Author(s): Correia, Miguel Silva Pinto
Date: 2012
Persistent ID: http://hdl.handle.net/10400.5/4969
Origin: Repositório da UTL
Subject(s): Small Island Economy; Offshore Financial Center; State Aid; Regional Development; Island Studies; Outermost Regions
Master in International Economics and European Studies
Madeira, which is an Autonomous Region of Portugal and an Outermost Region of the EU, is currently facing problems regarding the sustainability of the Regional Government’s finances. The Government of the Republic was asked to provide assistance in exchange for the implementation of an austerity plan. Madeira’s International Business Center, encompassed by the International Business Center and the Industrial Free Trade Zone created in the 80s, is considered by the Regional Government as a powerful mechanism to increase economic growth, attract FDI and generate fiscal revenue in a period where the “contraction of the [Portuguese] economic activity is unprecedented”. As the power of regional authorities are limited by para-constitutional law, full fiscal autonomy from the mainland is non-existent, therefore cannot be used as a jurisdictional tool to promote development. What is its impact on the RAM’s budget, as the fiscal regime can be improved to decrease budget dependence from the Portuguese central government while maintaining the current supply of public goods and services by the Regional Government? Being an explanatory and argumentative thesis, it aims to come up with a policy proposal regarding what can be done to improve the archipelago’s economy through the Center; methodologically consisting of literature review, economic data and reports produced by regional, national and European authorities along with interviews to those directly involved with the Center.
