Evaluation of the Main Achievements of Cohesion Policy Programmes and Projects over the Longer Term in 15 Selected Regions : Case Study Algarve (Portugal) : From 1989-1993 Programme Period to the Present

Salvador, Regina and Simões, Ricardo and Charles, David (2013) Evaluation of the Main Achievements of Cohesion Policy Programmes and Projects over the Longer Term in 15 Selected Regions : Case Study Algarve (Portugal) : From 1989-1993 Programme Period to the Present. European Commission, Luxembourg. (http://ec.europa.eu/regional_policy/sources/docgen...)

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Abstract

This report presents the case study for the Algarve Region (Portugal) as part of the study ‘Evaluation of the Main Achievements of Cohesion Policy Programmes over the Longer Term in 15 Selected Regions (from 1989-1993 Programming Period to the Present)’ coordinated by the European Policies Research Centre and the London School of Economics. The Algarve is a highly peripheral region, located at the most south-western tip of continental Europe. Overcoming the constraints of its geographical location, the Algarve has become an important tourism destination in recent decades, increasing both its connectivity and significance within the European economy. Thirty years ago, the region had a low-performance economy, with a per capita GDP (in PPP) of barely 53 percent of the EEC average, and was categorised for Structural Funds (SF) purposes as a ‘region whose development is lagging behind’. The region had a weak industrial base, with extremely low levels of investment in innovation and an economy mainly comprising very small firms. Within the region there were considerable internal disparities between the more developed and urbanised coastline and a poor agriculturally-dominated interior, a situation exacerbated by poor internal transport networks making it difficult for the rural population to access urban-based public services. From being one of the least-developed regions in Europe, based on agriculture, fisheries, and traditional agro-food industries, the region grew quickly, as a result of increasing specialisation in tourism, reaching a level of GDP above 75 percent of the EU average, leaving the group of convergence regions under the current 2007-2013 programme. Throughout most of this period unemployment was relatively low and social exclusion has been lower than other parts of Portugal. The regional economy today is mostly based on tourism-related activities, and although this has been the core element in the economic base for most of the study period, its concentration increased substantially. However, this very high specialisation in tourism - the focus of most employment and production - makes the Algarve exceptionally dependent on one sector, which represents a major weakness and potential source of instability.

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