A Tale of Two Economies
The best revelations I gained while traveling on the Marshall Memorial Fellowship have come from the comparative perspective the exchange encourages. Immersing oneself in a country’s economy, politics, opportunities, and challenges for a few days only to abruptly leave and do the same in another country reveals stark contrasts. For me, no two places presently provide such a contrast as Lübeck, Germany and Lisbon, Portugal.
The first difference I noticed between Lübeck and Lisbon was the general ‘feel’ of economic activity. Upon taking a walk around the city in Lübeck, I noticed a mixture of small-midsized businesses, large corporations, manufacturing companies, and mom and pop shops in a variety of industries. I visited a biotechnology firm that was a start-up by a scientist twenty-five years ago, and is now a fast-growing twenty-million dollar company. The “spirit of the times” in Lübeck seemed to be hope. There is work in Germany, and I met immigrants from Africa and even the United States who have come to Lubeck to study. I met an immigrant from China who came to Lübeck over twenty years ago, and is now a successful commodities trader. I witnessed the strength of the German export machine at the docks at the Port of Lübeck where large roll-on, roll-off vessels loaded German cars for export to Denmark and Russia. I left Lübeck with the impression that it is a city that believes that the economic future will be better than the present.
What I witnessed in Lisbon, Portugal was a stark contrast to what I saw in Lübeck. As I took a few hours to walk the streets of Lisbon in the afternoon during rush hour, I saw the flood of people leaving work for home. I took note of the many restaurants in the heart of the city, along with some retail shops, but I did not notice indications of the types of small and midsized businesses that I saw in Lübeck. After leaving Germany, I felt that the excitement that is generated by free enterprise was absent in Portugal.
I shared my feelings with an investment banker with BPI while in Portugal. We spent more than two hours on the Bloomberg analytics platform analyzing and discussing Portugal and its place in the Euro crisis. There, we compared Portugal’s recent economic performance with Germany’s. While it was one thing to discuss the diverging economies within the European Union, it was another to see the difference in numbers. Economic stagnation for over a decade compounded by the Eurozone crisis has given Portugal’s economic prospects an uncertain future.
These two societies also view the past differently. Germany has been forever shamed as a result of the ascendancy of the Nazis within a span of two decades in the 1920s and 1930s. In the German military base in Eutin, the Nazi insignia is missing from its place on the historic German military uniform of the time. In contrast, the tales of five-hundred years of Portuguese colonialism in Africa, South America, and Asia proudly adorn the walls of the Portuguese Parliament in the form of large wall paintings. Whereas Germany is focused on the present and its implications for the future, Portugal by contrast places the present in the context of its grand past.
The highlight of my MMF experience stemmed from being able to observe sights, sounds, and experiences, which helped me place models, analysis, data, and information into context. From an economic standpoint, no two countries better illustrate contrasting economic models than Germany and Portugal.
Anthony A. Blow, Managing Director at Energeia Capital in Houston, TX, is a Fall 2012 American Marshall Memorial Fellow.
The views expressed in GMF publications and commentary are the views of the author alone.