Money transfers from Portugal to Brazil set a record

Danilo Cardeal, 40, from Bahia state, counts every euro he earns as a merchandise deliveryman in the Portuguese capital. For 11 months in Lisbon, he has systematically met the financial goals he set to take his wife Carmen and his two children, one 10 and the other 12 years old, from Ilhéus (Bahia), his hometown, to the other side of the Atlantic.

The Brazilian’s determination has already allowed him to buy a motorcycle in cash for €3,290 (US$3,282) and has guaranteed a pension of between €500 and €1,000 that he sends to his family every month. With two jobs, which take up at least 16 hours of his day, he earns €1,700.

Like Cardinal, thousands of workers who migrated to Portugal for a better life have become the primary source of income for the families they left behind, even if temporarily. According to the Brazilian Central Bank (BC), they are the ones who have been sustaining a vertiginous growth in remittances from the European country to Brazil.

In the first three months of this year alone, these transfers totaled US$76.8 million. It is more than double the observed in the same period of 2017, of US$33.9 million, when the flow of Brazilians to Lusitanian lands gained momentum.

According to BC data, these values are only exceeded by remittances from the United States and the United Kingdom, where Brazilian communities are larger and have long been consolidated.

A survey by the Migration Observatory shows that of all the funds sent to the countries of origin by foreigners living in Portugal, half belong to Brazilians. Economist Sandra Utsumi, executive director of Haitong Bank, says such concentration is explained by the substantial increase in the migration of Brazilian citizens to Portugal.

Brazilians represent one-third of all foreigners officially registered in Portugal. There are more than 250,000, of which 47,600 obtained authorization to live there in the first six months of 2022. “There are many stimuli for Brazilians to migrate to Portugal, starting with the constant economic crises in Brazil,” she says.

The economist recalls that starting in the late 1980s, Brazilians were migrating to Japan, the “dekasseguis”, descendants of Japanese who had moved to Brazil many decades earlier.

Some time later, the flow of Brazilians went to the United States and England – to a lesser extent. Now the focus is on Portugal.

“Japan hardened the rules for immigrants a lot. The same happened in the United States and, more recently, in England, because of Brexit,” he explains. “In Portugal, the opposite is happening; the government is encouraging foreigners to come,” he adds.

The most recent flow of Brazilians to Portugal is widespread, points out economist Roberto Luis Troster. “We are talking about less qualified workers, entrepreneurs, professionals with higher education, retirees, entrepreneurs, and digital nomads,” he points out. For him, this movement only tends to increase.

“Unfortunately, we don’t see economic improvement in Brazil any time soon. The perspective is that the country will grow, at most, 0.5% in 2023, regardless of who wins in the presidential elections,” he stresses.

“Besides this, we have an extremely politically polarized country, and the debate is restricted to themes such as inflation, poverty, and public spending. In Portugal, and a large part of Europe, the thinking is focused on the new economy and the opportunities brought by technology,” he adds.

In Troster’s evaluation, who commanded the Economic Department of the Brazilian Bank Federation (Febraban), even though salaries in Portugal are lower than in most European countries – the current minimum wage is €705 – they are higher than those paid in Brazil.

“Therefore, Portugal ends up being an opportunity to improve one’s life and can become an important gateway to Europe if the workers acquire the right of residency,” he says.

For him, young people are the most disenchanted with Brazil and are likely to migrate. However, even those with a settled life are not shy about selling everything and starting over on the other side of the Atlantic.

Professor at Insper, Ricardo Rocha, points out that there is a set of factors to stimulate Brazilians to migrate to Portugal, not only the economic ones.

“There is the ease of the language; the climate is not as cold in winter as in the rest of Europe; the Brazilian culture is similar to the Portuguese, and there is public safety. People can walk calmly through the streets, day and night,” he says.

According to him, not only will the remittances from Portugal to Brazil increase, the income coming mainly from work and the transfers to the European country will grow because part of the middle and upper classes want to settle permanently in Lusitanian lands.

The Brazilian Central Bank’s records confirm this. Between January and March this year, US$105 million was remitted from Brazil to Portugal.

A significant part of these resources went to buy real estate, which is cheaper than in regions such as Itaim (São Paulo), Lago Sul (Brasília), and Leblon (Rio de Janeiro) because many Portuguese descendants obtained citizenship, thanks to changes in the laws.

Now, the European country wants to attract, above all, labor to supply the demand in areas that range from hotel management to medicine. The workers who obtain these special visas, which last up to 180 days and allow people to look for jobs in Portuguese cities, will undoubtedly send part of their salaries to Brazil.

With information from Estado de Minas