sectors, in particular to those which, in open competition with other nations, present a greater potential for productivity gains. I wonder if, in fact, banks are granting credit based on the assessment of the merits of the projects or if they continue to look mainly, almost exclusively, at the guarantees provided.

Is a creator of wealth still badly regarded in Portugal?
I don’t believe that this is a generalised view. In fact, there are surveys carried out on a European level that show that the Portuguese are among those who most adhere to the idea of entrepreneurship as the basis for the creation of wealth. However, it is very clear that there are forces that do not stop spreading mistrust and prejudice against companies and entrepreneurs, to feed a climate of hostility against companies, especially large companies, and to demonise profit as the cause of poverty. To counteract these prejudices, we must uphold that without profit it is not possible to invest and put an end to this very poverty. We must remember that a society that ignores the fundamental role of companies, that denies them the conditions to carry out their function, is, in the long run, jeopardising the possibilities for development and growth. Similarly, a society that harbours attitudes of mistrust, envy or antagonism towards entrepreneurs is compromising the future and the possibilities of wealth creation and, therefore, its subsequent distribution. We therefore need to insist on valuing entrepreneurial merit and dignifying the role of the entrepreneur in our society. 

«Portugal is far from being a business-friendly and attractive country for investment»

Fifty Portuguese companies have signed an agreement to create thousands of jobs in the coming years. Is it enough to create more jobs or do they need to offer better salary conditions?
The agreement you refer to goes beyond the goal of creating more jobs. It is a pact to promote a strengthening of youth employment, but also of attractive employment conditions for young people. Both these goals are shared by most companies. The companies know that the people, with their knowledge, skills and talent, are what most sets them apart and ensures their success. Contrary to what many insist on proclaiming, salaries are not perceived by the companies solely as a cost, but also as an investment, as they are an instrument to attract and keep more qualified and competent workers. But companies also know that it is only by increasing the added value of the goods and services they produce that income, particularly wage income, can grow in a sustainable manner, without jeopardising their competitiveness and their future. 

Is it also the responsibility of the businesses to keep young graduates in the country? Without a doubt. I would say that one of the main concerns of Portuguese businessmen and managers is to attract and retain the talents that will make the competitiveness and growth of their companies possible. 

Your time at CIP ends in March. Do you leave your post with the feeling of mission accomplished?
As I expressly stated in my letter to the entrepreneurs, we have done a lot at CIP over these 13 years. I am aware that we have done what we should have done, but Portugal is far from being a business-friendly and attractive country for investment. The legacy I leave is, above all, this strong encouragement for CIP to continue to fight for the companies and for the country’s development. 

What mark have you left on the Portuguese business world?
I am proud of having been, in my capacity as association leader, a builder of bridges. Without giving up the causes I embrace, but at the service of those same causes.

«CIP has always had the right president for each moment of the country’s life»

What still has to be done and what are the expectations regarding the performance of CIP’s next successor?
The work of associations is always unfinished. One of the tasks that its leaders must continue to pursue is the convergence of organisations. The country has an excessive number of associations and it would be advisable to encourage their convergence. Since its creation, CIP has always had the right president for each moment of the country’s life. This will remain the case in the future.

And after March, do you intend to step away from the business world for good? If so, how will you fill your days?
As far as my future plans are concerned, allow me to use a well-known maxim: «I don’t make plans for my life so as not to get in the way of those that life has for me». I am, however, certain of one thing: I won’t be putting on my slippers!

Who is António Saraiva today?
I am who I have always been. A man of causes with an enormous civic restlessness. A man proud of his career and faithful to his origins. A happy person and grateful to life for the opportunities it has given me.