Lusíada. Economia & Empresa. n.º 29 (2020) 101
António Rebelo de Sousa
Professor Catedrático da Universidade Lusíada (Full Professor)
President of SOFID – The Portuguese Development Bank
This article corresponds, approximately, to the presentation performed by the author to the
representatives of EC, ECB and IMF, in January 2012.
EC - European Commission;
ECB - European Central Bank;
IMF - International Monetary Fund.
Recebido: 27.10.2020
Aprovado: 07.02.2021
Exports and FDI: (...), p. 101-106
Lusíada. Economia & Empresa. n.º 29 (2020) 103
Abstract: I intend to explain the different kinds of internationalization,
from soft to hard internationalization, as well as the different instruments that
can be considered to internationalize the Portuguese Economy.
I will explain the importance of SOFID-Sociedade para o Financiamento do
Desenvolvimento and, at the same time, I will make some proposals considering
the alternative policies concerning a new development model for the Portuguese
Resumo: Procura-se explicar as diferentes tipologias da internacionaliza-
ção, desde a “internacionalização suave” à “forte”, bem como os diferentes ins-
trumentos que poderão vir a ser utilizados tendo em vista a internacionalização
da Economia Portuguesa.
Procurar-se-á, ainda, explicar a relevância da SOFID- Sociedade para o
Financiamento do Desenvolvimento e apresentar algumas propostas alterna-
tivas tendo em vista a implementação de um modelo de desenvolvimento da
Economia Portuguesa.
Firstly, it is important to distinguish “soft internationalisation” from “hard
Soft internationalisation refers to exports.
Hard internationalisation refers to the direct investment of Portuguese com-
panies in foreign countries.
Both soft internationalisation and hard internationalisation are of crucial
importance for the Portuguese Economy internationalisation and, therefore, the
State must play an important role as regards the creation of appropriate condi-
tions for an adequate use of competitive advantages existing in our economy.
In fact, the truth is that Portuguese exports as well as the coverage level of
imports on exports have been increasing favourably.
But we need to go further.
The State has to provide companies - namely, in conjunction with the ef-
fective intervention of AICEP – with adequate information regarding business
opportunities, thus enabling the access to a wide network of contacts.
Moreover, it is necessary to ensure financing conditions to companies,
António Rebelo de Sousa
104 Lusíada. Economia & Empresa. n.º 29 (2020)
which belong to the trading sector, what unfortunately does not actually seem a
possibility in the near future.
Banks are now facing a situation which implies the reduction of the volume
of credits to be granted and it is possible to verify that even the best export com-
panies are being proposed a financing reduction, which makes the implementa-
tion of an “export led growth model” even more difficult.
It is really important to create certain mechanisms in order to allow for a
better financial support as regards the export sector, looking at the same time for
the anticipation of the mobilization of European structural funds for the trading
sector (with a reduction of the national investment contribution and by review-
ing the criteria that has been adopted up to the present).
On the other hand, it would be worth considering the possibility, during a
transitory term of three years, of granting tax incentives to companies operating
within the export sector (including taxes, such as IRC and taxes applicable to the
dividends to be distributed).
As regards “hard internationalisation”, it is essential to distinguish the direct
investment of Portuguese companies – IDEP – as regards developed economies
(such as EU and Northern America) from the direct investment of Portuguese
companies in less developed countries (LDC), in intermediate countries (IC) and,
finally, in what it was decided to designate as Emerging Economies.
As regards the first case, national Commercial Banking and Investment
Banking should play a fundamental role.
Specially, CGD (Caixa Geral de Depósitos), as a public capital bank, should
have a particularly dynamic intervention in such a domain.
However, as we all know, the Portuguese financial system is facing some
problems which, accordingly to my point of view, will only be overcome through
a rapid recapitalization, without which there will be no possibility to make the
national productive activity more dynamic.
As regards Portuguese companies’ direct investment in LDC and in the
Intermediate Countries, it will be worth stressing the importance which, in prin-
ciple, SOFID (Sociedade para o Financiamento do Desenvolvimento) must as-
sume. SOFID is 60% held by the Portuguese State and 40% held by the four more
important Portuguese Banks, namely, CGD, BES, BCP and BPI.
SOFID may grant loans, guarantee operations financed by local banking
or participate in the companies’ share capital. It is still worth referring its par-
ticipation in two European funds (ITF – Infrastructure Trust Fund, supported
by the European Investment Bank, and NIF – Neighbor Infrastructure Facility,
supported by the European Commission).
Moreover, SOFID is the entity that manages a Portuguese Fund For
Investment Support in Mozambique (INVESTIMOZ), aiming at promoting Luso-
Mozambican partnerships, namely, to finance the participation in the share capi-
tal of the Portuguese companies located in that country.
SOFID makes also part of the network of EDFIs – European Development
Finance Institutions.
However, the financial resources made available to SOFID turned out to be
Exports and FDI: (...), p. 101-106
Lusíada. Economia & Empresa. n.º 29 (2020) 105
quite limited, thereby requiring the reinforcement of its own capital or, alterna-
tively, to provide for the creation of a fund for the “hard internationalization”
managed by itself and in accordance with the principles of additionality, consist-
ency, and efficiency.
Another relevant aspect is the so named economic diplomacy.
In order for this to work effectively, it is essential to have a suitable coordi-
nation between the Ministry of Foreign Affairs and the Ministry of Finance, as
well as between the Embassies, AICEP and SOFID.
I would like to emphasize the absolute impossibility of implementing con-
sistent action plans without a close cooperation with GPEARI – Gabinete de
Planeamento, Estratégia, Avaliação e Relações Internacionais (Planning, Strategy,
Assessment and International Relations Office), as well as with the National
Treasury Secretariat and the National Budget Secretariat.
On the other hand, I also think it makes all the sense to defend a develop-
ment model for the Portuguese economy, trying to select the strategic sectors
and to adopt policies (in tax and financing domains) that help to maximize the
competitive advantages, both existing and potential.
And, in these domains, the Ministry of Economy must play a especially rel-
evant active role.
It is not the diplomacy that dictates the development models to be adopted
by those that are responsible for financial and economic issues or which are the
strategic sectors and competitive advantages of the economy in question.
Those that are responsible for financial and economic matters should inform
the diplomats about the internationalization strategy priorities of the Portuguese
economy and not otherwise.
To conclude, it is extremely important to consider the following basic stra-
tegic courses of action:
1. Need to distinguish “soft internationalization” from “hard internation-
2. Need to recapitalize the Portuguese Financial System within a very
short term;
3. Anticipation of the mobilization of European structural funds for the
trading sector (with a significant reduction of the national contribution);
4. Exceptional and transitional period of 3 years with the adoption of tax
incentives to companies in the export sector;
5. Absolute need to distinguish, in “hard internationalization”, IDEP in
developed economies from IDEP in LCD and IC;
6. Relevance of banking in general and CGD, in particular, regarding IDEP
in developed economies.
7. Relevance of SOFID regarding the IDEP in LDCs and ICs
8. Imperativeness of reinforcing SOFID’s own capital or, alternatively, to
provide for the creation of a fund for “hard internationalization”, to be
managed by SOFID itself in the future.
9. Importance of a suitable coordination between the Ministry of Foreign
António Rebelo de Sousa
106 Lusíada. Economia & Empresa. n.º 29 (2020)
Affairs and the Ministry of Finance, as well as between Embassies,
10. Importance of GPEARI (Ministry of Finance), National Treasury Secre-
tariat and National Budget Secretariat in implementing consistent ac-
tion plans;
11. Relevance of a suitable coordination of all sectors in the Portuguese
economy with competitive advantages at an international level.
12. The diplomacy should not inform those that are responsible for the fi-
nancial and economic sectors of the priorities for the internationaliza-
tion strategy of the Portuguese economy, but the other way round.
These are a few brief thoughts which I took the liberty to present aiming at
a central contribution to overcome the critical situation we live in.
I am sure we will not succeed without an action.
To quote the famous Portuguese poet, Fernando Pessoa, “To act, this is the
true intelligence. Success lays in succeeding and not only in having the condi-
tions to be succeeded. Any large land meets the conditions to build a palace, but
there will be no palace if nobody builds the palace”.
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económico contemporâneo”, in “Internacionalização e Tributação”, Coord.
Pires, Manuel; Pires, Rita Calçada, Colecção Ensaios, Univ. Lusíada Editora,
2012, pp. 19-26.
Ross; Westerfield; Jaffe- “Engenharia Financeira “, Prefácio-edições de Livros e
Revistas, Lda,2001.
Fitzroy, P - “Strategic management “, John Wiley & Sons, Westerfield Sussex,