The Azores Economy

The Azores archipelago is an autonomous region of Portugal, located in the North Atlantic ocean, 1 500 km off the coast of mainland Europe (distance from Lisbon). The Azores encompass nine islands and a small group of islets divided into three geographic and political groups. The region has always been an area that has required hard work, ingenuity, and resilience since they are relatively isolated in its location from mainland Europe. The islands’ geographical position and their volcanic origin have allowed these islands to gain international recognition for some of the unique UNESCO biospheres and endemic species that exist here on these beautiful islands.
The Azores islands’ marine surface area is 954 496 square km, which makes it one of the largest exclusive economic zones in the entire Eurozone (EEZ’s). Economic growth has always been measured by a country or region’s GDP per capita after all goods and services have been produced in the year and divided by the population. The Azores has seen a steady increase in their GDP, reaching above projected targets in recent years (2% GDP growth in 2016 instead of 1.6 forecasted).
This image has an empty alt attribute; its file name is 1266_442766889105667_1414341050_n.jpgThanks to the natural landscapes, ecosystems, and unique biodiversity, tourism has been progressively gaining weight in the region since 2014: this applies to both the tourism sector itself and the wide range of activities related to it. The region’s economy is mostly based on services with an essential role in employment influenced by the public administration, followed by wholesale and retail trade, transportation, accommodation, and food-related services. However, what the region is most notably recognized for is its agriculture and fisheries sector. This is where the magic of 5 centuries of Azorean ingenuity flourishes.
67230_491446020904420_592802952_nDairy farming in the region has always been a key economic indicator of the Azorean economy’s overall health with a wide variety of services and products, making up a large percent of the comprehensive average income for farmers and small businesses in the region. In recent years, the Azores’ high-quality dairy industry has been heavily affected by the decrease in milk prices, which has hit Azorean farmers like a tropical storm. The immediate intervention and protective measures needed to safeguard such a vital industry to the region in terms of economic and cultural value are imperative for this industry’s survival. The lack of interest or understanding by politicians in recent years has forced many small farmers out of business. With an already high youth unemployment rate, the local government needs to focus on areas of concern. The majority of the products produced by Azorean dairy farmers regarding cheeses, milk, and yogurt are recognized throughout Europe as some of the highest quality products. This is due to the reputation of the Azores, causing many to question why more marketing efforts are not being put forward to gain market share for the region’s high-quality dairy industry.
As an autonomous region, the Azores has its tax-raising powers; they have the ability to adapt their regional economic and social development plans as well as the regional budget with the right to participate in all negotiations for international treaties and agreements that concern the region. It can also legislate in agricultural policy, fisheries, sea, marine resources, trade, industry, energy, tourism, infrastructure, environmental protection, and regional planning. It is one of the two Autonomous regions in Portugal, with the Madeira island group being the second, which allows them great powers over their sovereignty. It is more than likely when asking someone from the Azores what nationality they are. They will generally respond to Azorean, even before saying Portuguese, which is endemic of the region’s inhabitants’ culture and pride.
This image has an empty alt attribute; its file name is bigstock-happy-people-are-looking-holid-260758972.jpgSince 1976 the Azores have enjoyed the status as an “autonomous region” with its own political and administrative regime and having its own self-governing institutions, i.e., the Regional Government and the Legislative Assembly. The Regional Government is the executive body of the region and all its administration, as noted in the constitution of 1976.
This image has an empty alt attribute; its file name is bigstock-man-hands-handling-fan-fifty-e-28404044.jpgThe distribution of regional GDP by the island in 2014, according to information provided by the Azores Government’s regional statistics department are as followed: Santa Maria 2.8%, Sao Miguel 58.2%, Terceira 21.5%, Graciosa 1.5%, Sao Jorge 3.3%, Pico 5.0%, Faial 6.2%, Flores 1.3%, Corvo 0.2%. As you can see, the islands’ economic disparity represents the difference in population and the circulation of money, which is principally concentrated on Sao Miguel and Terceira. A GDP per capita is not always an accurate portrayal of the financial situation of the average Azorean as the large majority of households produce large quantities of the necessary fruits, vegetables, chickens, dairy, etc. from their resources such as home gardening, etc. which offset many costs of living.
According to an Economic, social, and territorial analysis done for the European Union’s parliament on regional development in 2017 said this about the main challenges about the Azorean economy going forward:

Similarly to other small economies, the Azorean economy is more vulnerable in terms of response to crises. In addition, there are still development challenges due to the archipelago’s geographical position, which entails extra costs for goods and services (transport, logistics, energy), as well as constraints on economic and social integration with other national and EU territories. There is also a lack of critical mass for certain economic, financial, or scientific projects. Furthermore, it is difficult to balance the traditional production processes, local living conditions and protection of the environment and ecosystems with the need to boost the local economy in order to compete in a globalized world.”

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