The economic debate in Portugal suffers from a chronic illness: macrocephaly. We exhaustively discussed the State Budget, the captivations of Terreiro do Paço and the execution of the European “bazooka”. However, we systematically ignore the engine that keeps the real real economy running every day: local management and, in particular, the municipal business sector.
For years, an unfair stigma was allowed to attach to municipal companies. They have often been caricatured as cumbersome or redundant structures. It is an error of economic myopia. Financial rigor, accounting transparency and efficiency are not negotiable in any public entity, but confusing the requirement for scrutiny with the demonization of the model is throwing away the engine because of the exhaust noise.
The cold and measurable reality is that Municipal Councils, trapped in traditional public procurement and administrative bureaucracy, are often too slow to respond to the speed required by the modern economy. This is where municipal companies come in, operating at the perfect balance point: they have the agility and management logic of the private sector, but maintain an unwavering commitment to the public interest and social cohesion.
Let’s look at urban regeneration, the management of public space or the dynamization of local markets. A municipal market managed with a business vision is not just a supply building; it is the commercial heart of a city. It is an anchor infrastructure that generates pedestrian traffic, attracts quality tourism and creates a multiplier effect that supports traditional commerce, restaurants and services on all adjacent streets. When a municipal company revitalizes an urban center, it is, in practice, creating the necessary ecosystem so that local Small and Medium Enterprises (SMEs) can earn money and survive.
Lisbon does not solve the parking problem in Faro, just as Terreiro do Paço does not attract investment to the riverside areas of the south. Capturing wealth and retaining talent is done at the street, neighborhood and city level. And this requires teams in the field, professional management and the ability to execute quickly that only the local business sector can guarantee.
In a country where the central State is so often distant and overburdened, municipal companies assume the role of “shock absorbers” and catalysts for regional development. Requiring these structures to present correct accounts, solid balance sheets and excellent management is an obligation. But ignoring its vital role in the country’s economy is a luxury that Portugal cannot afford. The national economy adds up to the big numbers, but the real economy is built on a local scale.
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