The Azores Economy

The Azores archipelago is an autonomous region of Portugal located in the North Atlantic, 1 500 km off the coast of mainland Europe (distance from Lisbon). The Azores incompas 9 islands and a small group of islets, which are divided into 3 geographic and political groups. The region has always been an area that required hard work, ingenuity and resilience, since they are relatively isolated in their location. The geographical position of the islands and their volcanic origin have allowed these islands to gain international recognition for some of the unique, UNESCO biospheres and endemic species that exists here.

It is the marine surface area of the Azores islands with 954 496 square km’s that makes it one of the largest exclusive economic zones in all of the Eurozone (EEZ’s). Economic growth has always been measured by a country or regions GDP per capita after all good and services have been produced in the year and then divided by the population. The Azores has seen a steady increase in their GDP with it reaching above 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 Azores’ natural landscapes, ecosystems and biodiversity, tourism has been progressively gaining weight in the region since 2014: this applies to both the tourism sector itself and to the wide range of activities that are related to it. The region’s economy is mostly based on services, with an important role in terms of employment played by the public administration, followed by wholesale and retail trade, transport, accommodation and food-related service activities. However, what the region is most recognized for is its agriculture and fisheries sector. This is where the magic of the Azores comes out, with dairy farming and various dairy products such as cheese, yogurts etc all making its way to international and domestic markets as high quality Azorean made products, which has allowed the region to gain a reputation for its outstanding, traditional agricultural practices.

As an autonomous region, the Azores has its own tax-raising powers and has the power to adopt the regional economic and social development plan and the regional budget and to participate in negotiations for international treaties and agreements that concern the region. It can also legislate in matters of agricultural policy, fisheries, sea and marine resources, trade, industry, energy, tourism, infrastructures, environment and regional planning. It is one of the two Autonomous regions in Portugal, with the Madeira island group being the other, which allows them great powers over their own sovereignty. It is more then likely when asking someone from the Azores what nationality they are they will generally respond Azorean, even before saying Portuguese.

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Since 1976 the Azores has enjoyed this status as an “autonomous region” with its own political and administrative regime, 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 its administration as noted in the constitution of 1976.

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The distribution of regional GDP by island in 2014 according to information provided by the Azores Government regional statistics department. 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 economic disparity between the islands not only represents the difference in population but also the circulation of money which is largely 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 personal 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 globalised world.”

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